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Great Britain

Boris Johnson's Brexit plan would leave everyone in the UK £2,000 worse off, study finds

Boris Johnson’s Brexit plan would leave knock up to £50bn off the economy and leave everyone in the UK £2,000 worse off, new analysis has found.

Academics at King’s College London said the plan that is the subject of intense negotiations between UK and officials would be worse for the UK economy than Theresa May’s deal.

The current proposal being discussed in Brussels would hit public finances by up to £49bn, the study found, with even that best-case scenario resulting in a £16bn fall in GDP.

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Mr Johnson’s plan would do more harm to the economy than Ms May’s, the researchers said, because it would guarantee the UK will not remain in a customs union with the EU. The prime minister is also reported to want to scrap “level playing field” standards that ensure fair competition within the UK.

Academic think-tank The UK in a Changing Europe found that Mr Johnson’s proposal would see national income per capita drop to 6.4 per cent lower than it would be by staying in the EU – the equivalent of £2,000 per person in the UK.

If the UK left the EU on the terms of Ms May’s deal, the effects would less severe, with income per capita 4.9 per cent lower – or £1,500 per person.

But Mr Johnson’s plan would be significantly better than a no-deal Brexit. The analysis found that leaving on World Trade Organisation terms would hit income per capita by 8.1 per cent – £2,500 per person.

The research concluded that all three Brexit scenarios “would reduce UK living standards compared to staying in the EU”.

While researchers said the exact figures would be influenced by a number of factors, the finding is likely to fuel fears of economic damage to the UK even if it leaves the EU with a deal.

Professor Anand Menon, director The UK in a Changing Europe, said: “In all the sound and fury over the politics of Brexit, the economic implications have been somewhat lost from sight.

“Obviously, this kind of economic modelling needs to be treated with appropriate caution. However, our estimates provide a clear indication of the broad scale of the impact of Boris Johnson’s proposal, which can be compared to May’s deal, as well as a no deal scenario.”

Professor Jonathan Portes, a senior fellow at the think-tank added: “Our modelling shows that the much more distant economic relationship with the EU envisaged by Boris Johnson will mean that the economic impacts of Brexit on trade and hence growth will be considerably more severe

“The hit to the UK public finances could be up to £50 billion a year. However, these could in part be mitigated by a more liberal immigration policy.”

The study found that tighter immigration restrictions after Brexit would damage the UK economy most, with fall of up to 1.8 per cent in GDP to be expected as a result of this policy alone if strict limits are imposed, while a more liberal post-Brexit immigration system would hit GDP by just 0.2 per cent.

The analysis suggested that Brexit will also harm the EU, with income per capita falling in all of the 27 other EU countries. While the UK would be hit hardest, Ireland would also see a fall of more than 2 per cent, and the Netherlands, Belgium and Hungary would also suffer.

Labour MP Margaret Beckett, a supporter of the campaign for a second referendum, said: "Until now, most of the media's attention has focused on what Boris Johnson's proposals would mean for Northern Ireland and the destabilistation they would cause to the peace process.

"But this report shows Boris Johnson is trying to railroad through a Brexit plan that would have a devastating impact on living standards, funding for public services, businesses and jobs or the rest of the United Kingdom too. This report shows income per capita will be £2,000 lower as a result of Boris Johnson's deal. That is £2,000 a year for every man woman and child in the UK, as trade and productivity drops."

Downing Street declined to comment.

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