George Osborne: Treasury analysis shows Brexit leaves UK 'permanently poorer'

Posted On: 
18th April 2016

Leaving the European Union would cost the average household £4,300 per year by 2030, according to the Treasury’s cost-benefit analysis.

George Osborne will launch the Treasury document on Monday
Credit: 
PA Images

The 200-page official document said GDP would be 6% lower by the end of the next decade as a result of lower trade and investment if the UK is outside the EU.

Vote Leave has rejected the claims as “erroneous”.

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The figures are based on the UK securing a Canada-style deal with the EU, a bilateral free trade agreement that pro-Brexit Mayor of London Boris Johnson has spoken about favourably in the past.

They assume that, like Canada, the UK’s service sector will not have free access to the single market.

George Osborne, who will launch the document later today, said a vote to leave on 23 June would be the “most extraordinary self-inflicted wound”.  

In an article for The Times, the Chancellor wrote: “Those advocating exit have miscalculated their negotiating hand. While 44% of British exports go to the EU, less than 8% of their exports come to us.

“The Treasury analysis shows that under all plausible alternatives to British membership of the EU we would have a less open and interconnected economy — not just with Europe but, crucially, with the rest of the world.

“There would be less trade, less investment and less business.

“Leave the EU and the facts are: Britain would be permanently poorer. Britain’s families would be permanently poorer too.”

Mr Osborne also took aim at the Leave campaign’s accusation that the Government is part of ‘Project Fear’ to frighten voters into staying in the EU.

He said the Brexit backers “can’t answer the substance” of the Remain camp’s points so dreamt up an “international conspiracy”.

Addressing the Leave campaign, he said: “Engage in the issues rather than complaining endlessly about process. This is too important a question for Britain for you to pass on the answers. Every time you cry wolf about Project Fear, you only expose how weak and friendless your case is.”

The document will also analyse the ‘Norway option’, which assumes access to the European Economic Area, and ‘WTO option’, which assumes no deal with the EU.

Conservative MP John Redwood, speaking on behalf of Vote Leave, said the Government’s analysis could not be trusted.

“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,” he said.  

“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 judgment on the EU.”

Chris Grayling will become the first Cabinet minister to appear on a Grassroots Out platform when he makes a joint appearance with Ukip leader Nigel Farage and others in Stoke-on-Trent.

The Leader of the Commons will say there is a “tidal wave” of new legislation set to come from Brussels after the referendum, as part of the “relentless march of Europeanisation”.

Mr Grayling, like the other Conservative Cabinet ministers backing Brexit, is part of Vote Leave.

Last week the Electoral Commission announced Vote Leave had been designated the official ‘Out’ campaign, seeing off competition from Grassroots Out.