Limits on EU migration would cost the economy, government analysis shows
The government's confidential Brexit analysis shows cutting migration from the EU would cost the economy more than any gains from a US trade deal, according to a report.
Replacing free movement with arrangements akin to those for non-EU citizens would reduce growth by far more than the 0.2% boost a US trade deal could generate, according to analysis seen by BuzzFeed News. A more flexible immigration policy allowing more EU citizens to work in the UK, would still cancel out benefits of a UK deal.
On 29 January BuzzFeed revealed that the government's own analysis showed Britain would be worse off under likely post-Brexit scenarios compared with staying in the EU. The latest revelations home in on immigration, which was one of the main reasons for the vote to leave the EU in June 2016.
Prime Minister Theresa May is grappling with how to satisfy demands of Leave voters for reduced immigration without damaging the economy. Several industries have warned that tough restrictions could lead to labour shortages and higher wage costs.
The internal government document, "EU Exit Analysis – Cross Whitehall Briefing", argues the economy could also be damaged by barriers to trade such as loss of market access for certain industries and new customs and border checks. The paper was prepared for the Department for Exiting the EU and has been circulated among cabinet ministers.
The combined effect on the economy could force the UK to borrow tens of billions more by the 2030s than it would if it stayed in the EU, the paper argued, according to BuzzFeed. The leak of the analysis has put extra pressure on May's leadership. After saying it would not publish the paper, the government has now agreed to make the analysis available to MPs but not the public.