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Costs and benefits of UK's EU membership report published

The Treasury Committee publishes its report 'The economic and financial costs and benefits of the UK’s EU membership'.

Chairs comments

Commenting on the report, Right Hon. Andrew Tyrie MP, Chairman of the Treasury Select Committee, said yesterday:

"The arms race of ever more lurid claims and counter-claims made by both the leave and remain sides is not just confusing the public. It is impoverishing political debate. Today is the first day of the main campaign. It needs to begin with an amnesty on misleading, and at times bogus, claims. The public are thoroughly fed up with them. The public are right.

The Treasury Committee – comprised of prominent Brexiteers and Remain campaigners – has agreed a unanimous report. Over several months, the Committee has been examining these claims, and has come to some firm conclusions about a number of them.

The Committee found that Vote Leave's core campaign number – the idea that leaving the EU would give the country a £350m a week fiscal windfall to spend on hospitals and schools – is "highly misleading" £350m a week, and the suggestion that this money can and should be spent on the NHS, decorates Vote Leave’s "battle bus". The Committee found that Vote Leave’s persistence with this claim is “deeply troubling".

Leading remain campaigners are also at it. Claims that 3 million jobs are dependent on continued EU membership are, in the Committee's view, "misleading". Even the claim that 3 million jobs are linked to EU trade might well lead the public, as the Committee puts it, to "form the mistaken impression that all these jobs would be lost".

The Committee concluded that the claim that families will be worse off by £4,300 a year as a result of Brexit "is likely to be misconstrued by readers […] and has probably confused them".

Other claims abound, among them the alleged savings on EU red tape and the cost of food from the leave campaign; and claims about the effect on mortgages, pensions, house prices and family incomes. Unless these claims are heavily qualified and carefully explained, they are liable to be misunderstood.

Any single number purporting to measure the impact of staying or leaving inevitably over-simplifies the complexities underlying the question on the ballot paper.

A few grains of truth accompany the mountain of exaggeration and unqualified assertion.

First, a period of uncertainty will almost certainly accompany Brexit and it is "plausible" that this would "weaken the pound, reduce domestic and foreign direct investment, and increase borrowing costs". The balance of evidence seen by the Committee strongly supports the view that there will be a short-term economic cost to Brexit.

Second, in the longer-term trade with the EU is likely to fall. The balance of evidence seen by the Committee suggests that this will also carry an economic cost, although this is more uncertain. Much will depend on the new trade arrangements that would be put in place.

Third, the Committee noted that Brexit could create potentially beneficial opportunities: to improve the regulatory framework, and to strike new trade and better trade deals with countries outside the EU.

A key question is whether the risks of the first two are worth opportunities that could accompany the third. On this the Committee concluded that "reaching high-quality trade agreements with countries like China, India and the United States, while securing access to the agreements to which the UK is party by virtue of its EU membership, would be a considerable diplomatic challenge; it would take time, resources and the goodwill of other governments."

Fourth, the Committee confined itself to looking at economic costs and benefits. But this is only part of the story. For some, other issues are more important. As the founder of put it, for him: "this isn't about pounds and pence, it's about democracy"."

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