Author Archives: Chuka Umunna

Chuka Umunna MP writes…Lib Dems are the only party committed to stopping Brexit and tackling the causes of Brexit

As the Conservative leadership contest draws to a close, with both Boris Johnson and Jeremy Hunt putting fresh paint on the impossible red lines set out by the Leave campaign, the threat of a a No Deal Brexit is closer than ever.

Both candidates are disregarding all the facts about the disastrous consequences this would have for the UK, with Boris Johnson even searching for ways to suspend Parliament to circumvent MPs to run down the clock to exit day.

Such a move would not only be a democratic outrage, but herald one of the most destructive acts of self harm on the UK ever willingly committed by our government. 

On Thursday, the Office for Budget Responsibility published its fiscal risks report. Commissioned in 2015, the report sets out to analyse the risks to public finances over the short to medium term. 

This year, the OBR devoted an entire chapter to assessing the risk of a No Deal Brexit to the UK’s finances and the findings were jaw-dropping.

Here are just 10 things the OBR warns would happen under Boris Johnson’s No Deal Brexit scenario:

1) The UK would enter a “year-long recession” at the end of 2019, with real GDP immediately falling by 2.1%.

2) The value of the pound would depreciate by 10% immediately, and remain low until at least 2024.

3) Business investment would drop due to trade costs, economic uncertainty and loss of some export markets.

4) Residential Investment and consumer spending would fall as real household income is squeezed.

5) Productivity growth would become even weaker, and remain below current projections until 2024. 

6) The growth in earnings would slow even further and remain so for the first few years.

7) Real wages would become “significantly lower”, by as much as 2.5% by 2024 compared to the last forecast.

8) Borrowing would be around £30bn a year higher from 2020-21 onwards due to tax receipts falling. This means no fiscal headroom at all for any of the tax and spend promises of Boris Johnson or Jeremy Hunt, or to allow the government to end austerity.

9) The overall impact of a No Deal Brexit and then trading on WTO rules would be a hit to GDP of 5.9%.

10) If a No Deal, WTO Brexit was combined with a stricter immigration policy for EU citizens, this hit to GDP would rise substantially, potentially as high as 9% according to the Government’s own figures.

On top of this, Brexit has already resulted in a weak pound, which has lost 17% of its value against the dollar since the 2016 vote; higher inflation; big falls in manufacturing output, construction, and business investment; and we have not even left the EU yet. 

Posted in Op-eds | Tagged , , and | 19 Comments
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Recent Comments

  • User AvatarYousuf Farah 21st Nov - 2:02am
    I guarantee that Labour and Tory manifestos will be full of all the fantasy policies and money-growing-on-trees economics that they've been saying seen they started...
  • User AvatarDavid Allen 21st Nov - 12:52am
    Gloom-monger reporting for duty sah! This is a lot better. We still crucially need to find a credible way to Stop Brexit, but this strong...
  • User AvatarDavid Allen 21st Nov - 12:45am
    I'm pleased to see some new flexibility, with the belated recognition that we need to work with others if we are to Stop Brexit. Three...
  • User AvatarJoseph Bourke 21st Nov - 12:38am
    Sandra Hammett, "So if the Tories and Labour don’t shift meaningfully, are we to make pact (if the numbers are there to form a majority)...
  • User AvatarTony Greaves 20th Nov - 11:46pm
    Hm. This all looks a bit London-centric to me. If it means freezing regulated fares it should say so, not just for commuters. And if...
  • User AvatarDavid Becket 20th Nov - 10:49pm
    @RossMcL. I would agree, it is full of ideas we can sell