Government to step up warnings over Brexit

The Government is stepping up its warnings over the dangers of leaving the EU, with a fresh analysis by officials concluding that any of the alternative arrangements for relations with Europe would leave Britain worse off.

The paper - which looks at arrangements adopted by Norway, Switzerland and Canada as well as the option of falling back on World Trade Organisation (WTO) rules - is expected to say each would carry serious risks if they were adopted by the UK.

Foreign Secretary Philip Hammond said the "hard-headed analysis" showed that it was working people who would pay the price - with lost jobs and higher prices - if the country votes for "out" in the referendum on June 23.

But the report was immediately dismissed as another "dodgy dossier" by the pro-Brexit Work and Pensions Secretary Iain Duncan Smith who said it showed the Remain camp was "in denial" about the risks of staying in the EU.

The publication of the report indicates David Cameron is undeterred by accusations he his running an unrelentingly negative campaign - dubbed Project Fear by critics - as he leads the fight to keep Britain in.

It follows hard on the heels of another Government paper earlier this week warning the country would face a "decade or more of uncertainty" if it chose to leave as it painstakingly negotiated new trade deals.

The latest paper examines the arrangements which other countries outside the EU have adopted - and finds none offers the advantages of continued membership.

Pointing to the example of Norway, it is expected to say that Oslo still has to make a significant contribution to EU spending and accept three-quarters of EU laws with no votes or vetoes.

It also has to accept the free movement of people, with EU migrants accounting for a higher proportion of the population - 6% - than they do in the UK where it is 4%.

Looking to Switzerland and Canada, the paper is expected to argue that they have only limited access to the European single market, despite trade deals which have taken years to negotiate.

If similar arrangements were adopted by Britain, it will say, the UK financial services sector would face increased costs as they would no longer have "passports" allowing them to sell to the EU market.

Like Norway, Switzerland has to accept the free movement of people with almost four times as many EU nationals living in the country as a percentage of the population as there are in the UK.

The most drastic option, if the UK failed to reach a deal with the EU, would be to fall back on WTO rules, the paper will say, which would mean new tariffs on UK exports hitting companies with supply chains in Europe.

Mr Hammond said: "Hard-headed analysis shows that every alternative to remaining in a reformed EU would leave Britain weaker, less safe and worse off. Working people would pay the price with few jobs and rising prices."

But in a further deepening of Conservative divisions, Mr Duncan Smith said the "real uncertainty" lay with the EU "project".

"As each day passes we see yet another example - from the utter failure to cope with the migrant crisis, to the increasing disaster of the euro," he said.

"This dodgy dossier won't fool anyone, and is proof that Remain are in denial about the risks of remaining in a crisis ridden EU.

"The truth is we won't copy any other country's deal. We will have a settlement on our own terms - and one that will return control of our borders, and money to Britain. That's the safer choice."