Press

A study yesterday revealed that Brexit is already costing the public purse £500m a week. The Centre for European Reform’s analysis found the UK economy is already 2.5% smaller than it would have been had Remain won the referendum.

The British economy is 2.5 percent smaller today than if the UK had voted to remain in the European Union, according to the Centre for European Reform, a think-tank. In a report published Sunday, the think tank said the UK suffered a £26 billion blow to the economy annually, equivalent to £500 million a week, without yet having formally left the bloc.

The Centre for European Reform, which describes itself as “pro-European but not uncritical”, said it created a model of how Britain’s economy could have performed had the campaign to remain in the EU won the referendum in 2016. The group said its analysis was based on 22 advanced economies whose characteristics closely matched Britain and that did not vote to leave the EU. They then compared it with Britain’s actual economic performance since the vote.

Sam Lowe, a senior research fellow at the Centre for European Reform, said the idea of the Chequers plan is that the UK would run two tariff regimes at the border — the EU’s and the UK’s.

“A long-term customs union would reduce the number of checks necessary between Northern Ireland and Great Britain, since tariffs and rules of origin would not be an issue. And, as tempers cool over time — and if the wave of populism that currently threatens the EU recedes — it may be possible to bolt on shared rules and standards to the customs union, so that it gets closer to membership of the single market in goods. This strategy would amount to a ‘de-dramatisation’ of Chequers in order to make it more palatable to the EU, but it would not remove the need to agree a backstop.” (Sam Lowe and John Springford of the Centre for European Reform)

Sam Lowe and John Springford at the Centre for European Reform plot the path to a Brexit fudge on the Northern Irish backstop — but warn it could drag on until 2019: “The negotiations could well run into the New Year. If the UK is to capitulate, as the EU expects it will, it is difficult to see it happening while there is still time to negotiate further.”

Sam Lowe of the Centre for European Reform tweeted that the report "has not been thought through", and that their response to EU non-cooperation was counter-intuitive to the vision of the report.