Brexit will leave Britain permanently poorer, George Osborne warns


The UK will be permanently poorer if it votes to leave the European Union, with households £4,300 a year worse off, George Osborne has warned.

Osborne: Britain would be permanently poorer outside the EU

The Chancellor, who was publishing a Treasury analysis on the cost of Brexit, claimed some of those in favour of severing ties with Brussels viewed the economic damage as a "price worth paying".

Britain's economy would shrink by 6% by 2030 if the country replicated Canada's trading agreement with the EU, as advocated by Boris Johnson, according to the Chancellor.

Mr Osborne warned that the poorest would suffer most from the economic shock of Brexit.

"Today's Treasury analysis steps away from the rhetoric and sets out the facts that people have asked for," he told BBC Radio 4's Today programme.

"The conclusions could not be clearer: Britain will be permanently poorer if we left the European Union, to the tune of £4,300 for every household in the country.

"That's a fact everyone should think about as they consider how to vote."

He claimed it was "economically illiterate" to suggest that the UK would be able to negotiate full access to the single market without accepting obligations such as paying into the EU's budget, and accepting free movement of people, if it voted in favour of Brexit on June 23.

"We should not assume that they need us, come what may," he said.

Mr Osborne added: "There are some people in this debate who say 'you know what, it's a price worth paying, I know there will be a hit to the economy but we will pay that price so that Britain can go it alone'.

"At least that's an honest debate. What is not honest and what is economically illiterate is to say that we can have all the economic benefits of being in the EU and at the same time leave. That is having your cake and eating it."

The Chancellor said the Treasury forecast used the Office for National Statistics' figures on immigration, which forecast the numbers coming to the UK exceeding the Government's target of cutting net migration to the tens of thousands.

"It is a cautious assumption because we believe that the deal we have negotiated in the EU, and our policies that we have set out to control migration, will lead to lower immigration," he said.

Mr Osborne said the rich would be less harmed by Brexit, but poorer households would be hardest hit.

"We would not all be in this together if we left the EU. The richest in our country would go on being rich, it would be the poorest - the people whose jobs depend on the car plants, whose jobs depend on the steel-making factories and the like - who would be hit if we left the European Union.

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

Pressed on whether his own chance of becoming prime minister when David Cameron leaves office had been damaged by his support for a Remain vote, Mr Osborne said: "This is not about any one person, this is not about my job, my career. It's not even about any one political party, it's not even about the kind of issues you discuss in a general election.

"This is a massive decision for our generation, as big as anything we have ever been asked to address, for those of us since the war."

The mayor of London insisted that people realised that the UK could prosper outside the EU, despite the warnings from the Remain camp.

In his Daily Telegraph column, Mr Johnson wrote: "All the usual suspects are out there, trying to confuse the British public and to persuade them that they must accept the accelerating loss of democratic self-government as the price of economic prosperity."

But he added that "people can see the emperor has no clothes and that Britain could have a glorious future outside the EU".

"They all know that there is one event in the next few weeks that could remind the British people of at least one salient point in this debate - that this country has lost control of its frontiers - and that is another migration crisis on the borders of the EU, and within the EU itself."

Tory former cabinet minister John Redwood dismissed the headline findings of the Government's analysis and took a swipe at Mr Cameron.

He 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.

"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."