New research finds UK will be only ‘marginally more productive than Lithuania’ after Brexit
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British productivity following Brexit would fall below the European average for the first time since records began, new research has found.
The research - commissioned for the People’s Vote campaign - found that under the prime minister’s Brexit deal, productivity in the UK would be significantly lower than if we were to Remain in the EU, and the UK would be stuck in Europe’s slow lane.
Analysis by the National Institute for Social and Economic Research shows that the government’s Brexit plan will have a negative impact on UK productivity growth caused by less trade leading to less competition and innovation, while less investment will harm the economy, combined with a reduction in demand, particularly from exports.
The UK under the government’s Brexit plan would be less productive than the average for the EU for the first time since records were compiled, and would only be marginally more productive than Lithuania, Turkey and Latvia.
The economy has struggled with sluggish productivity growth for years and, while the government is trying to combat this through its own industrial strategy, Brexit will only make it even more difficult to tackle.
In addition to the research, separate new data has revealed that business leaders’ confidence in the British economy has plummeted, and the cautious optimism shown by company bosses earlier in 2018 has now entirely gone.
According to a survey carried out by the Institute of Directors there is optimism for the future for directors’ own organisations, but the response for the economy overall was a net minus 38% - the lowest for 18 months.
Stephen Doughty MP, leading supporter of the People’s Vote campaign, said it was clear Brexit was set to make Britain less competitive.
He said: “Productivity is one of the most fundamental elements of the UK’s standard of living and is a vital part of lifting people out of poverty and crucial to our economic success. This new analysis shows that under Theresa May’s deal the UK is sliding down the league table of productivity making us less competitive and worse off.
“There is no kind of fantasy Brexit deal that can meet all the promises made. The real choice now is whether to go ahead with a Brexit deal that will make us worse off or stick with the deal we already have as members of the EU. The only way forward now is a People’s Vote - that’s why the final decision should now be handed back to the people.”