Every Brexit option will make Britain poorer, the government admitted today as it released a new economic analysis while Theresa May scrambles to sell her deal.

The PM's favoured plan will leave the economy 2.5 per cent smaller after 15 years than if the country had stayed in the EU.

But crashing out without any agreement would be much worse - potentially meaning giving up 9.3 per cent of GPD over the period.

There is a wide regional variation in how different deals hurt different parts of the country.

London does best out of a no deal scenario, losing out on around 6 per cent of future growth - but worst from the Chequers deal, which excludes the service sector that dominates the capital's economy.

The north east suffers most in a no deal, losing out on more than 10 per cent of economic growth.

The best outcome for Wales and Scotland is a Chequers-based solution, which sees only a fractional loss in future growth.

The absolute worst case scenario is a 10.7 per cent hit to the economy after no deal - equivalent to £200billion or £3,000 per person by 2035, according to Bloomberg analysis.

The Canada-style relationship endorsed by many Brexiteers would result in a 6.7 per cent hit, while even a Norway model keeping similar free movement rules would entail a 1.4 per cent loss.

There is a wide regional variation in how different deals impact parts of the country. London does best out of a no deal scenario (third from the top), losing out on around 6 per cent of future growth - but worst from the Chequers deal (bottom). Staying in the EEA for a Norway-style deal (second from the top) leads to lower growth everywhere but less than other scenarios. The Brexiteers favoured option of a Canada-style deal (top) is roughly half the cut to growth of no deal in most areas

How would the economy fare under the Brexit options? The Government analysis predicts a negative hit to the economy in all Brexit scenarios The government analysis looked at how GDP would change over 15 years, compared to if we stayed in the EU. It assumed net zero immigration from the bloc - apart from in the case of a Norway-style model, where the UK would have to keep similar rules to free movement. Advertisement

According to the analysis, if Mrs May secures her Chequers plan from July in full - including a bespoke trade deal and no free movement - the economy could be 2.5 per cent smaller.

The figures represent billions of pounds in lost economic growth over the 15 years after Brexit, even though the economy will be bigger overall whatever happens.

A smaller economy would also mean billions in extra borrowing - almost £120billion more in the worst case scenario.

A raft of new trade deals - including with the United States, Australia and other countries in the Middle East and South America - gains back just 0.2 per cent of economic growth in all cases.

The Government report insisted the figures were not a forecast and Brexit was not the only thing that would change the economy in the coming years.

Today's report does not directly address how the actual deal negotiated by Mrs May will change the economy - partly because the future framework she negotiated offers only a range of outcomes and not a particular deal.

It compares a no deal Brexit, a Canada-style trade deal and a Norway-style association with Europe against the Chequers plan.

The figures published today reignited the bitter row about 'Project Fear' from the EU referendum campaign.

Since the vote, Leave campaigners have seized on Treasury forecasts produced during the referendum that proved to be wrong.

HOW WILL EACH BREXIT OPTION AFFECT YOUR JOB?

Brexit holds different risks for each of the main sectors of the economy and people who work in them.

Overall, a no deal Brexit suggests about 8 per cent less growth in the main sectors - but manufacturing of things like drugs and cars would be hardest hut.

The Government data suggests a Chequers-style deal is best overall, closely followed in most cases by a Norway-style membership of the EEA.

The impact of a Canada-style deal varies widely across the economy. It would still be very bad for some manufacturing - particularly chemicals and drugs - and almost as bad as no deal in the lucrative financial services sector.

Brexit holds different risks for each of the main sectors of the economy and people who work in them with widely different outcomes depending on the deal

Manufacturing - including pharmaceuticals, cars and machinery

Manufactured goods make up 9 per cent of the UK economy, directly employs 2.4million people and in 2016 almost half of exports went into the EU.

A no deal Brexit would disastrous for several sectors - particularly chemicals, pharmaceuticals and motoring which face plunging values of around 23 per cent.

Other manufacturing faces an 11 per cent blow. The hammer blow is because throwing up barriers to Europe would ruin just-in-time delivery schedules.

By contrast a Chequers-style deal that kept open the Channel routes would see manufacturing mostly continue unscathed.

Agriculture and food

Agriculture and food contributes 2 per cent of the UK economy and is responsible for 900,000 jobs. It traded £17billion into the EU in 2016 - almost three quarters of its exports.

A no deal Brexit would see an 11 per cent hit to the sector and even a Chequers style deal would see it damaged by about 2 per cent, according to today's report.

The analysis includes fisheries but does not take account of the political deal to address it separately to the main trading relationship.

Services, including business, construction and public spending

Services is the mainstay of the British economy, contributing £1.1trillion in 2016, accounting for 28 million jobs - 80 per cent of the entire jobs market.

Britain traded £265billion in services with the EU in 2016, just over half of all exported services that year. Currently, the UK is home to four of the world's top ten law firms and six of the world's top ten accountants.

Business services face a roughly 6 per cent cent hit in a no deal Brexit while services in areas such as public administration, defence and education are hit by almost 10 per cent.

A Chequers-style deal reduces the damage to around 1 per cent across the sector - but is still equivalent to drag worth hundreds of millions of pounds because of its overall size.

Financial services

The financial services sector makes up another 7 per cent of the economy, worth £131billion - and employs 1.1million people. It also provides 18 per cent of corporation tax as it highly profitable.

A no deal Brexit means a 9 per cent hit to the lucrative sector - and a Canada-style trade deal favoured by Leave supporters still means an 8 per cent hit.

'They ALWAYS get it wrong': Brexiteers lash out at 'Project Fear 2.0' after government unveils study claiming 'no deal' would cost each Briton £3,000

Furious Brexiteers accused the government of 'Project Fear 2.0' today over claims 'no deal' could cost every Briton £3,000.

Theresa May stepped up the fight to sell her package by unveiling official analysis showing it will limit the economic fallout from leaving the EU.

UK plc will be 2.5 per cent smaller after 15 years than if the country had stayed in the bloc, according to the estimate.

However, it found crashing out without any agreement would be much worse -with the worst case a 10.7 per cent hit to GDP, equivalent to £200billion or £3,000.

The claims immediately reignited the bitter row about the Treasury's 'Project Fear' forecasts from the EU referendum campaign.

Former Brexit Secretary David Davis branded the new document a 'propaganda onslaught' in favour of the Government deal.

And Boris Johnson raged: 'The British economic establishment always gets it wrong. Wrong about joining the ERM, wrong about leaving it, wrong about joining the Euro, wrong about Project Fear after the referendum.

'They can't forecast six months out - why should we believe them over 15 years?'

Theresa May (pictured today in Glasgow) insisted at PMQs the report showed her deal would mean Britain was 'better off' after Brexit, insisting the package negotiated with the EU was the 'best available for jobs and the economy'

The Prime Minister claimed victory in the negotiations by securing a political declaration open to a 'spectrum' of trade deal outcomes depending on how much Britain wants to change rules and regulations after Brexit.

Based on the figures Mrs May told MPs at PMQs: 'Our deal is the best deal available for jobs and our economy, that allows us to honour the referendum and realise the opportunities of Brexit.

'This analysis does not show that we will be poorer in the future than we are today, no it doesn't, it shows we will be better off with this deal.'

Graphs in today's report lay bare the Government findings on Brexit. Below the 0% line above are the hits to the economy caused by added costs and barriers to trade with the EU - ranging from -2.5% to -9.3% - while above the line are the gains from new trade deals and freedom to set UK regulations - worth about 0.2% extra to the economy

This graph shows the impact of different Brexit deals. On the left are four examples of what happens in no deal, a Canada-deal, a Norway deal and the Chequers deal if migration from Europe continues at today's levels, and on the right are no deal, Canada-style and Chequers with a clamp down on migration. All are negative.

Instead, she claimed, Labour leader Jeremy Corbyn and shadow chancellor John McDonnell were the 'biggest risk to our economy'.

The Bank of England will also publish its own assessment of the potential outcomes.

The findings allow Mrs May to say that her option is the least damaging available, while delivering the 'political benefits' of leaving the bloc.

In his article, Mr Hammond wrote: 'Let me be clear, leaving the EU next year without a deal would be very bad for our economy, but perhaps more than that, it would further entrench the divides which have held us back over the last few years.

'Because while it is true that some would like to see us leave on these terms, most people can see the damaging economic impact this would have on our country.

'Equally, those calling for another referendum would achieve only more division and disunity.

'And those who dream of 'negotiating a better deal' are missing the point: this is the best deal that is negotiable.'

There is a wide regional variation in how different deals hurt different parts of the country. The graph shows how no deal, a Canada-style deal, a Norway deal and the Chequers plan hits each major region and nation of the UK

In a round of interviews ahead of the publication this morning, Mr Hammond said under the package the economy would be 'very very slightly smaller' in 15 years' time.

'If you look at this purely from an economic point of view there will be a cost from leaving the EU, because there will be impediments to our trade,' he told BBC Radio 4's Today programme.

'What the PM's deal does is minimise those costs... while delivering the political benefits.'

Ministers only agreed to comparisons of Mrs May's deal with staying in the EU in the face of a damaging Commons defeat if they refused.

Having spent yesterday campaigning in Wales and Northern Ireland, Mrs May will use her visit to Scotland to argue that agreement offers the prospect of an 'unprecedented economic partnership' with the EU after Brexit.

At the same time, she will emphasise that it will mean Britain leaves the Commons Fisheries Policy, enabling the country to decide who it allows to fish in UK waters.

'At long last, we will be 'an independent coastal state' again - taking back full sovereign control over our waters, and free to decide for ourselves who we allow to fish in our waters,' she is expected to say.

'The EU maintained throughout the negotiation process that it wanted to link overall access to markets to access to fisheries. It failed in the Withdrawal Agreement and it failed again in the Political Declaration.

Former Brexit Secretary Mr Davis has said economic warnings from the Government were part of a 'propaganda onslaught' ahead of MPs voting on a Brexit deal

'I have been robust in defending the interests of Scottish fisherman so far - and I will always be so.'

Ahead of her visit, Mrs May clashed with First Minister Nicola Sturgeon who released a report claiming her deal would cost people in Scotland £1,610 a year by 2030 people compared to if the UK had remained in the EU.

Ms Sturgeon said the 'backstop' being put in place to prevent the return to a hard border in Ireland could leave Scotland at a 'serious competitive disadvantage' to Northern Ireland.

'In short, it will make us poorer,' Ms Sturgeon said.

Analysis predicting the UK economy would be worse off under every Brexit scenario is 'more evidence about why we need another vote' on EU membership, according to campaigners Best For Britain.

Labour MP David Lammy, a supporter of the group which backs a second referendum, said: 'These figures show that the government's stated policy is to make our economy smaller and weaker.

'The Government are showing starkly that their decisions will make everyone poorer.

'As the Prime Minister battles to save her deal, these figures are more evidence about why we need another vote.

'I cannot believe leave or remain voters both voted to make themselves and their families worse off.'

Brexiteers reacted with fury to the report produced by the Government today.

Former Brexit Secretary Mr Davis has said economic warnings from the Government were part of a 'propaganda onslaught' ahead of MPs voting on a Brexit deal.

Parliamentary colleagues needed to be 'ready for project fear 2.0', he warned.

What happens now the Brexit deal has been signed off in Brussels? Theresa May passed a milestone in the Brexit process by agreeing a package with the EU. But there is still a long way to go. This is what the next steps are: December 11: The meaningful vote itself. This is the absolutely crucial moment and could make or break the Prime Minister and her deal. MPs will vote after a debate that could last as long as five days. If the vote carries, Mrs May survives and Brexit is on track as she plans. If she loses, she could resign. December 13-14: The next EU summit. If the deal has been rejected by MPs, Mrs May could use this to try and secure new concessions. January 2019: The European Parliament is due to vote on the deal - but will only do so if it has been agreed in the House of Commons. March 29, 2019: Exit day. This is written in law so unless there is a dramatic shift Britain will leave the EU, deal or no deal. Advertisement

Mr Davis added: 'Treasury forecasts in the past have almost never been right and have more often been dramatically wrong.'

He claimed predictions the UK economy would contract by 2.1% in the 18 months after a Brexit leave vote were unfounded, with it actually growing by 2.8%.

Senior ERG member Steve Baker said: 'The reputation of government economics is in the gutter. That must change.

'It's time for the Chancellor to publish all his assumptions and full model documentation so we can begin the process of recovery.'

Former Cabinet minister Priti Patel said: 'We've all had about enough of Project Fear.

'We were told during the referendum campaign that we'd each lose £4,300 and that there would be a recession and higher unemployment. And yet we've seen record wage growth and record employment levels.

'If ministers spent time preparing for a no deal scenario, rather than dreaming up silly scare stories, we could all make a success of our post-Brexit future.

'It's time our Government started betting on and believing in Britain. Let's be optimistic – we have a great future ahead of us.'

MP Simon Clarke said voters had already 'comprehensively rejected' Project Fear at the referendum.

He said: 'The ingenuity, brilliance and creativity of the British people hasn't let us down before. Even the Chancellor said at the weekend that the fundamentals of the UK economy are strong.

'Why can't the Treasury follow his lead and start backing Britain?'

Denying May's deal will fuel 'division', Philip Hammond warns in article for MailOnline It is no secret that the issue of our leaving the EU is one which has polarised opinion. It has divided the country between leavers and remainers; families, and, yes, political parties have all seen relationships strained by strongly held convictions on both sides. But now we have reached agreement with the EU, it is the time to heal those divides. A divided country is a poorer country, so let us end all talk of who 'won' or 'lost' in the referendum and work together in a spirit of compromise to secure Britain's future outside the European Union. The agreement reached between us and the 27 other EU countries at the weekend is a major milestone in securing a good Brexit deal for our country – a deal to which we should all give our full support. It brings the country back together with a way forward that takes us out of the European Union and delivers on the result of the referendum, while protecting jobs, security and the integrity of the United Kingdom. But it also reassures those who were worried about leaving the European Union that we will have a close future trading, security and economic partnership with our nearest neighbours in Europe, protecting our prosperity and securing our country. Labour's approach would reignite debates that the country has moved beyond. Jeremy Corbyn admits he hasn't even read the Brexit deal and yet says he is opposed to it. He promised to respect the country's decision to leave, but is now opening the door to re-running the referendum. He says his party will put jobs and the economy first, but he has no alternative plan for a deal that honours the referendum. His approach would simply cause more division and uncertainty while the government's approach brings certainty with a deal that protects jobs and is good for the economy. Let me also be clear, leaving the EU next year without a deal would be very bad for our economy, but perhaps more than that, it would further entrench the divides which have held us back over the last few years. Because while it is true that some would like to see us leave on these terms, most people can see the damaging economic impact this would have on our country. Equally, those calling for another referendum would achieve only more division and disunity. And those who dream of 'negotiating a better deal' are missing the point: this is the best deal that is negotiable. Crucially, the deal which we have agreed with the European Union is one which delivers on the results of the referendum. The majority of this country voted to leave the EU, and we must deliver on that vote in the most sensible way possible. And that is what we are doing: we are regaining our sovereignty, but we are not cutting ourselves off from our neighbours. We are taking back control, but we are not doing so to the detriment of everything else. As Chancellor, I spend much of my time speaking to businesses big and small. As in the country, opinion amongst them on leaving the EU was divided. But overwhelmingly now, they tell me that the main thing holding this country back is uncertainty. They see the pragmatic approach the Prime Minister and her negotiators have taken and they want us to get on with things so they can get on with investing in Britain's future. And that is exactly what we will do. Now is the time to offer the hand of friendship across the country's divide; to reunite those who have been driven apart by Brexit; and to come together and work in the national interest. This is the best deal possible – it will deliver Brexit while helping to heal the country, get businesses investing again, and set us on the path to a united, brighter future. Advertisement