A leaked UK government report revealed on Tuesday that Britain will be worse off in all the three main possible scenarios of Brexit — whether it remains in the single market, or leaves it with or without a new trade deal with the EU.

The report, revealed by the news website Buzzfeed, suggests that the least harm will be done by remaining in the single market. The government and leading Brexiteers dismissed the report as “incomplete”, and an attempt to “undermine” Brexit. But it will be a boost to those campaigning for a “softer” Brexit.

The report “EU Exit Analysis — Cross Whitehall Briefing”, dated January and prepared by the Department for Exiting the European Union (DExEU), points to the three main scenarios: if Britain opted to remain in the single market, growth over the next 15 years will be 2 per cent lower than if it remained in the union, but still better off than a “no deal” scenario (with Britain reverting to WTO terms for its relationship with the EU), under which growth would be 8 per cent lower, or under a comprehensive free trade agreement under which it would be 5 per cent lower.

The analysis does not take into account short-term factors such as the cost of adjusting to new customs arrangements, which could further dampen growth.

Hardest hit

Among the hardest hit sectors will be those in which Indian companies are involved — cars and manufacturing — alongside others such as chemicals, retail, food and drink, while all regions of the country would be hit, particularly the North-East and West Midlands, as well as Northern Ireland.

The hit to the British economy far outweighs the positives of future trade deals. The report estimates that a deal with China, India, Australia and others would add in total 0.1-0.4 per cent to the economy in the long term, while a trade deal with the US could add 0.2 per cent.

The report was leapt upon by government critics within and outside the Conservative Party.

“Govt report says least damaging #Brexit model is #SingleMarket #CustomsUnion so let’s put country before ideology & stay in both,” tweeted Anna Soubry, a leading Conservative MP, who is one of the most prominent voices pushing for a softer Brexit.

Lexit criticism

The leak also coincided with the release of a report criticising “Lexit”, the left-wing case for leaving the EU — calling for the Labour Party to clarify its stance on Brexit, and urging the party leadership to reach a common and coherent position.

Labour Minister for Exiting the EU Keir Starmer called on the government to urgently publish its impact analysis. Addressing the House of Commons on Tuesday, Minister Steve Baker described the leak as a “selective interpretation” of government analysis and an attempt to undermine Britain’s exit from the EU.

Party infighting

The report comes amid continued infighting within the Conservative Party, after Chancellor Philip Hammond told an audience in Davos that Britain would be pushing for “very modest” changes to its relationship with the EU. Earlier this week EU leaders agreed their negotiation stance for the second phase of Brexit talks, covering the so-called transition period, currently proposed to be for two years, which would ease Britain’s exit from the union.

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