Brexit is already costing our public services more than the "side of a bus" £350 million a week
Originally published by Newcastle upon Tyne Liberal Democrats
The Liberal Democrats have revealed that Brexit is already costing the government £380-470 million a week - money that could have been spent on the NHS instead.
The Institute for Fiscal Studies (IFS) has estimated that GDP is £55-66 billion lower this year than it would have been without Brexit, mainly due to uncertainty deterring business investment. Business investment in the UK has fallen by 3% since the end of 2017, whereas other G7 countries have seen it grow.
Based on the IFS figures, the Liberal Democrats have calculated that public sector receipts (which are 37% of GDP) are £20.3-24.3 billion lower this year than they would have been, which equates to £380-470 million a week.
Commenting on the figure, Liberal Democrats Shadow Chancellor Ed Davey said:
"Boris's lie on the side of a bus was an even bigger whopper than we thought. Not only does Brexit not mean an extra £350 million a week for the NHS, it actually means £350 million a week less - and that's before we've even left.
"If Boris Johnson wins a majority on Thursday, his disastrous hard Brexit will suck even more money out of our economy and our public services. Only the Liberal Democrats can win seats from the Tories and deny Boris a majority.
"That's why every vote for the Liberal Democrats is a vote to stop Boris, stop Brexit and invest the £50 billion Remain Bonus from higher economic growth to build a brighter future."
In their Green Budget 2019, published in October, the Institute for Fiscal Studies said: "GDP is roughly 2.5-3.0% (£55-£66 billion) below where we think it would have been without Brexit. Based on pre-crisis forecasts and global economic performance in 2017 and 2018, we suspect the UK has missed out almost entirely on a bout of global growth, which would normally have boosted exports and investment."
According to the Office for Budget Responsibility's latest Economic and fiscal outlook, published in March, public sector current receipts in 2019-20 are forecast to be 36.9% of GDP.
Taking the lower end of the IFS's estimate for lost GDP (£55 billion a year) implies that public sector receipts are roughly £20.3 billion a year (36.9% of £55bn) lower than they would have been without Brexit. This equates to a weekly figure of £388 million (£20.3bn*7/366).
Taking the upper end of the IFS's estimate for lost GDP (£66 billion a year) implies that receipts are roughly £24.3 billion a year (36.9% of £66bn) lower than they would have been. This equates to a weekly figure of £466 million (£24.3bn*7/366).
Business Investment data is published by the Office for National Statistics as series NPEL. It has fallen from £50.7 billion in Q4 2017 to £49.2 billion in Q3 2019. It has fallen in 6 of the last 7 quarters.