True Cost of Brexit


One of the main claims of the Leave campaign pre-referendum was that we would be able to pay the £350 million a week we pay to the EU into the NHS instead. This claim has not been repeated since then. Why? Because it is a lie. And what’s more they knew this when they made it! Along with the other well documented lies and misrepresentations they made.

Why was it a lie that they knew full well about? Well because, whilst £350 million a week may be the gross cost we pay to the EU each week, it ignores what we get back from the EU. From this gross contribution of £17.8 billion per annum we get back from the EU

    • Our rebate of £4.9 billion
    • £4.4 billion which the EU gives the UK to spend here on such things as agriculture support, regional development grants, research and development etc.

All of this leaves a widely accepted net contribution of £8.5 billions a year, less than 50% of that claimed by the Leave Campaign pre referendum.

According to Full Fact, an independent Brexit monitoring organisation, this sum should be discounted further by the £1.4 billion the EU gives the private sector and the £0.8 billion of EU aid spending that should be counted against our target, leaving a final net contribution of £6.3 billions a year, a little over a third of that claimed by the Leave Campaign.

But what is Brexit going to cost us? For a start the Chancellor has said that we need to borrow £58 billions over the next five years alone to cover costs directly incurred by Brexit. The EU has said that the cost of the “divorce” will be between €40 – €60 bn, while the Financial Times said it could be as high as €100 bn. It is widely accepted that inflation will increase at a faster rate than earnings so everyone will be see their incomes squeezed. Brexit negotiations will be so complex that it is reported that an additional 30, 000 civil servants will be needed alongside an army of Consultants reportedly charging up to £5000 per day!

In addition to all this the Treasury estimates that

    • By 2031 GDP would be between 5.4% and 9.5% lower if we leave the EU on “hard” Brexit terms which Mrs. May has set her stall out on. On average this equates to a cumulative hit to the economy of £144bn a year, equivalent to over £7,500 for every household in the country over this period!
    • By 2031 the net impact of Brexit on public sector receipts would be a reduction of between £38bn and £66bn a year. That’s more than double the current NHS funding shortfall of £22bn and over three times the falsely claimed £350 millions per week for the NHS. So not more money for the NHS, rather the reverse and even more austerity!
    • And even then the well respected Centre for Economic Performance considers that the Treasury’s estimates significantly underestimate what the negative impact of a “hard” Brexit will be, so it could be even worse!

All of this means that Brexit will not save us money, it will cost us money, at least £4,000+ over the next five years alone for every household in the country or as much as £9,500+ according to the London School of Economics.

“Nobody voted for Brexit to be worse off” according to the Chancellor, Phillip Hammond, but it now looks as though that is the reality of the situation we will find ourselves in.

Is it not time to face up to this reality before it’s too late?