A group of economists has struck back against what they see as the one-sided tone of the EU referendum debate today, with a new report that outlines the potential benefits of leaving the EU.
"Economists for Brexit", a campaign group launched this morning, said Brexit would lead to lower prices, more jobs and faster economic growth, dismissing the claims put forward by the Treasury and the Organisation for Economic Co-operation and Development (OECD) in recent weeks as it called for Britain to leave the "evil customs union".
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"A lot of economic nonsense has been talked so far in the Brexit debate," stated the report, which was put together by eight economists including Gerard Lyons, chief economic adviser to the Mayor of London, Boris Johnson, and former adviser to Margaret Thatcher, Patrick Minford.
GDP – in or out?
The report states that GDP would rise substantially faster if Britain was outside the EU – claiming output could increase by as much as 3.4 per cent in 2020 alone, compared to current predictions, assuming Britain stays in the EU, of 2.5 per cent.
The group argued that because the EU is a "customs union" it artificially inflates the prices of agricultural and manufacturing goods – hurting UK households.
Food prices, according to Lyons, are around "10 to 20 per cent higher" because of the EU policies: "The EU is a customs union. When you're taught economics at university, apart from high unemployment and high inflation the next evil down the list is a customs union … it discriminates against consumers and protects those areas behind the tariff."
The group also said Brexit would lead to a 1.5 per cent rise in disposable incomes and a 0.2 percentage point drop in unemployment.
The calculations are based on the assumption that the money saved from Britain's contribution to the EU budget is "returned to UK consumers in the form of an income tax cut" and that post-Brexit cuts to red tape would have the same effect as a two per cent reduction in employers' national insurance.
London's status as the premier financial centre would also be protected in the event of Brexit the report claims, as the economists attacked the government for failing to secure "water tight" protections for the City in its recent negotiation and pointed to growing levels of regulation from Brussels.
Lyons said: "It is hard to imagine London not being the main financial centre in Europe, regardless of its membership."
The report comes just one day after the (OECD) said that a vote to leave the European Union could cost every UK family the equivalent of one month's wages in lost economic output.