Britain would “permanently poorer” and the economy 6% smaller if the UK votes to leave the EU, according to analysis by the Treasury.
The report on the long-term economic impact of EU membership found that Britain would be between £2,600 and £5,200 worse off per family if the UK votes to leave, depending on the agreements reached with other EU nations.
The analysis shows that the best deal for a post-Brexit UK would be a Norway-like membership of the European Economic Area (EEA), which would leave Britain £2,600 worse off per family. Meanwhile, analysts predict that a bilateral agreement with the EU, similar to that of Switzerland, Turkey, and Canada would leave Britain £4,300 worse off per family, and agreements through the World Trade Organisation (WTO), such as the EU’s deals with Russia and Brazil, would leave Britain £5,200 worse off per family.
The reports also finds that the negative impact on the economy (GDP) would result in a total reduction in tax receipts of £36 billion, equivalent to around an 8p increase in the basic rate of income tax or about a third of the NHS’ annual budget. The situation would be less bad (£20bn reduction) in a Norway-like deal, or worse (£45bn) in a WTO agreement.