Britain ‘will be worse off whatever the Brexit deal’, a Whitehall analysis has found

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Theresa May is facing demands to publish the Government’s latest Brexit analysis following a report it had concluded Britain would be worse off, whatever deal is struck with Brussels.

As the Prime Minister prepared to fly out on a three-day trade mission to China, opposition MPs said the public were entitled to know the true cost of leaving the EU.

Mrs May leaves behind her a Conservative Party in turmoil, amid deepening unrest among MPs over the direction of the talks with Brussels.

The mood in the party will not have been helped by the leak of the latest economic impact assessment, drawn up for the Department for Exiting the EU, showing growth would be lower under a range of potential scenarios.

Jacob Rees-Mogg says analysis showing UK will lose out whatever Brexit deal it strikes is “highly speculative” (Yui Mok/PA)

That would rise to 8% if Britain left without a deal and was forced to fall back on World Trade Organisation (WTO) rules.

Alternatively, if the UK were to retain access to the single market through membership of the European Economic Area the loss would be just 2%.

Jacob Rees-Mogg, the chairman of the pro-Brexit European Research Group (ERG) of Tory MPs, said the findings were “highly speculative”.

He said  similar modelling carried out by the Treasury ahead of the Brexit referendum – predicting large scale job losses if there was a vote to leave – had been “comprehensively wrong”.

“No one voted to make themselves or their families worse off,” he said.

“The Government must now publish their analysis in full, so that MPs and the public can see for themselves the impact that Brexit will have and judge for themselves whether it is the right thing for our country.”

In response to the leak a Government source said officials from across Whitehall were undertaking “a wide range of ongoing analysis”.

“An early draft of this next stage of analysis has looked at different off-the-shelf arrangements that currently exist as well as other external estimates,” the source said.

“It does not, however, set out or measure the details of our desired outcome – a new deep and special partnership with the EU – or predict the conclusions of the negotiations.

“It also contains a significant number of caveats and is hugely dependant on a wide range of assumptions which demonstrate that significantly more work needs to be carried out to make use of this analysis and draw out conclusions.”

The disclosure comes amid anger among pro-Brexit Tories at the latest negotiating guidelines from Brussels which said the UK would remain subject to EU law – including any changes passed after it leaves in March 2019 – during a proposed 21-month post Brexit transition.

Amid fears among some Brexiteers that the Government is heading for a “soft” break, retaining many of the current elements of Britain’s relationship with the EU, Mr Rees-Mogg said the Prime Minister needed to spell out what sort of deal she was looking for.

“We would take for the first time since 1066, laws imposed on us by a foreign power without having a say over it ourselves. That may be acceptable if we have a clear idea what the end point is,” he told BBC2’s Newsnight.

The Times quoted one source close to the ERG as saying Mrs May’s chances of survival were no better than “50:50” with pleading from Cabinet ministers said to be the main reason she was still in place.

The paper said that reports were circulating among pro-Brexit MPs of a revolt at a recent dinner for Conservative donors with around a quarter arguing she should go.

Mr Rees-Mogg insisted that said he knew nothing about the reports, saying: “That is nothing to do with me.”

Meanwhile Government’s flagship Brexit bill is set to begin its passage through the House of Lords on Tuesday.

How the parties stand in the House of Lords.
(PA Graphics)

While the legislation cleared the Commons last month relatively unscathed – with only one Government defeat – it is likely to face a far rougher ride in the upper chamber which is overwhelmingly opposed to Brexit.

The main battles will come in the weeks ahead when it reaches the committee stage when peers are likely to try to push through a series of major amendments.

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