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Osborne to lay out economic cost of UK voting to leave EU
[LONDON] Chancellor of the Exchequer George Osborne will use the publication of a Treasury analysis of the potential consequences of Britain voting to leave the European Union to ramp up his campaign to stay in the bloc, arguing an exit would shrink the economy and make British households poorer.
Mr Osborne also plans to warn of the dangers to Britain's economy of a vote to leave the EU in a speech in southwest England on Monday morning. The event is scheduled to coincide with the publication of the Treasury's report on the cost of a so-called Brexit. The UK is scheduled to vote on whether to remain in the union on June 23.
The report will show that an exit would cause permanent rather than temporary damage to the economy due to lower trade and investment, which would cut government income at "enormous costs" to public spending, such as on the national health service and defense, Mr Osborne wrote in an article in the Times newspaper published ahead of his speech.
A Canadian-style post-Brexit agreement, as advocated by some campaigners to leave the bloc, would shrink gross domestic product by more than 6 per cent, making each household £4,300 (S$8,267) a year poorer by 2030, he wrote.
"Leave the EU, and the facts are: Britain would be permanently poorer," Mr Osborne wrote.
"Britain's families would be permanently poorer too."
Monday's report is the latest in a series of economic warnings issued by Prime Minister David Cameron's government as it seeks to convince voters to remain in the 28-nation bloc.
It will counter claims by campaigners for Brexit, including Justice Secretary Michael Gove and Mayor of London Boris Johnson, that leaving the EU would free up billions of pounds for the National Health Service and other public programs.
The chancellor's speech comes a day after his return from the International Monetary Fund's spring meeting in Washington, at which concerns about the UK's potential exit dominated discussions.
Both the IMF and the World Bank said an exit would damage global growth. Mr Osborne told reporters on Friday that concerns had been raised by China and Japan, as well as European states.
French Economy Minister Emmanuel Macron on Sunday sought to debunk one of the central arguments of the "leave" campaign, that a vote to leave the EU would allow Britain to forge closer alliances with other trading partners, such as China.
"Today, you are strong because you are part of the EU," he told the BBC. "When you discuss your steel industry with China you are credible because you are part of the EU, not because you are just the UK. You will be completely killed otherwise."
Government warnings about the immediate domestic implications of an exit have also been plentiful. Mr Osborne said Friday that an exit was likely to cause mortgage rates to rise, as well as damage economic growth and cause job losses.
Speculation of political instability has also been raised, with former Tory Chancellor of the Exchequer Ken Clarke saying a vote to leave would make Cameron's position as prime minister untenable.
Mr Osborne's appearance before lawmakers on the Treasury Select Committee has been postponed by nine days to April 28 to allow the panel to fully consider the Treasury's report.