The report also rejects claims leaving the EU would bring an additional £350m per week, with the authors stating the figure is based on the assumption that other EU countries would continue to pay a rebate to the United Kingdom after it left the union.
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The IFS warns that taking the most optimistic scenario, where the downward pressure on the economy means that national income falls just 2.1% by 2019, borrowing would still be more than £20bn higher than is now planned.
Carl Emmerson, Paul Johnson, Ian Mitchell, and David Phillips said in a report, entitled “BrExit and the UK’s public finances”, that while Britain would suddenly find itself £8 billion ($11.69 billion) better off with the ending of payments to the European Union, the United Kingdom economy would actually shrink over the course of two years.
Vote Leave has hit back at the report calling the IFS a “paid-up propaganda arm of the European Commission”. In that scenario achieving the government’s aim of creating a balanced budget by 2019-20 would mean the equivalent of an additional £5bn of cuts to public service spending, an additional £5bn of cuts to social security spending and a tax rise of more than £5bn.
Chancellor George Osborne has pledged to return the United Kingdom to a surplus by 2020, with the Office for Budget Responsibility forecasting that the United Kingdom would have a budget surplus of £10.4 billion in 2019/20 and £11 billion the year after.
“That funds some of the more academic end of the research that we do and certainly doesn’t impact on this kind of work”.
“We’ve just heard that they do get money from European bodies and they get money from British official bodies as well”.
The campaign claimed: “The IFS is not a neutral organisation”.
Prime Minister David Cameron has received the support of organizations from the Organization for Economic Cooperation and Development to the International Monetary Fund as he stresses the economic costs of a vote to quit the European Union in the June 23 referendum. It comes two days after the Treasury warned that a vote to quit the bloc could plunge Britain into a recession and push up net borrowing by 39 billion pounds over the next two years.
Falling immigration in the event of a Brexit will make the UK’s economy smaller and British citizens poorer, according to a new study.
He added: “If you look at some of the modelling that, for example, Patrick Minford has done, what he has assumed is not that we renegotiate all these things, it is saying we will just throw our borders open – get rid of all the tariffs coming into the United Kingdom and probably leave the tariffs the rest of the world charges on our exports the same”.
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A spokesman for the Treasury said the IFS was “unequivocal” in its report that Britain’s public finances would take an immediate hit if the nation voted for Brexit.
