The UK government has produced a flurry of position papers in recent weeks in an attempt to flesh out its thinking on Brexit. But Whitehall’s internal assessments of the impact of leaving the EU on specific sectors of the UK economy have not seen the light of day.
The government’s reluctance to publish them has been one of the most controversial, and widely discussed, features of its approach to Brexit.
Ministers may believe that publication would undermine their hand in the Brexit talks by revealing what various negotiating outcomes might mean for each sector of the UK economy. But the government’s unwillingness to publish these documents means the public remains in the dark about Whitehall’s internal analysis over the economic impact of Brexit.
The only official assessments of the economic consequences of Brexit to have been made public are two papers produced by the Treasury during the EU referendum in 2016, and these are presumably out of date.
It is not clear exactly how many impact assessments have been conducted by the government. But in recent weeks there have been reports of several that could influence the debate on Brexit if they were revealed.
First, there is an analysis produced by the Market Access team at the Department for Exiting the EU on what a range of Brexit negotiating outcomes would mean for more than 50 sectors of the economy.
James Chapman, former chief of staff to Brexit secretary David Davis, referred to this document in a tweet this week. “Why won’t @DExEUgov publish its analysis of impact of hard Brexit on 50+ sectors? Could it be concerned it might put voters off the whole idea?”
The document is said to be a massive piece of work that acts as a kind of “bible” for UK Brexit officials as they sift through negotiating options. Circulation is said to be highly restricted inside government because of its political sensitivity.
The second document is a Treasury analysis of the economic benefits to the UK of future free trade agreements with non-EU states.
Charles Grant, of the Centre for European Reform, first revealed the existence of this paper back in June. It is said to show that the value of new FTAs would be significantly less than the economic cost of leaving the customs union.
The findings underpin Philip Hammond’s argument that the UK needs to stay close to the customs union in a post-Brexit transition. But the paper, if published, might also strengthen the argument (being considered by Labour) that the UK needs to stay in the customs union permanently.
A third piece of work that could be significant is a study by the Migration Advisory Committee, an independent body, on what a post-Brexit immigration policy could mean for migrant flows to and from the EU. This piece of work was only commissioned by the government in July and the MAC is not due to report back until September 2018 — just six months before the UK leaves the bloc.
The fact that the work has been initiated so late is a sign of how fearful Downing Street is that impact assessments could leak and undermine the case for Brexit.
Parliament is now entering a critical period in which it needs to vote on Brexit-related legislation. Whether MPs will get to see these impact assessments before they take key decisions remains to be seen. But one former mandarin says it is extraordinary that parliamentarians have not complained more vociferously at how poorly informed they are.
“The papers they have been given so far by ministers are woefully thin. Meanwhile, they have never seen the assessments that show what the impact of leaving the single market would mean for specific sectors of the economy, especially services. Having that analysis is critical if you want to judge whether the UK should really be leaving the EU at all.”
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Pound leaps to highest level since Brexit vote
Roger Blitz and Kate Allen write: The pound leapt above the $1.36 mark on Friday to its highest level since the Brexit vote, as a speech from a Bank of England policymaker hardened perceptions that the central bank is moving to raise interest rates for the first time in a decade.
Gertjan Vlieghe, a member of the bank’s Monetary Policy Committee who has previously been cautious about tightening policy, said “we are approaching the moment when the bank rate may need to rise”.
Coming a day after the MPC kept rates on hold, but gave a heavy signal it is minded to raise the base rate from a record low, the speech added fuel to the pound’s rally.
Investors sold shorter dated government bonds, which are sensitive to changing expectations for the base rate, pushing the yield up 10 basis points to 0.47 per cent. That is the highest level since the week before the EU referendum in June last year.
UK stocks were also hard hit by the sterling move, with the FTSE 100 index sliding 1.3 per cent.
“The BoE really have lined up the market for a hike,” said Jordan Rochester, a currency strategist at Nomura.