View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
April 19, 2016

Brexit economic cost is “gobbledygook” says an ICAEW member and Tory MP

Peter Bone, a member of the Institute of Chartered Accountants in England and Wales (ICAEW) and a Tory MP told the MailOnline that the UK Treasury’s economic analysis addressing a potential Brexit can be called "gobbledygook".

On 18 April the Treasury published a study called The long-term economic impact of EU membership and the alternatives.

In this study the Treasury argues that a Brexit will have a negative impact on the national economy, which could make UK households £4,300 ($6,107) worse off per year.

The Treasury’s analysis considered three Brexit scenarios for the next 15 years.

First, a scenario whereby the UK would be a member of the European Economic Area, following the model of Norway. In this case the annual loss of GDP per household would be £2,600.

Second, a scenario in which EU membership is replaced by a negotiated bilateral agreement, on the same model as the agreements in place between the EU and Switzerland, Turkey or Canada. The cost of leaving the EU in this case would be £4,300.

In the third scenario, the UK relationship with the EU is exclusively based upon a World Trade Organisation (WTO) membership, like Russia or Brazil. The cost for UK households yearly is in this case £5,200.

All in all, after 15 years the UK GDP would be between 5.4% and 9.5% lower.

Bone told the MailOnline: "I’ve studied the document closely and we have an accountancy term for the document: it’s called gobbledygook."

"You can make any assumption about the future and produce any result you want and producing complicated formulas and saying this looks very important and must be right because the Government says so and isn’t this complicated – that’s what they’re relying on, there’s just no basis for it."

Bone continued: "There’s absolutely no basis and it’s completely foundless but because they say it over and over again as if it’s a fact, people start to believe it and that’s what this Project Fear is about."

A spokesperson for ICAEW said the institute would not comment on the views that its members hold.

Asked whether ICAEW has officially taken a stand on the referendum, the spokesperson said: "As an organisation ICAEW is taking a neutral position on the EU Referendum. We will however seek to inform the discussion so that our members, as well as the wider electorate, can make an informed choice."

 

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to International Accounting Bulletin