Hard Brexit may cost £66 bn per year

Brexit could cost the government up to £66 billion a year in lost tax revenue, a draft cabinet committee paper seen by The Times. The document contains a warning that leaving the single market and switching to World Trade Organisation rules would cause GDP to fall anywhere between 5.4% and 9.5% within 15 years and it is based on a controversial treasury report published in April, which critics had dismissed as scaremongering by the treasury, the newspaper said.

And according to the report: "The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38 billion and £66 billion per year after 15 years, driven by the smaller size of the economy."

Senior figures from the leave campaign have reportedly claimed the paper is 'withdrawn from reality' and 'not very realistic'. On the other hand, politicians who prefer a "soft Brexit" said the papers reveal the "horrific damage" of leaving the trading bloc without negotiating a deal with the EU first.

Britain voted by 52% to 48% to quit the EU and Prime Minister has said Article 50 will be unleashed before the end of March, setting the clock ticking on a two-year countdown to exit.

A Government spokesman said: "We want the best outcome for Britain. That means pursuing a bespoke arrangement which gives British companies the maximum freedom to trade with and operate in the single market, and enables us to decide for ourselves how we control immigration."