The OECD on Wednesday warned Britons would be financially worse off if they voted to leave the European Union, as new figures showed a slowdown in Britain’s economic growth.
The Organisation for Economic Cooperation and Development’s verdict, which comes as Britons prepare for an EU membership referendum on June 23, follows warnings over Brexit’s potential economic damage from the IMF, the G20 and US President Barack Obama.
The OECD’s interjection however sparked anger from “Leave” campaigners who attacked the inter-governmental body for seeking to preserve its taxpayer-funded “global bureaucracy”.
“In some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU,” the OECD said in a new report released in London.
British gross domestic product (GDP) would be 3.3 percentage points smaller by 2020 if Britain left the EU than if it stayed, and 5.1 percentage points smaller by 2030, the OECD said.
It cited the impact of economic uncertainty, higher trade tariffs, a reduction in economic migration and the impact on the sterling currency as near-term risks.
“The UK is much stronger as a part of Europe, and Europe is much stronger with the UK as a driving force,” said OECD secretary-general Angel Gurria.
“There is no upside for the UK in Brexit. Only costs that can be avoided and advantages to be seized by remaining in Europe. No one should have to pay the Brexit tax.”
In real terms, the relative loss of GDP would see household income reduced by £2,200 (2,800 euros, $3,200) in the next four years and £3,200 by 2030 — and by up to £5,000 in the most pessimistic case compared to what it would be if Britain stayed, according to OECD analysis.
“The best outcome under Brexit is still worse than remaining an EU member, while the worst outcomes are very bad indeed. The Brexit tax just gets bigger,” added Gurria.
The analysis reflects that made by Britain’s finance ministry.
However, campaigners for Britain to leave the EU dismissed the study.
“Jose Angel Gurria is part of a global bureaucracy that feathers its nest with vast expenses claims paid for by taxpayers,” said Robert Oxley, a spokesman for the Vote Leave campaign.
He said the OECD had recommended Britain join the euro, “so why should we listen to their doom-laden predictions about leaving the EU?”
– Impacting economic growth –
Opinion polls show Britons are divided on the issue, although the “Remain” camp has a slight lead, and experts warn the uncertainty is already impacting economic growth.
New figures published Wednesday showed GDP grew by 0.4 percent in the first quarter of this year, down from 0.6 percent in the prior three months.
“UK continues to grow but OECD warns today that threat of a vote to Leave the EU is weighing on economy,” Finance Minister George Osborne said on Twitter.
Osborne, who with Prime Minister David Cameron backs the campaign to stay in the EU, warned last week that Britain would be “permanently poorer” if it left, citing a detailed Treasury analysis.
However, the “Vote Leave” campaign dismissed that report as “flimsy”, and repeated their arguments that Britain could forge a successful future outside the bloc.
The OECD report said a British free trade agreement with the EU would partially offset the loss of access to the single market by 2023, but said the costs would be higher.
It warned that bilateral UK-EU trade would contract, and Britain would face additional barriers on third-country markets, to which it currently has preferential access.
Obama had warned last week that Britain would go to the “back of the queue” for a trade deal with the United States if it left the EU.