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Poorest will gain most under Brexit

Date: 03 09 2017

Poorest will gain most under Brexit, says Labour report

Britain’s poorest households will be the biggest beneficiaries of Britain’s departure from the European Union, according to a report published by a prominent Labour group.

A paper co-authored by Labour Leave and a group of economists estimates that Brexit will bring a reduction in prices and immigration that will save the most deprived families £36 per week.

The group also warns that a “soft Brexit” would “leave us worse off and in danger of remaining in the EU in all but name.”

John Mills, a prominent party donor who chairs Labour Leave, said the calculations in the report show that working class Labour voters “were right to back quitting the EU” because “they will see a boost to incomes that have been heavily depressed over the last decade”.

The report comes as Caroline Flint, a prominent Labour pro-Remain MP, warns in an article for today’s Sunday Telegraph that the party should stop “forecasting disaster at every turn” and start “preparing for life post-Brexit”.

On Thursday Tom Watson said in an interview that Labour is now the party of “soft Brexit” and could keep Britain in the European single market and customs union indefinitely.

But the report warns that such ideas include a “several-year” transition period which would “postpone the gains we make by leaving”.

“More importantly, this is most likely a deliberate attempt to frustrate the existing democratic will for Brexit by deferring it in the hope that a fresh referendum can be called or an election result produced that can negate it,” it said.

Addressing the “gains” that economists have calculated that Brexit will bring to the economy, the report states: “The reduction in prices and immigration control are particularly important for lower income households.

“These households spend more on food and housing, the prices of both of which are raised substantially by EU protectionism.

“Unskilled immigrants settle in poor communities which, therefore, carry a disproportionate cost in public services as well as suffering from a fall in wages. Our estimates show that the lowest decile household would gain £36 a week from Brexit; the second lowest decile (60 per cent of the median) would gain £44 a week.”

The report, New Model Economy for a Post-Brexit Britain is published jointly by the groups Labour Leave, Leave Means Leave, whose co-chair is John Longworth, the former director general of the British Chambers of Commerce, and Economists for Free Trade, whose members include Telegraph columnists Roger Bootle, one of the City’s leading economists, and Liam Halligan, a top City commentator.

Labour Leave’s members include the pro-Brexit Labour MPs Kate Hoey and Frank Field.

September 3rd, 2017: Telegraph