Customs Union Brexit 'would cost Oxfordshire £4 billion'

That is according to a study by the National Institute of Economic and Social Research (NIESR), which says that the county would lose around 3.2 per cent of its economic output in a decade, compared with staying in the EU.

The new report says the local economies of Berkshire, Buckinghamshire and Oxfordshire combined would be among the worst hit of any English counties.

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On average, each person in the region would be £1,665 worse off per year, the report claims, based on current population levels.

It predicts that the UK’s national economy would shrink by 3.1 per cent under a deal including a Customs Union - which is currently being discussed by the Conservative government and Labour.

Labour’s preferred option is to leave with a deal and remain in the Customs Union, meaning that the UK and the EU would agree not to impose any charges or tariffs on each other’s goods.

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Oxfordshire’s Conservative county council leader Ian Hudspeth said: “I campaigned to remain in Europe, although I was a reluctant remainer, as I did not believe the way the EEC were moving towards a political union was the correct way forward.

“Since the electorate gave a mandate as to their wishes to leave I now firmly believe this is the best way forward and that the UK will flourish as an independent state.

“There have been numerous studies by both remain and leave over the years that have not actually been realised. I have faith in the businesses of the United Kingdom to thrive nationally and internationally.”

He continued: “What all politicians must do is to work together to deliver the will of the electorate: any politician campaigning to remain cannot believe in democracy.”

Oxfordshire is one of the most pro-remain counties in the country, with three out of its six MPs now back a second referendum.

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The NIESR report, commissioned by the pro-remain ‘People’s Vote’ campaign, is thought to be the first independent study on a Customs Union Brexit.

It assesses the impact of changes to trade, investment and immigration, suggesting that the amount of money available for public services nationally would fall by £13 billion a year.

The study warns that the shortfall would need to be met by an increase in the basic rate of income tax, higher public borrowing, or further public service cuts.

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Garry Young, director of macromodelling and forecasting for NIESR, said: “Leaving the EU for a customs union will make it more costly for the UK to trade with a large market on our doorstep, particularly in services which make up 80 per cent of our economy.

“This inevitably will have economic costs, with widespread implications... and that there will be fewer resources available to pay for public services.”