Research and analysis

HM Treasury analysis: the long-term economic impact of EU membership and the alternatives (Archived)

Analysis of the long-term economic impact of EU membership and the alternatives has been published by the Treasury.

• From: HM Treasury, Cabinet Office, Prime Minister's Office, 10 Downing Street and The Rt Hon George Osborne
• Published: 18 April 2016

This was published under the 2015 to 2016 Cameron Conservative government

Documents

HM Treasury analysis: the long-term economic impact of EU membership and the alternatives

Ref: ISBN 978-1-4741-3090-5, PU1908, Cm. 9250

PDF, 6.19 MB, 201 pages

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HM Treasury analysis: the long-term economic impact of EU membership and the alternatives (print)

Ref: ISBN 978-1-4741-3089-9, PU1908, Cm. 9250

PDF, 8.97 MB, 206 pages

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Details

This document assesses continued UK membership of the EU against the three existing alternative models:

• membership of the European Economic Area (EEA), like Norway
• a negotiated bilateral agreement, such as that between the EU and Switzerland, Turkey or Canada
• World Trade Organisation (WTO) membership without any form of specific agreement with the EU, like Russia or Brazil

The Treasury’s analysis shows that the UK would be permanently poorer if it left the EU and adopted any of these models. Productivity and GDP per person would be lower in all these alternative scenarios, as the costs would substantially outweigh any potential benefit of leaving the EU. The analysis finds that the annual loss of GDP per household under the three alternatives after 15 years would be:

• £2,600 in the case of EEA membership
• £4,300 in the case of a negotiated bilateral agreement
• £5,200 in the case of WTO membership

The negative impact on GDP would also result in substantially weaker tax receipts, significantly outweighing any potential gain from reduced financial contributions to the EU. After 15 years, even with savings from reduced contributions to the EU, receipts would be £20 billion a year lower in the central estimate of the EEA, £36 billion a year lower for the negotiated bilateral agreement and £45 billion a year lower for the WTO alternative.

Read the news story, Chancellor’s speech and press release.

Published 18 April 2016