Wednesday 3 February 2016 5:11 am

EU referendum: Institute of Economic Affairs say staying in the EU would cost Britain at least £9,265 per household each year

Remaining in the European Union could cost the United Kingdom at least 13 per cent of gross domestic product (GDP) each year, a leading free market think tank has claimed.

In a new report out today by Cardiff Business School professor Patrick Minford, the Institute of Economic Affairs (IEA) said shifts in EU trade policy, regulations and the single market would lead to annual costs of at least £9,265 per household, in today’s terms.

The IEA said the report suggested a new UK-EU treaty is needed to “preserve the existing relationships that achieve virtuous integration” and the EU should allow the UK to “form its own regulatory structure which will make the UK economy huge savings and will best serve the City and other service sectors’ ability to compete in world financial markets”.

“Currently, the EU has poor and inflexible institutions for dealing with competing economic demands and the changing economic environment, said IEA research director Philip Booth said. “It is a highly interventionist organisation, with a strong bias for ‘top-down’ regulation and a ‘socialist’ mind-set that is economically damaging.”

Pro-EU groups, however, rejected the IEA report, calling it a “work of fiction” and a “new low from the leave campaigns”.

“This report argues that black is white,” said Stronger In spokesman James McGrory. “The EU breaks down trading barriers which brings jobs, business expansion, investment and lower prices.”

“They continually rely on dodgy numbers from their friends because they cannot find independent evidence to back up their assertions,” McGrory added.

Matthew Elliott, the chief executive of the Vote Leave campaign, is a former director of the IEA.