Why we need a transitional deal

The leaked government analysis of Brexit is sobering. In particular it challenges the buccaneering claims of the Brexiteer lobby, showing that free trade deals will only add around 1% to UK economic growth. This is in the long-term, and using the most positive assumptions.

Overall, growth will be 5% less than what was projected pre-Brexit, with the north hit particularly badly, slowing by up to 11%. Government borrowing will increase by up to £120bn, and large industrial sectors such as cars and chemicals will slow down by up to 12% ,while costs will go up by  up to 20%.

The Leavers' will be happy at least to hear that EU immigration may fall by up to 90,000. The report doesn't say anything about Brits fleeing abroad.

All the analysis above depends upon applying a rosy tint to our glasses - it assumes the US will not become more protectionist; that we will make advantageous trade deals with the biggest global players; and that we will continue to benefit from the trade deals we currently have via the EU and any it strikes in the near future.

High-profile Brexiteers such as Mr Rees-Mogg say the conclusions are wrong as the report does not consider the extreme Brexit they favour: dropping as many tariffs and safety regulations as necessary to encourage imports. What they omit to mention is that - according to the originator of the strategy - this would mean entire industries collapsing with massive social disruption. Not that Mr Rees-Mogg would actually notice, of course.

Meanwhile the drop in the pound - now only worth $1.27 - hasn't given us the export boost we were promised. Our current account deficit is up another £7 billion to £27 billion (Germany has a surplus of £250 billion). A large part of this is due to more expensive imports and a failure to export more. The trade deficit is now at £8.8 billion - up by nearly £2 billion.

Right now we are a full member of the EU, the largest market in the world, with no trade barriers slowing trade, no tariffs to put up prices, and yet we still have not managed to cash in. In three months we will be leaving. Let us hope that Mrs May manages to get that transitional deal, and that we use the extra time more effectively than we used the last couple of years.