Brexit: Cost of reduced EU migration far greater than benefits of US trade deal, leaked analysis shows

Impact of replacing free movement with stricter immigration controls will hit economy hard, secret Whitehall analysis concludes

The cost to the UK economy of cutting migration from the EU would swallow up the benefits of a US trade deal, according to the Government’s leaked impact assessment.

The impact of replacing free movement with stricter immigration controls similar to those for non-EU citizens would far exceed the expected boost of a US deal, Whitehall officials calculated.

It emerged this week that analysis conducted for the Department for Exiting the EU (DexEU) concluded Britain would be worse off after Brexit regardless of the terms of the country’s departure from the EU.

Growth was forecast to decline under three likely scenarios modelled in the document, obtained by Buzzfeed News.

The analysis – compiled secretly by officials across Whitehall – also forecasts impact of several potential immigration policies after the UK leaves the EU.

It concluded that even a more flexible policy that led to a smaller drop in migration from the EU would outweigh the 0.2 per cent increase in economic growth that a US trade deal is expected to bring.

Liberal Democrat leader Sir Vince Cable said: "The view that restricting immigration is a positive thing, something this Conservative government have only encouraged, has been starkly contradicted by their own analysis.

"This analysis shows a fall in EU migration is far from cost free. The resulting loss of skills and government revenue means any trade deal with the US won't even begin to bring in the cash lost by a clamp down on migration post-Brexit.

"As the government's own evidence against their blinkered hard Brexit agenda begins to mount, the British people must be given their say on the final deal with the option to exit from Brexit."

The analysis was reportedly being presented to key Cabinet ministers in one-to-one meetings ahead of a Brexit sub-committee next week and was not intended to be made public.

But ministers were forced into agreeing to release the document after coming under parliamentary pressure from Labour and critics on the Tory benches

Government sources said the document was “incomplete” and “produced without ministerial sign-off”.

But Downing Street said the PM had seen a first draft of the analysis last week.

A Government spokesperson said: "The UK will remain an open and tolerant country; one that recognises the valuable contribution those with skills and expertise make to society while also ensuring there is control of the overall numbers of migrants that come to the UK.

"As we leave the EU, we will forge new and ambitious trade deals around the world, with trading partners old and new."