Boris Johnson’s Brexit plan is ‘unrealistic’ and would cut £28bn from economy, experts warn
- Credit: ITV
Boris Johnson's Brexit plan would reduce the UK economy by almost 2%, according to independent trade experts.
The UK Trade Policy Observatory (UKTPO) said leaving the European Union and switching from frictionless trade to a free trade agreement would cause an economic downturn of 1.8%.
Even if trade deals with the US, Australia and New Zealand were agreed at the same time as writing a Brussels deal, the Conservative Party leader's withdrawal plans would still see UK output decline by 1.4%.
According to BBC Two's Newsnight, the programme that first published the research, such a hit would cut £28 billion from the economy and make each household in the country £1,000 worse-off.
Michael Gasiorek, a professor of economics and a fellow of UKTPO, said the relatively low tariffs Britain has on most US goods meant a free trade agreement with president Donald Trump would not off-set the damage done by leaving the single market and customs union.
You may also want to watch:
"Nearly 43% of UK trade is currently with the EU, while under 12% is with the US," Prof Gasiorek said on UKTPO's website.
"Reducing barriers on 12% of trade simply cannot compensate for increasing barriers on 43% of trade.
- 1 Piers Morgan must expose the government's Brexit betrayal
- 2 Boris Johnson warned majority will be 'wiped out' over treatment towards north of England
- 3 Boris Johnson 'frantically repositioning' himself for Donald Trump to lose election
- 4 UKIP set to select 'Dr Gammons' as candidate for London mayoral election
- 5 James Cleverly mocked after telling people to 'look at how they're doing in Wales'
- 6 Brexiteer Prue Leith quits Tory Party after government votes down motion to protect UK food standards
- 7 Peers set to remove law-breaking sections of Boris Johnson's Brexit bill
- 8 Public slams Brexit Party tweet which shames Tory MPs who voted against free school meals
- 9 Minister says Dido Harding is working '19-hours a day' on Test and Trace
- 10 Second shop owner bans Tory MPs who voted against free school meals motion
"For every 1% reduction in trade with the EU, in order to compensate for this, a deal with the US would have to increase trade by three to four times as much. This is not feasible."
Leaving the EU would, in a best-case scenario, lead to a "stimulated decline" in imports to the tune of 7% and exports would see a 12% dip, said the University of Sussex academic.
In terms of transatlantic imports, there are currently zero tariffs on the majority of UK goods going into the US and only 12% of exports to the US face a tax greater than 5%, he added.
Mr Gasiorek and colleague Nicolo Tamberi, a research assistant, said the prime minister's ambitions for 80% of the UK's trade to be carried out on a free trade basis, as stated in the Tory manifesto, was "unrealistic".
They said: "This is clearly unrealistic, because it would require signing agreements with more than 12 countries within a timescale which has rarely been achieved for a single agreement."
Mr Johnson, if returned to Downing Street by voters, plans to have his Withdrawal Agreement signed off by MPs by January 31 and is committed to finalising a trade deal with the EU before the end of 2020.
Michael Barnier, the EU's chief negotiator, has already cast doubt on the prospects of agreeing trade terms within 11 months.
The UKTPO, partnered with Sussex University and Chatham House, an international affairs think tank, said it had analysed the effect of a US trade deal on 148 industrial sectors of the economy.
It found agriculture and food processing were most at risk from a US trade deal, while the services economy, such as banking and accounting, would be boosted in regions such as the South East, London and Scotland.
A Conservative Party spokesman told Newsnight: "The Prime Minister's fantastic deal makes clear that we will have a future relationship based on free trade and friendly co-operation.
"By striking trade deals around the world we will create exciting new opportunities for British businesses."
The Tory manifesto claims free trade is the "best way" to increase exports, cut prices and increase investment.
Become a Supporter
The New European is proud of its journalism and we hope you are proud of it too. We believe our voice is important - both in representing the pro-EU perspective and also to help rebalance the right wing extremes of much of the UK national press. If you value what we are doing, you can help us by making a contribution to the cost of our journalism.