Osborne's Financial Predicitons If UK Leaves EU
The Treasury is due to release its economic analysis of the long-term implications of the UK leaving the European Union.
In a Times opinion article ahead of publication, the Chancellor reveals the report concludes that replacing EU membership with a negotiated Canada-style trade deal would make us worse off to the tune of £4,300 for every household in Britain by 2030. Our GDP would be over 6% smaller.
The Treasury analysed the costs and benefits of EU membership over the next 15 years using three different models of Brexit – membership of the European Economic Area, a negotiated settlement such as is being implemented with the EU by Canada, and no special trade arrangements other than current World Trade Organisation rules – the so-called WTO option.
Treasury sources claimed the report was a sober, and conservative estimate of Brexit trade and economic costs, for example assuming no ongoing fees to access an EU trade deal from the outside.
Writing in The Times, the Chancellor says it is “a complete fantasy to suppose there is some radically different other arrangement that Britain could negotiate, where we have access to the single market but don’t accept any costs or obligations of EU membership. Other European governments have made it very clear that’s not on offer. And when you think about it for a second, how could it be? How could other European countries give us a better deal than they give themselves?”.
But former Cabinet minister John Redwood claimed remain campaigners had been wrong about the EU before.
He said: “The Prime Minister was one of the senior advisers working in the Treasury while John Major’s government tried to keep this country in the EU’s disastrous Exchange Rate Mechanism.
“The ERM destroyed jobs and caused misery for families across the country. The remainers were wrong then, and they are wrong now – people should not trust their judgement on the EU.”
The long-term analysis is one of two HM Treasury reports. There will be another short-term analysis about the immediate “shock”.
The Chancellor told Sky News on Friday of his fears that a vote for Brexit would see pressure on sterling and financial volatility that will lead to higher mortgage costs.
In his Times article, Mr Osborne argues that his is the patriotic case, in keeping with centuries of British internationalism.
The Chancellor says it is now for the Leave campaign to offer answers on the substance not claims of “an international conspiracy” which sees Brexit campaigners “cry wolf about Project Fear”. The Leave case, is he says “weak” and “friendless”.
The full report will be published this morning.