(The Bloomberg View) -- In its general outline, Prime Minister Theresa May's Brexit deal looked misguided. As the costs become clearer, it's starting to look indefensible.
A new study by an academic think tank has tabulated the economic effects of the proposed deal, with dismal results: Over 10 years, May's agreement could reduce the U.K.'s gross domestic product per capita by as much as 5.5 percent, while cutting public revenue by perhaps 1.8 percent of GDP (and that's after accounting for reduced payments to the European Union). Other research has come to similarly alarming conclusions. Even the government's highly optimistic figures, released Wednesday, broadly confirm that the deal is a disaster in the making.
Brexit was always going to hurt. But these projections, awful as they are, still understate the full cost. By one estimate, the process has already reduced the U.K. economy by 2.5 percent relative to where it would've been, and cost the state 26 billion pounds a year in forgone revenue. The government has set aside another 3 billion pounds for preparations, occupying some 7,000 civil servants, while letting myriad other problems fester unattended. That's to say nothing of all the wasted energy, attention and ambition that this enterprise has demanded, or the appalling cost to businesses.
And for what?
The only supposed benefit of May's deal is that it would likely end the free movement of people from EU countries into the U.K., and in this sense could be construed as “taking back control.” That's a stretch in its own right: Brexit campaigners were notably vague on the topic, and by one tally only 33 percent of leave voters said immigration was the main reason for their decision.
Even granting the premise that control of immigration was the point, ending free movement will impose yet more costs. It could lead to labor shortages and higher prices. It might make it harder to lure high-skilled workers by imposing new fees and paperwork. Because EEA migrants on average pay more in taxes than they receive in benefits, it will hardly alleviate fiscal pressure. And it would come at a time when the workforce is aging, productivity is slowing, and businesses are already struggling to find workers. It's no wonder that concerns about immigration have been rapidly subsiding.
May's deal, then, offers the following trade-off. It will make Britons permanently poorer in exchange for an immigration reform — misguided on the merits — that will satisfy only a subset of the narrow majority that voted to leave, many of whom are in any event outraged by the deal's other provisions. On top of that, it will diminish Britain's influence, burden its businesses, impinge on its sovereignty and infuriate half its citizens.
Is this really what people voted for in 2016?
The answer is plainly no. Only 22 percent of respondents in one poll say they support May's deal. Another survey found that 75 percent think “What is now being proposed won't be anything like what was promised two years ago.” May has taken to arguing that the public should support the whole thing just to “get on with it.” She should remember the old problem of sunk costs: The effort expended so far, vast as it may have been, is irrelevant to judging whether the decision to leave still makes sense.
What's entirely relevant, on the other hand, is what has been learned about the toll Brexit will exact in the future. And that's why the government must make the choice explicit in a new referendum. Now that the costs of the only Brexit on offer can be plausibly estimated, and its trifling benefits — if any — can be weighed, the country should be given another chance to decide.
The idea that a second referendum would be democratically illegitimate is exactly wrong. It's the failure to have one, despite vital new information, that would be a travesty of democracy.
Editorials are written by the Bloomberg View editorial board.
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