Sunday 17 April 2016 10:42 pm

Treasury to weigh in on debate over economic cost of Brexit

The Treasury will weigh in on the debate over the economic cost of a Brexit tomorrow, with chancellor George Osborne expected to use its report to trumpet the campaign to stay.

Its analysis regarding the economic impact of Britain's exit from the European Union is set to be followed by a speech from Osborne, according to media reports.

The report will suggest a Brexit would leave each UK household thousands of pounds worse off, and cost the economy billions.

Jonathan Portes, an economist at Niesr, said: "The Treasury assessment of the negative economic impact of Brexit looks to be at the upper end of independent estimates. This suggests they incorporate fairly strong assumptions about damage to UK productivity, although obviously we will have to study the detail of how they were produced."

Writing in The Times, Osborne said: "Let's take the Canadian-style bilateral arrangement some prominent ones have suggested as a central scenario."

"The economic analysis shows that would make us worse off to the tune of £4,300 for every household in Britain by 2030. Our gross domestic product would be over six per cent smaller."

"There would be enormous costs for our public finances, far outweighing the little over one pence in every one pound in taxes raised that we currently contribute net to the EU. There wouldn't be more money to spend on the NHS, defence and the like; there would be far less."

"The conclusion is clear: For Britain's economy and for families, leaving the EU would be the most extraordinary self-inflicted wound."

Responding to the reports, Conservative MP John Redwood, a longstanding supporter of Britain leaving the EU, 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 (ERM)."

"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."