Brexit ‘would cost every household £4,300’ in UK
Leaving the EU could mean £36bn (€45.4bn) less to spend on public services, according to a British Treasury analysis launched by George Osborne.
The chancellor warned that British families would pay a “heavy economic price” if the country votes to break from Brussels on June 23, with the UK left permanently poorer.
The 200-page analysis produced by officials in Mr Osborne’s department was mocked by Brexit campaigners and branded “dodgy”, but the chancellor insisted it was a “serious and sober analysis”.
Mr Osborne also faced questions over the assumption used in the document that net migration would fall to 185,000 a year from 2021 onwards — far in excess of the British government’s goal of reducing it to the “tens of thousands” — with ‘Leave’ supporters arguing that the Treasury had failed to take into account the costs of coping with an ever-growing population.
The Treasury analysis examined three potential options for the UK if it left the EU — the status currently enjoyed by Norway, which makes payments to the EU and accepts free movement in return for access to the single market, a bilateral free trade deal of the kind obtained by Canada, or a relationship under the rules of the World Trade Organization (WTO).
The chancellor focused his assessment on the Canada-style model, which has been championed by London mayor Boris Johnson.
Under the terms of a Canadian-style bilateral trade deal with Brussels, the economy would be 6.2% smaller by 2030, the equivalent of £4,300 per household, the analysis suggested.
Mr Osborne said:
“We’d lose tens of billions of pounds in money for our public services, because our economy would be smaller and our families poorer. The most likely bill our public services would pay for leaving the EU is £36 bn. That’s the equivalent of 8p on the basic rate of income tax.”
The Treasury document suggests that the Norway-style approach would see GDP fall by a central estimate of 3.8% in 2015 terms, the equivalent of £2,600 per household.
If there was no deal with the EU, and the UK fell back on WTO rules, the economy would suffer by between 5.4% and 9.5%, with a central estimate of a 7.5% fall — hitting each household by £5,200.
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