No Downsides To A 'Hard' Brexit? The Government Is Living In A Parallel Universe

11/10/2016 12:25
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In the parallel universe inhabited by government ministers, Brexit is presenting absolutely no problems to Britain whatsoever. Just yesterday, David Davis airily said that there is "no downside" to Brexit. No downside. At all. Encouraging, isn't it?

But in the real world, sorrows are coming in battalions. Take today's bombshell revelation in The Times that leaked Treasury reports (kept secret by ministers) forecast a loss to the public finances of as much as £66billion a year if Britain leaves the EU Single Market and trades with the EU under World Trade Organisation rules.

Under this scenario, British services companies would no longer be able to operate freely across the EU, as they do now. Many would be forced to open new offices in Frankfurt or Paris, shifting jobs and economic activity. And manufacturers and farmers would face crippling new tariffs on products they sell to the EU, from 10% on cars to 40% on lamb. This would price our products out of the European market. The upshot would be fewer exports, less wealth being created, higher unemployment, and lower tax receipts. A poorer Britain, grappling with an astonishing black hole in the public finances.

Leavers will dismiss this as rot, and complacently talk of how German car companies will never allow tariffs to be imposed. It will come as news to the leaders of France, Italy, Poland and indeed Germany to learn that the European Union is in fact run by German car executives - because it isn't true. The truth is that, as both David Davis and Liam Fox have admitted, it is absolutely possible that Britain could fail to negotiate a free trade agreement with the EU in the time allotted, and would therefore fall onto the rocks of the WTO model.

The appalling irony is that, under the Treasury's nightmare scenario, it is the NHS that would be worst hit. Remember the huge bus that Vote Leave drove around the country, promising greater funding for the Health Service if Britain voted to leave? Remember the sign Boris Johnson posed in front of, which read: 'Let's give our NHS the £350million the EU takes every week'? Well, the reality is that a Hard Brexit is by far the biggest threat to the NHS. Perhaps Boris Johnson could tell us what proportion of that £66billion will come out of the health budget, should it come to it.

Behind the headline figure, the reality of a Hard Brexit is simple - fewer doctors, fewer nurses, fewer wards, fewer ambulances. A shrunken NHS that is far less able to deal with the health challenges of the future.

But we can stop this happening. Britain is leaving the EU, but we need not leave some of the best aspects of membership. So the government must push for Britain to be a full member of the Single Market. It is our biggest customer, a key factor in our economic success, and should be the government's first priority in negotiations with Europe. There are few downsides to our continued membership of the Single Market, but there are huge downsides involved with leaving our biggest market - for the economy, for jobs, and for our NHS.

Chuka Umunna is the Labour MP for Streatham and chair of Vote Leave Watch