Andrew Green

Why Brexit wouldn’t leave voters out of pocket

The Treasury says that the cost of the UK leaving the EU would be £4,300 per household – but compared with what? We’re not told. As a cross-bencher, I naturally take very seriously the task of checking and challenging the work of the government so I put down two Parliamentary questions which eventually elicited the response that: ‘HM Treasury did not produce a forecast of how big the economy would be in 15 years’ time….’

Really? A whole report about the impact of Brexit by the year 2030, taking in hundreds of different factors – but no estimate about how big the economy would be by then? Why on earth not? The reason, it seems, is to avoid admitting that we’ll all be far better-off by 2030.

It is extraordinary that the government should not wish the public to know what difference Brexit would actually make to their pockets as it is clearly a key consideration for voters. The issue, of course, is whether households will be better or worse off than they are today and, if so, by how much. So here is a quick calculation which any half-competent Treasury official could complete more quickly than he or she could drink a cup of coffee.

The Office for Budget Responsibility forecasts real GDP in 2030/2031 to be 43pc higher than in 2015/16: an increase of £774 billion in today’s money. Alongside this, official projections from the Office of National Statistics forecast the number of households in the UK to increase by 3.75 million between 2015 and 2030, or 14pc.

Taking both into account, real GDP per household can be seen as forecast to increase by 26% over the next fifteen years, from £66,457 to £82,790. If, in the Treasury’s central scenario, it were 3.8% lower with an EEA arrangement, that would still be an increase of over £14,000 compared to today.

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