EU Reset growth claims ‘based on flawed assumptions and bogus calculations’

• Government calculation of EU ‘reset’ benefits fails to take costly factors into account
• Growth Commission estimates a net long-run loss of £73 billion to the UK economy
• ‘Digital partnership’ and imposition of AI Act on Northern Ireland would be a further drag on growth

The Growth Commission has today responded with alarm to reports of the draft EU-UK deal circulating ahead of the summit taking place on 20th November.

Growth Commission Chairman Shanker Singham said:

“The Prime Minister is relying on a 0.4% GDP growth projection to justify this EU ‘reset’; but, crucially, for Sanitary and Phytosanitary (SPS) rules, the calculation fails to take into account a number of vital and costly factors.

“It does not include the lost opportunities for the UK, which will not now be able to improve its SPS regime in pro-competitive ways; it does not include the increased burden for non-EU imports which will face the EU’s hazard-based import control regime; and it does not include the impact on non-EU trading partners who have repeatedly said they will be less open to the UK market if the UK adopts EU rules in this area.

“The projection does include improvements to EU to Great Britain trade flows, but this benefit could instead have been secured by unilateral acceptance of EU regulations and standards, as has been done for medicines.

“Taking all of this into account, while we estimate benefits from the reset worth 0.98% in GDP per capita, that figure is dwarfed by losses of 3.07% in GDP per capita – amounting to a net loss of 2.12% in GDP per capita, equivalent to a hit of £73 billion to the UK economy over the long run.

“Quite simply this EU reset is being sold to the British people on the back of flawed assumptions and bogus calculations.”

Responding to the proposed ‘digital partnership’ and imposition of the EU’s AI Act on Northern Ireland, Growth Commissioner Douglas McWilliams added:

“By far the UK’s most successful sector at the moment is its digital sector which accounts for half of the UK’s current GDP growth according to the latest figures. It is vital that the UK remains exempt from the very EU laws whose absence has protected the UK digital sector – the EU’s own Digital Markets Act is estimated to have cost EU businesses €114 billion in lost revenues.

“Meanwhile, the EU itself estimates that its AI Act adds 17% to the overhead costs of AI spending. Making Northern Ireland subject to this Act will do unnecessary damage to the province’s troubled economy.”