Northern Ireland comes out third worst in the full version of regional assessments by HM Treasury of the impact of Brexit region by region. These were leaked to Buzzfeed last week then issued confidentially to MPs and now published by the BBC. The assessments, discounted by Brexiteers as failing properly to model their preferred option of a free trade deal, emerged in full as tensions rose once again over the implications for the border both within the British cabinet and between the UK and Irish governments.
Downing St have yet to report on the interim conclusions of today’s first session of the cabinet Brexit sub-committee, billed to decide at last on the government’s position on a transition period and their preferred end- state for Brexit. The importance of these meetings was emphasised by warnings from the Irish government to the British not to renege on their commitments on the border reached only last month.
The assessments covered three scenarios, under an EEA (European Economic Area) deal, that is, unfettered access to the single market but no customs union but with free movement, payments to Brussels and no further say in its rules; a free trade agreement as sought by the British government; ; and the no deal option of WTO World Trade Organisation rules. The North-East of England would be hit hardest – with staying in the single market and customs union shaving 3% off GDP, an 11% reduction under a free trade deal and 16% under a no-deal WTO scenario,
London would fare the best, with reductions of 1%, 2% and 3.5% in each of the three scenarios.
Scotland’s estimated hit would be 2.5%, 6% or 9%. Wales would see reductions of 1.5%, 5.5% or 9.5%.
Sky News lays them out best.
The full regional breakdown is as follows:
:: less than 1% drop in GDP (EEA membership)
:: 5% drop in GDP (free trade agreement)
:: 8% drop in GDP (WTO terms)
East of England:
It comes as a key Cabinet sub-committee tries to establish a common position on the next phase of Brexit negotiations, with top ministers due to discuss the Northern Ireland border on Wednesday.
Earlier, in the House of Commons, an MP appeared to confirm the estimated 12% hit to GDP in Northern Ireland in the event of a no-deal Brexit.
The SNP’s Europe spokesperson, Stephen Gethins, asked Northern Ireland Secretary Karen Bradley: “The Scottish Government analysis has shown that a ‘no-deal’ scenario could cost Scotland up to 8.5% of GDP.
“Government analysis suggests that Northern Ireland could be cost up to 12% of its GDP.
The report, which MPs have been allowed to read on a supposedly confidential basis, shows what officials think would happen to the economy if the UK left the EU but stayed in the single market, if it got a trade deal with the EU or if there was no trade deal. In all circumstances economic growth over the next 15 years would be less than if the UK had remained in the EU. (The figures show how much less, in percentage terms.) The government claims the figures are misleading because officials have not modelled the bespoke trade deal it hopes to achieve. As ITV’s Robert Peston points out, the figures suggest those areas that will lose most are those that voted leave ( apart from Northern Ireland which he failed to mention).
There was profound disagreement over the Irish border among the 11 members of Theresa May’s Brexit cabinet ahead of their meeting on Wednesday to discuss the UK’s negotiating strategy. Philip Hammond, chancellor, is expected to be among the ministers at the meeting arguing that only close regulatory alignment and a tight customs arrangement with the EU can prevent a hard border in Ireland, an outcome the government has already promised to avoid. Other ministers believe that any technological solution to remove the need for border checks in Ireland will take time to develop, strengthening the case for an extension to the current customs union. “It will take years to introduce,” said one. But prominent pro-Brexit ministers, including Boris Johnson, the foreign secretary, and Michael Gove, the environment secretary, think that technology can be used — including “trusted trader” schemes and number plate recognition — to remove the need for a hard border.
Before NI Questions, the DUP MP Sammy Wilson had obviously seen the local assessment, He claimed that Dublin was now threatening to block the Brexit negotiations
A recently published European Parliament report has indicated that it will be possible to have a frictionless border after we leave the EU, but is the Minister not concerned about the friction in relations between the UK Government and the Irish Republic? Will he comment on the threat issued by the Irish Foreign Minister yesterday that he will block negotiations unless legislation is introduced to force the Northern Ireland Assembly to introduce EU regulations?
“ Blocking” may be going too far but not very. But both Varadkar and Coveney at a conference in Co Louth today kept up the pressure for the UK to stay engaged with the single market and the customs union, Varadkar adding a warning to the UK not to depart from the joint Report, the fudge that may turn out not to be legally viable.
I’m sure they [the UK government] won’t want to renege on an agreement they only made a few months ago, and they would find it very hard to make any future agreement with Ireland, the European Union or anyone else in the world if they tried to depart from an agreement they made a few months ago.”