UK’s Losses from Brexit Already Exceed Its Payments to EU Budget, Study Finds

UK’s Losses from Brexit Already Exceed Its Payments to EU Budget, Study Finds

Two years after the UK voted in a narrow referendum to leave the European Union, the British losses from the upcoming Brexit have already surpassed the British contributions to the EU budget, according to a new study.

Two years after the UK voted in a narrow referendum to leave the European Union, the British losses from the upcoming Brexit have already surpassed the British contributions to the EU budget, according to a new study.

The London-based Center for European Reform (CER), a pro-EU think tank, has found that the uncertainty caused by Brexit, which is set for March 2019, has already brought about a 2.1% decline in the UK’s economic output.

“The British economy is now 2.1% smaller than it would have been if, two years ago, Britain had voted to stay in the EU,” concludes the CER study using a computer simulation comparing the economic performance of the UK with that of other OECD countries based on data since 1995.

According to the think tank, the 2.1% GDP loss has translated into EUR 26 billion (GBP 23 billion) in lost tax revenue.

This is therefore refusing the UK any sort of a “Brexit dividend”, i.e. the notion that funds saved from the British contributions to the EU budget would be invested in the public services of the UK.

CER reminds of Vote Leave’s 2016 referendum campaign promise that the GBP 350 million per week the UK contributes to the EU budget would be spent on the British National Health Service after Brexit.

“Our estimate shows there is no Brexit dividend. The Leave vote is now costing the [UK] Treasury GBP 440 million a week,” writes John Springford, Deputy Director of the Center for European Reform.

Springford acknowledges that the British economy has “outperformed expectations in the aftermath of the [Brexit] referendum”.

Yet, he emphasizes that the UK has now become the slowest growing economy in the G7, falling behind Italy, with a growth of only 0.1% in the first quarter of 2018.

CER also reminds that the Office for Budget Responsibility, the very fiscal watchdog of the UK government, has predicted that Britain’s exit from the European Union is going to affect negatively the British economy, and thus reduce tax revenues.

“So far, our analysis shows the Remain campaign – and the vast majority of professional economists – have been closer to the truth,” the London-based think tank notes with respect to the claims made during the Brexit referendum two years ago.

(Banner image: Pixabay)

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