Monday , January 18 2021

Brexit deals leaves UK 'better off' despite dire economic forecasts

Theresa May has claimed her Brexit deal will leave the UK "better off" as she defended her agreement in the face of official economic forecasts predicting a hit to growth.

Quitting the EU under the government's plans could cut the UK's gross domestic product (GDP) by between 2.5% and 3.9% compared to staying in the blog, work by the Treasury and other Whitehall departments revealed.

An 83-page document published on Wednesday did not provide a specific analysis of the Brexit deal the prime minister is trying to push through parliament.

But it analyzed the likely impact of the proposals agreed by the Cabinet at Checkers in July and set out in the government's subsequent white paper.

It also modeled the impact of the UK securing a Norway-style relationship with the EU after Brexit, a Canada-style free trade agreement with the block, and the effect of a "no deal" Brexit.

In every scenario, the UK economy was predicted to grow over the next 15 years, but not as fast as it would have been without leaving the EU.

A no deal Brexit could see economic growth up 10.7% less, the analysis said.

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Mrs. May used the analysis to continue to press the case for her Brexit deal, as she faces a battle to persuade MPs to back her agreement in a House of Commons vote on 11 December.

Speaking during Prime Minister's Questions, she said: "The analysis does not show that we will be worse than the status quo today.

"What the analysis shows is that this is a strong economy that will continue to grow and that the model that actually delivers best on delivering the vote of the British people – and for our jobs and our economy – is the model that the government has put forward. "

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In an interview with Sky News earlier, Chancellor Philip Hammond said the analysis showed that the prime minister's Brexit deal offers the political benefits of being outside the EU with "very little cost".

The Whitehall document was followed later on Wednesday by the publication of Even more dramatic predictions by the Bank of England.

It claimed a disorderly deal, Brexit could see the UK economy shrink by almost 8%, the price of the pound plummeted, at 30% slump in house prices, almost doubling unemployment and inflation spiraling to 6,5%.

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Bank of England governor Mark Carney stressed the work did not represent a forecast, but it was instead a "worst-case version" of a non-dealer Brexit to help him "be prepared for all eventualities."

He also reported the UK banking system is strong enough to withstand a disorderly Brexit.

But Mr Carney's explanation of the bank's work did not satisfy Brexiteers.

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Leading Tory Eurosceptic Jacob Rees-Mogg branded the bank governor as a "second-tier Canadian politician who failed to get on in Canadian politics and got a job in the UK."

He told Sky News: "I do not think he's greatly respected and he's been deeply politicized to the damage of the Bank of England's reputation."

Those wanting a second Brexit referendum used the dual economic analysis to push their claim for a fresh public vote on EU membership.

With the prime minister estimated to be more than 60 votes short of the majority she needs for the House of Commons to approve her Brexit deal, Labor's shadow chancellor John McDonnell suggested a new referendum might be "inevitable."

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Admitting it will be "very difficult" to force a general election even if MPs vote down the Brexit deal, Mr McDonnell told the BBC: "If that's not possible, we'll be calling on the government then to join us in a vote.

"And, again, it's difficult to judge at each stage. But that's the sequence I think that we'll inevitably go through this period."

Speaking on a trip to Scotland later, as she continues her tour of the UK in a bid to sell her agreement, the prime minister said Mr McDonnell's comments represented "the true position of the Labor Party."

"Labor just wants to frustrate Brexit, they want to go against and overturn the vote of the British people," she said.

Prior to the crunch Brexit vote on December 11, Mrs. May could be facing further headache.

House of Commons Speaker John Bercow said he would consider whether the government has acted in the "contempt" of parliament if it continues to refuse to publish the full legal advice on the withdrawal agreement.

Late on Wednesday, the government revealed that it would accept up to six amendments to the motion on which MPs will hold their "meaningful vote" on the Brexit deal, which could prompt last-ditch efforts for a second referendum or a "soft" Brexit.

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