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http://www.bbc.com/news/uk-politics-eu-referendum-36070761
George Osborne: UK would be 'permanently poorer' outside EU

The UK would be "permanently poorer" outside the European Union, Chancellor George Osborne has warned ahead of the in-out vote on membership on 23 June.

A Treasury analysis on the cost of an EU exit will say the UK economy could be 6% smaller - the equivalent of £4,300 a year per household - by 2030.

Mr Osborne said the report, being published on Monday, "steps away from the rhetoric" and sets out the facts.

Leave campaigners said the claims were "completely absurd".
◾Follow the latest developments with the BBC's EU Referendum Live
◾The UK's EU vote: All you need to know
◾EU referendum: In depth

Conservative MP John Redwood, who is campaigning for an Out vote, said the Treasury's forecasts for 2030 were "completely worthless" given its past record.


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"This is a Treasury which failed to forecast the huge damage membership of the European Exchange Rate Mechanism inflicted on us and they were always very keen to join us and it gave us a huge recession. They failed to forecast the damage to the UK of the Eurozone crisis of 2011," the MP added.

'Economic shock'

But Mr Osborne defended the report's findings on BBC Radio 4's Today programme, saying: "The conclusions could not be clearer. Britain would be permanently poorer if we left the EU to the tune of £4,300 for every household in the country. That's a fact everyone should think about "

The chancellor said "it would be the poorest" who would be most affected by an EU exit, citing people whose jobs "depend" on the car plants and steel making factories.

"They are the people whose incomes would go down, whose house prices would fall, whose job prospects would weaken, they are the people who always suffer when the country takes an economic wrong turn," he said.

He added: "If you look at the evidence and what the rest of the world is telling Britain and they are very, very clear: we would be permanently poorer outside the EU, let alone the short-term economic shock."


Boris JohnsonImage copyright Reuters
Image caption
The London mayor says the UK could have "a glorious future" outside the EU

The 200-page report, written by government economists, looks at three scenarios in the event of a vote to leave the EU on 23 June, according to BBC business editor Kamal Ahmed.
◾First, the UK gains a "Norway-style" deal and joins the European Economic Area (EEA)
◾Second, the UK executes a bilateral deal with the EU similar to the one being agreed with Canada - a trade deal that has taken seven years to negotiate
◾Third, the UK has a trade relationship with the EU under World Trade Organization (WTO) rules, similar to the relationship between the EU and countries like Russia and Brazil

Each scenario had a strong negative impact on the economy, according to the report, sources have said - but the forecasted 6% shock to national income is based on the Canadian trade model with the EU.

Leave campaigners, including London mayor Boris Johnson, have said there would be no downsides to leaving, and suggested the UK could ape Canada's trade arrangement with the EU.

'Usual suspects'

But Mr Osborne said it was "economically illiterate" to say the UK could retain "all the benefits" of EU membership and "none of the obligations or costs".

Any trade arrangement would lead to less access to the EU single market unless Britain was prepared to pay into the EU budget and accept the free movement of people, he said.

In his Daily Telegraph column, Mr Johnson said the referendum was on a "knife edge" and accused the "usual suspects" of trying to convince Britons to accept "the accelerating loss of democratic self-government as the price of economic prosperity".

"We have heard from the IMF (who got the Asian crisis completely wrong), as well as the banks and the CBI, all of whom were wrong about the euro.

"Davos man - the kind of people whose club class air tickets are paid by the taxpayer, all the lobbyists and corporate affairs directors of the big companies: they are all increasingly nervous that they have been rumbled, that people can see the emperor has no clothes and that Britain could have a glorious future outside the EU," he said.