A leading thinktank – Open Europe – has delivered a warning to the UK Independence Party (UKIP), stating that Britain could lose 2.23 per cent of its GDP by 2030 (approximately £56bn) if it leaves the EU and the attached benefits of the single market.
If Britain chooses to leave the EU, it would end free movement of European citizens to and from the country and, according to the thinktank, result in a substantial economic loss.
Open Europe, which campaigns for reforms that are likely to be included in any future EU renegotiation deal, recently released a report that explored the various options available for a UK exit.
Prime Minister David Cameron has already made it clear that he wants Britain to remain in the EU, as long as there are reforms to better reflect Britain’s aims.
The report supports this mind-set in that it states an EU exit negotiation would be so complicated that Britain’s best option is to look at renegotiating its existing terms.
Entitled “What If”, the thinktank report outlines four scenarios, ranging in desirability and including the worst case scenario for if Britain were to leave the EU.
According to the thinktank, the worst case scenario option would lead to tariffs at the physical border, which could be up to ten per cent on car exports, while Britain’s financial services industry would not be accessible to the EU.
A spokesperson for Open Europe said that the worst case scenario would lead to a fall in GDP of 2.23 per cent and said: “It is mutual destruction.
“It could happen, it is not completely beyond the stretch of the imagination because if you leave on very hostile terms, in very chaotic terms and if you have a breakdown in negotiations or if you don’t strike a deal in the two year period you could see how you can have tariffs all of a sudden erected.”
Two years of negotiations follow when a member state formally indicates its intention to leave the EU by invoking article 50 of the Lisbon treaty.