Theresa May’s proposals for the UK’s relationship with the EU after Brexit – set out in the white paper but known as the Chequers plan, because it was finalised at an all-day cabinet meeting at Chequers – are a lot “softer” than people expected when she first became prime minister. But, according to a thinktank report out today, the economy would still suffer quite badly. The National Institute of Economic and Social Research has published its latest economic review and it says Chequers would cost the economy the equivalent of £500 per person per year in lost output. And, of course, a no deal Brexit would be even worse.
Here’s an extract from its news release.
Our central forecast under a ‘soft Brexit’ scenario is that the economy will grow at a pace that is consistent with its potential. This translates to annual GDP growth of 1.4 per cent this year and 1.7 per cent next year, which is broadly unchanged from our previous forecast …
As before, the central forecast has been conditioned on a ‘soft’ Brexit assumption where the UK achieves close to full access to the EU market for goods and services. If instead of this soft Brexit scenario we assume that the government achieves the somewhat more restrictive white paper proposals, the output loss will amount to £500 per person per year over time compared with the soft Brexit scenario. The loss would be around £800 under a ‘no deal’ Brexit. These estimates do not include the likely impact on productivity which could, on some estimates, double the size of the losses.
Output is a measure of what the economy produces. An output loss is not the same as a loss to household income. But it is a way of saying the country would be getting poorer, and that does ultimately impact on family finances.
My colleague Larry Elliott has written up the report overnight here.
It’s another quiet, recess day at Westminster. The only item on the government’s news grid is Jeremy Hunt, the foreign secretary, meeting his Austrian opposite number Karin Kneissl in Vienna for talks. Austria holds the presidency of the EU at the moment, which means it is a more influential EU player until the end of the year that it otherwise would be.
And, of course, the Labour party is still embroiled in a row about antisemitism. In the latest development, Jeremy Corbyn has apologised for speaking at an event where the actions of Israel in Gaza were compared to the Nazis. My colleague Sarah Marsh has the details here.
As usual, I will also be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to post a summary at the end of the day.
You can read all today’s Guardian politics stories here.
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