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Brexit will cost the government £58.7 billion over the next five years, figures from the Office for Budget Responsibility (OBR) have suggested, in analysis which lays the bulk of £122 billion in new borrowing announced in the Autumn Statement at the door of the 'no' vote.
The OBR has dramatically raised borrowing forecasts and cut growth estimates from its previous predictions, delivered alongside last year's Budget and predicated on the UK voting to remain in the European Union.
But it has also published forecasts for government borrowing had 'remain' prevailed in the EU referendum. These would have shown higher borrowing levels than its estimates at the time of the Budget, albeit not by the same degree as today's figures.
Borrowing would have hit £63.8 billion next year rather than £55.5 million and £46.5 billion in 2018 compared with March's £38.8 billion. The government would have delivered a budget surplus in 2020 in line with former chancellor George Osborne's pledge, although the £1.1 billion estimate gives much less wriggle-room than the £10.4 billion forecast alongside the Budget.
Those borrowing rises pale in comparison to the £122 billion of extra borrowing announced in the Autumn Statement as, according to the OBR, £58.7 billion of that is related to the UK leaving the EU.
The OBR outlined a series of Brexit-related factors driving this higher borrowing. The biggest of these, lower productivity growth, accounts for £18.1 billion of extra borrowing.
'This feeds through to weaker growth in earnings, profits and consumer spending, all of which reduce receipts. But it also feeds through to weaker growth in business investment, which boosts receipts by reducing the use of capital allowances,' the OBR said.
Almost as big a hit comes from lower migration. Had the UK voted to stay within the EU, the OBR would have revised up migration estimates, helping to boost the economy and reduce government borrowing. But it has now kept migration estimates at the same level it was predicting in March, adding £18.1 billion of borrowing over the next five years.
The OBR said its estimates should be treated as 'illustrative' but that it wanted to show the impact of the 'leave' vote on its forecasts.
'It is reasonable that people should ask: what difference has the decision to leave the EU made to your fiscal forecast?' it said.
'To answer the question requires us to distinguish after the event between roughly what the forecast might have looked like in the absence of the referendum result and the forecast we have actually published.'