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A report by the London School of Economics (LSE) claims “Brexit will have a profound impact on the UK economy”, as it warns business conditions will worsen for most sectors, even those that managed to avoid the negative impact of the coronavirus lockdown. In response one Tory MP has suggested the document exaggerates the negative impact of Brexit on the economy and argues the pandemic will have caused the brunt of the downturn.
The report, ‘COVID-19 and Brexit: Real-Time Updates on Business Performance in the United Kingdom’ by the LSE’s Centre for Economic Performance, warns Brexit will negatively impact the UK economy as new structures arise at the conclusion of the EU transition period.
It states that transitioning to new trade and investment rules will be difficult and costly for many businesses.
One of the paper’s authors, Josh de Lyon, a research assistant at the LSE centre, even predicts the “biggest slowdown of our lifetime” is on the way.
But Tory MP Jo Gideon has criticised the report and argues the coronavirus will have the largest and most overarching impact on the UK’s economy.
Ms Gideon, who became the first Tory MP to win the Stoke-on-Trent Central seat in the December 2019 election, also believes the UK is strong enough to withstand the economic downturn – especially once we have completely left the EU.
She told Express.co.uk: “I think the economy will be impacted far more by the coronavirus than Brexit.
“The economic independence that we gain will ultimately be in the best interests in businesses and people.
“It will probably be hard to quantify with an economic downturn as a result of the pandemic, what element of that downturn would have been different had there been a different outcome to the referendum.
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“Those who wish to attribute it to Brexit will no doubt do that.”
The MP added: “There isn’t a country in the world that won’t be affected by the fallout of the pandemic on their economies.
“I think the resilience that this country has shown and the spirit that we have experienced during COVID will stand us in good stead going forward to seize new opportunities.”
The LSE report does acknowledge that the pandemic caused the worst recession in more than three centuries, as GDP plunged by a whopping 20 percent in April.
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It states a “simultaneous impact” from Brexit and coronavirus will be felt across the business spectrum.
But as Ms Gideon points out, it will be hard to distinguish the impact of Brexit to that of the global pandemic.
Yet the report states: “The two forces of COVID-19 and Brexit are impacting more sectors of the economy than each would in isolation.”
The Tory MP suggests the Government need to focus on “reformatting and reshaping the economy”, which the Chancellor has already started to do through his unprecedented economic plan and job retainment scheme.
Ms Gideon said such interventions wouldn’t have been possible had the UK stayed in the UK.
She said: “That’s the key thing. Government interventions in terms of boosting the economy and targeting support where it’s needed is something that we now as an independent nation can do as we wouldn’t as part of the EU.
“We saw how they had to struggle to find some compromise agreement for their European finances.”
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