Government impact assessment reveals UK could be forced to borrow £120bn more after Brexit

Posted On: 
8th March 2018

Britain could be on course to borrow £120bn more to cope with the impact of Brexit, according to the Government's own assessments.

Vote Leave claimed leaving the EU would save Britain £350m a week.
PA Images

In a major blow to those who argued that leaving the EU would free up billions of pounds a year to spend on public services such as the NHS, the impact analysis says the Treasury will be forced to borrow the eye-watering sums between 2019 and 2033.

The most costly option would be crashing out of the bloc without a deal and on World Trade Organisation terms, according to the analysis published by the Brexit Select Committee today.

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The country will still be on the hook for some £80bn if it manages to negotiate a free trade agreement - the closest option to the Government's aims.

And if it negotiates an European Economic Area-style agreement including remaining a member of the single market - which the Government has ruled out - ministers will still have to borrow some £40bn more.

The numbers make tough reading for those who campaigned for a Brexit vote on the back of the Vote Leave promise the UK would take control of £350m a week in payments currently sent to Brussels.

Labour MP Chris Leslie - speaking for the Open Britain campaign group - said: "This whopping hit to the public finances, on top of an exit bill of at least £40bn, means less money for the NHS, for schools, for the defence budget and all our other national priorities.

"The Government can no longer conceal the grim fact that they are leading us to a new era of austerity.

"As new facts like these emerge about the monumental costs of Brexit, everyone is right to keep an open mind about whether it is all worth it."

But the Government has argued the scenarios modelled in the analysis do not cover its hoped-for post-Brexit outcome of a bespoke deal with special measures for services.

Elsewhere, the impact analysis - which was leaked to Buzzfeed News in January - says the UK will take a harder economic hit the more diverged it becomes from existing EU trade regulations.

And it says the North East of England would be the hardest hit region of the country, while London will fare the best.

See the full impact report below.