Downing Street Distances Itself From George Osborne's '£66 Billion' Brexit Warning

Study was done 'some time ago'
Peter Byrne/PA Wire

Downing Street has distanced itself from a controversial Treasury report that claimed the UK will lose £66bn a year after ‘hard’ Brexit.

No.10 said that the study used in the EU referendum campaign was just “research” from “some time ago” and that the Government’s focus was on the future.

In what appeared to be a further break with David Cameron and George Osborne’s reign, the Prime Minister’s spokesman repeatedly refused to say that the April Treasury assessment was still the position of the Government.

The warning of an annual £66bn hit to the UK economy from lost tax revenues after Brexit was highlighted in the document, which was pushed by Osborne at the height of the referendum battle.

The paper says: “The Treasury estimates that UK GDP would be between 5.4 per cent and 9.5 per cent of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5 per cent.

David Davis
David Davis
PA/PA Wire

It warned that GDP could fall by as much as 9.5% if Britain leaves the single market and has to rely on World Trade Organisation rules for trading with the continent.

Such a massive fall in tax revenue – equivalent to 65% of the entire annual NHS budget - would force ministers to slash public spending or raise taxes.

The Times revealed today that the Treasury calculation was included in official papers for a Cabinet committee, prompting pro-Brexit ministers to protest that it was “withdrawn from reality” and “not very realistic” because it did not assume the continuation of any trade deals.

Brexiteers suggested that the Treasury was continuing to campaign using ‘Project Fear’ scare it deployed during the referendum.

Some accused the Treasury of “trying to make leaving the single market look bad” by including the figures, with a “not very realistic” hypothesis to scare colleagues.

Labour peer Lord Wood said that current Chancellor Philip Hammond appeared to be conducting a rearguard action against ‘hard Brexit’.

Feels more & more as though the Treasury has decided to conduct a guerilla war inside the government against Hard Brexit.

— Stewart Wood (@StewartWood) October 10, 2016

The No.10 spokesman said on Tuesday: “These figures that have been quoted today aren’t new, they were around some time ago.

“That was research that was carried out. The figures were produced some time ago. We have a very clear, precise focus that’s looking fowards to triggering Article 50 by the end of March.

“I’m not going to get into reheating the arguments that were made during the referendum campaign.

Shadow Chancellor John McDonnell said: “The Tories should be sticking to their manifesto promise and fighting tooth and nail for access to the single market.

“Instead they are abandoning Britain’s clear national interests by putting narrow party political concerns first.”

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