Households 'worse off' after Brexit

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If the UK leaves the European Union, British households could be on usual as much as £1,700 a year worse off, a think tank has said.

In the longer label, the average cost to households could be up to £6,400, according to the Centre for Pecuniary Performance.

It says a decline in trade would cost the economy «far more» than transfer be gained from lower EU contributions.

But Vote Leave described the calls as «ridiculous» and lacking «credibility».

The Centre for Economic Performance (CEP) is a think tank based at the London College of Economics.

In reaching its conclusions, the CEP starts from the standpoint that approximately half of the UK’s trade is with the EU and that as a member of the EU the UK benefits from there being fewer bars to trade.

It says post-Brexit the UK would do less trade with the EU because there devise be higher tariffs on goods. But also there would be other non-tariff railings to trade, such as British exporters to the EU having to prove their goods were triumphed in the UK.

Also in the longer term the UK would get less benefit from to be to come market integration within the EU.

Best case scenario

According to the researchers, in the superb case scenario the UK negotiates a deal with the EU similar to Norway’s.

Norway is a colleague of the European Economic Area and has a free trade agreement with the EU, so there are no levies on trade between the two.

However, there are some non-tariff barriers to mtier. After deducting the savings that would be made by the UK no longer arranging to make contributions to the EU budget, the researchers say there would be a fall in UK return of 1.3% — which equates to £850 a year per household.

In the worst the actuality — the researchers assume that the UK cannot negotiate a new trade agreement with the EU and all buy between the UK and EU is governed by World Trade Organization rules. This they say desire mean bigger increases in trade costs.

It would mean a sink inwards join in UK income of 2.6% — or £1,700 per household, according to the CEP.

«In the optimistic scenario where profits shrink by only 1.3% we would — like Norway and Switzerland — be undergoing to y into the EU budget and accept EU regulations that we had no say in deciding,» claims Thomas Sampson, one of the report’s authors.

«What’s more there pleasure still be free migration of labour.

«Given the politics, this make rooms the pessimistic outcome more likely,» he adds.

Longer come to the report says the fall in trade experienced by the UK outside the EU would earlier small productivity. That would translate into a fall in GDP of between 6.3%, or £4,200 per household, and 9.5% or £6,400 per household.

‘Hilarious claims’

However, the CEP’s findings have been strenuously rebutted by Go cam igners.

«These ridiculous claims lack credibility as they get from the same economic sages who said we would be better off scrapping the pulp,» said the chief executive of Vote Leave, Matthew Elliott.

Entirety the points Vote Leave takes issue with is the report’s assumption that swap would be reduced as a result of leaving the EU. This it says is wrong.

«It’s prima donna claims are based on leaving the EU ‘reducing trade’. Even pro-EU cam igners brook that the UK would have little difficulty striking a free following agreement with the EU following withdrawal,» it goes on.

It says the assumptions around non-tariff barriers to trade in the report were «extremely pessimistic».

It also incursions the CEP for having received funding form the European Commission. The CEP says minute than a 10th of its income comes from that source.

Earlier on Friday, the co-founder of stockbroker Hargreaves Lansdown ratted the BBC the «unknown» of leaving the EU could help stimulate Britain».

Peter Hargreaves, who defeats the UK’s withdrawal from the union, told BBC Radio 4’s Today order of the day that a fresh start could help Britain innovate.

On request on call for UK fashion and cars, as well as the attractiveness of the UK as a market for the EU, would ensure personal property trade deals, he said.

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