Leaving the European Union would be economic self-destruction for Britain, shattering stability, Prime Minister David Cameron said, presenting a finance ministry report warning of recession, a tumble in the pound, and half a million job losses.
Cameron and Chancellor George Osborne, who are campaigning for Britain to stay in the EU in the June 23 referendum, have warned that households would be hurt by a fall in the value of their homes and face costlier foreign holidays if they voted “Leave”.
“It would be a DIY recession,” Cameron said in a speech at the offices of the B&Q retail chain, a popular centre for do-it-yourself home improvement, in Eastleigh in southern England.
Speaking a month before the vote, Cameron said that leaving the EU would jeopardise Britain’s recovery from the economic damage caused by the world financial crisis.
“It would be like surviving a fall and then running straight back to the cliff edge. It is the self-destruct option,” Cameron said.
Recent opinion polls have shown voters are leaning towards a “Remain” decision on June 23, but pollsters say the outcome remains too close to call. Betting odds indicate 80-85 per cent probability of a “Remain” vote.
The economy could be as much as six per cent smaller two years after a Brexit vote than if it the country decides to stay in the EU
Some polls have also shown the economy growing in importance as an issue for voters, something the “Leave” campaign has sought to counter by stressing that only leaving the EU can slow high levels of migration and avoid future economic stagnation.
A new analysis of short-term risks from the referendum published by the finance ministry on Monday said the economy could be as much as six per cent smaller two years after a Brexit vote than if it the country decides to stay in the EU.
The campaign backing a British EU exit insists the latest analysis was biased: “What they’ve done is they assumed a disaster and then spelled out the details,” Nigel Lawson, Chancellor under the late prime minister Margaret Thatcher in the 1980s, told BBC TV.
“They’ve done this in order to scare the pants off the British people because they can’t find anything positive to say about the European Union.”
Osborne defended the credibility of the report, saying it had been reviewed by Charlie Bean, a former deputy governor of the Bank of England.
The forecast of a year-long recession by the finance ministry was gloomier than a warning by Bank of England Governor Mark Carney who said earlier this month that Britain’s economy could enter a technical recession – which means two consecutive calendar quarters of contraction – after a vote to leave the EU.