It will cost the average British household the equivalent of a month’s salary of around 2,800 euros by 2020 if they vote leave to leave the European Union in a June referendum.
That’s the warning from the the west’s leading economics thinktank, the Organisation for Economic Cooperation and Development. (OECD).
It was made by its chief Angel Gurria during a lecture at the London School of Economics.
“Brexit would, rather like a tax, hit the wellbeing and the pockets of UK citizens. Unlike most taxes, however, this one will not finance the provision of public services or close the fiscal gap. The ‘Brexit tax’ would be a pure deadweight loss,” said Gurria.
Echoing the assessment made by the Treasury earlier this month, the chief of the 34-nation OECD said the costs of exit would increase over time. “By 2030, in a central scenario GDP would be over five percent lower than otherwise,” it said, “with the cost of Brexit equivalent to £2,200 per household (in today’s prices).” The Treasury predicted that the economy would be six percent smaller by 2030.
Gurria also said those campaigning to leave the EU were “delusional” over Britain’s trading prospects which he said would suffer from less access to the bloc’s single market.
“Our conclusion is unequivocal. The UK is much stronger as a part of Europe and Europe is much stronger with the UK as a driving force. There is no upside for the UK in Brexit.”
The OECD’s entry into the debate has not been welcomed by the Out campaign. They have challenged the organisation’s credibility, recalling how it had once suggested Britain might benefit from joining the euro currency.
They have also accused the organisation of making “improbable assumptions” that a post-Brexit Britain would initially have less favourable trading ties with the EU than South Korea or Mexico.
British economists who support leaving the EU will announce their results shortly.