'Brexit damaging to Britain' analysis a 'dodgy dossier' says Iain Duncan Smith

Leaving the European Union could lead to rising prices in UK shops and fewer jobs, the Government warned as it produced fresh analysis by officials concluding that any of the alternative arrangements for relations with Europe would leave Britain worse off.

Prime Minister David Cameron said the analysis will show that the alternatives to EU membership would "damage Britain" - but the document was dismissed as a "dodgy dossier" by pro-Brexit Cabinet minister Iain Duncan Smith.

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 - will say each would carry serious risks if they were adopted by the UK.

Foreign Secretary Philip 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."

The publication of the report indicates the Prime Minister is undeterred by accusations that he is 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 which warned 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, the document will 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 told the BBC Radio 4 Today programme: "It is not credible to suggest that you could have continued access to the single market without having to accept freedom of movement of labour, without having to accept EU regulations, and without having to contribute to the EU budget.

"Now maybe the Leave campaign wants to say they are prepared to accept all of those things, but if you accept all of those things surely we are better off inside the European Union with our seat at the table, helping to shape those rules as well as being bound by them."

Mr Cameron also challenged the Leave camp to set out "what their detailed plan for Britain outside the EU is - and its impact on the economy and prices".

But in a further deepening of Conservative divisions, Work and Pensions Secretary 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."

Junior justice minister Dominic Raab, who supports Brexit, accused the In campaign of using fear tactics.

He told Today: "I think that there is far too much scaremongering, it's like Halloween come early.

"We have a scare story each week about the ghoulish prospects outside the European Union. I don't believe in ghosts, and I'm not afraid of these ghoulish stories, or of life outside the EU."

However, he refused to be drawn on whether he agreed with Mr Duncan Smith that the analysis was a "dodgy dossier".