Britain will be on course for more distant economic ties with the European Union, making the country poorer, if Prime Minister Boris Johnson wins parliamentary backing for the Brexit deal he clinched with Brussels on Thursday.
Compared with the deal his predecessor Theresa May reached last year – which parliament rejected three times – Johnson’s deal aims for less regulatory alignment with the EU, and greater trade barriers between Britain and its largest trading partner.
Johnson now faces a fight to convince parliament, where his Conservative Party lacks a majority, to approve the deal in a vote due to take place on Saturday.
“Even if Boris Johnson does manage to close the deal, investor celebration of this might soon be dampened by the recognition that this is a fairly hard Brexit,” said Paul O’Connor, a fund manager at Janus Henderson.
Britain’s finance ministry and almost all external economists have forecast that increased trade barriers will cause the British economy to grow more slowly than if it were to stay in the EU, and the damage increases as trade barriers rise.
Based on what was known of Johnson’s plans last week, UK in a Changing Europe estimated that they would make Britons more than 6% poorer on a per capita basis than staying in the EU in the medium term.
Meanwhile Britain’s main opposition Labour Party cannot support the Brexit deal, its leader Jeremy Corbyn said.
“As it stands we cannot support this deal – also it is unclear whether it has the support of his allies in the DUP, or indeed, many allies on his own backbenchers,” he said.
Asked whether he would put forward a motion of no-confidence to try to bring down Prime Minister Boris Johnson during a planned extraordinary session in parliament on Saturday, Corbyn said the weekend was a time to discuss the Brexit deal and other issues would be for next week.