Environment secretary Liz Truss and chancellor George Osborne © Press Association Images
Environment secretary Liz Truss and chancellor George Osborne © Press Association Images

Brexit will threaten UK supply chains, warns Osborne

18 April 2016

George Osborne has warned the UK’s supply chains would face customs barriers for the first time in half a century if the UK votes for a Brexit on June 23.

Osborne made his comments at the unveiling a 200-page Treasury report detailing the likely impact if the UK votes for a Brexit, which he claims would leave British families £4,300 a year worse off, and shrink the economy by 6% by 2030.

Under the scenario of a Canadian-style bilateral trade deal with the EU, Osborne said it would mean “services that make up 80% of our economy cannot do business freely with Europe, and the integrated supply chains that are a feature of our advanced manufacturing face customs barriers for the first time in half a century”.

Osborne went on to say that Brexit would be an “extraordinary self-inflicted wound”, that would cost the British government £36bn in tax receipts.

In the treasury study, released today, Osborne looked at three different scenarios for Brexit: the Norway option, involving partial access to the EU; the Canada option and the World Trade Organisation option.

“Under any alternative, we’d trade less, do less business and receive less investment, and the price would be paid by British families. Wages would be lower and prices would be higher,” Osborne said.

“The most likely result is that Britain would be poorer by £4,300 per household. That is £4,300 worse off every year, a bill paid year after year by the working people of Britain.”

Members of the Brexit camp were quick to dismiss the report’s findings. In a tweet, energy minister Andrea Leadsom called it “extraordinary propaganda,” adding that “not even a witch could make predictions this accurate”.

She went on to tell BBC Radio 4’s World At One programme: "It's extraordinary to have such an accurate central figure and it implies a clarity of crystal-ball gazing that even I, as a fully paid-up witch, couldn't possibly presume.”

Meanwhile, former chancellor and prominent leave campaigner Lord Lawson accused the chancellor of political propaganda.

He told The Guardian: “It is the job of the Treasury to support the chancellor of the exchequer and I was very lucky when I was chancellor in the support I had from the Treasury. But this is basically a political propaganda exercise orchestrated by George Osborne.”

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