LEAKED Treasury reports suggest hard Brexit is going to cost the UK £66bn a year.

The figures warned that the UK’s GDP could slump by 9.5 per cent if it leaves the EU, comes out of the single market and operates by World Trade Organisation rules.

It follows a report by Fraser of Allander last week suggesting such a move would see Scotland lose 80,000 jobs and push salaries down by £2,000 a year.

Theresa May’s cabinet are at each other’s throats as they try to make Brexit work.

Reports suggest Chancellor Philip Hammond, who wants to stay in the single market, and Brexit Trade minister Liam Fox, who wants out so that the UK can have control over immigration, are so opposed to one another’s positions on Brexit that one of them could soon be forced to quit the frontbench.

The Treasury paper, leaked to the Times yesterday, is likely connected to those tensions.

It comes as the pound spent another day being pummelled on the markets, falling two cents against the dollar at $1.2153. If it falls much lower then it will be reaching levels not seen since the 1970s.

While a nightmare for holidaymakers, the cheap pound has, however, been a boon for the FTSE 100 companies, who have seen profits jump thanks to sterling’s falling value against the dollar. The index hit a record high at noon.

The draft Cabinet committee paper leaked yesterday is based on a controversial study published by George Osborne in April during the referendum campaign

The document says: “The Treasury estimates that UK GDP would be between 5.4 per cent and 9.5 per cent of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5 per cent.”

It adds: “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 £38billion and £66billion per year after 15 years, driven by the smaller size of the economy.”

Tasmina Ahmed-Sheikh, who shadows Fox in the Commons, said: “This leaked report not only shows the deep divisions at the centre of Theresa May’s government, but also clearly demonstrates that cabinet ministers like Liam Fox who advocate a hard Brexit value ideological purity over economic competence or the greater public good.

“Everyone already knows that abandoning the single market would be bad news for business and the wider economy, and so what this Treasury report does is calculate the scale of the damage that would be done.”

Labour’s Shadow Secretary of State for Scotland Dave Anderson said: “All sides must accept the decision taken by the British public on June 23, but it is clear that the public did not vote for economic misery and hardship. The promises made by those intent on leaving the European Union have thus far proven to be false, to say the least. The Tories should be sticking to the commitments made in their 2015 manifesto, one of which was to remain a member of the single market.”

Downing Street tried to underplay the leak: “These figures quoted today aren’t new; they were around some time ago,” the spokesman said. “I’m not going to get into reheating the arguments that were made during the referendum campaign.

“The emphasis is now on getting the best possible deal – to recognise that the country has clearly voted to leave the European Union. It is now incumbent on the government to make sure that that process happens – and that we are mindful there must be no attempt to thwart or stall that process.”

Labour’s Europe spokesman Keir Starmer has called for a vote in the Commons on Brexit, accusing the government of acting beyond their mandate.

Starmer told BBC One’s Andrew Marr Show on Sunday: “The referendum is clear and has to be accepted and we can’t have a re-run of the question that was put to the country earlier this year.

“But, and it’s a big but, there has to be democratic grip of the process and, at the moment, what the Prime Minister is trying to do is to manoeuvre without any scrutiny in Parliament and that’s why the terms on which we’re going to negotiate absolutely have to be put to a vote in the House.”

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