Opponents of Britain’s membership of the EU are making an “economically illiterate” case that would harm poorer people and cost households the equivalent of £4,300 a year, George Osborne has said.

In his strongest intervention yet in the EU referendum campaign, the chancellor said Brexit would be the “most extraordinary self-inflicted wound” as he hailed a Treasury study claiming the economy would shrink by 6% by 2030.

The chancellor mocked Boris Johnson, who once famously said he was pro-cake and pro-eating cake. “If you want all those things [full access to the single market and a say over its rules] then you have to bear some of the obligations of EU membership,” he said.



“You can’t have your cake and eat it. These people who go round saying Britain would have all the benefits of the EU without any of the obligations – that is economically illiterate and it frankly totally misunderstands the nature of the relationship that Britain might be able to strike outside the EU.”

John Redwood, the former Tory cabinet minister who is campaigning to leave the EU, described the chancellor’s claim that the economy would shrink by 6% by 2030 as worthless. “It is an absurd claim from the Treasury. I’m very sorry that they have degenerated to these levels. This is a Treasury which had to make huge changes to its forecast for the next two years just between November and March because it decided its November forecast was completely wrong.”

The fresh war of words came as the chancellor embarked on one of the government’s most significant moves in the referendum campaign by publishing a 200-page Treasury study, which is designed to provide a sober assessment of the dangers of leaving the EU. Osborne is aiming to repeat the tactics deployed by the UK government during the Scottish referendum, when the Treasury published a series of reports on the dangers of independence.

The chancellor told the Today programme on BBC Radio 4 on Monday: “Today’s Treasury analysis steps away from the rhetoric and sets out the facts that people have asked for. The conclusions could not be clearer. Britain would be permanently poorer if we left the EU to the tune of £4,300 for every household in the country. That is a fact everyone should think about as they consider how to vote. As chancellor I am clear we are stronger, safer and better off in the EU.”

“Take the free trade agreement that Canada has signed, by the way cited by the mayor of London as his preferred model,” the chancellor said. “The problem with the Canadian model is you don’t have access for your services industry, that is 80% of the British economy, 80% of the jobs in the British economy ... The £4,300 per [household], the 6% shock to GDP, is a central estimate based on one of the models.”

The Treasury study has examined all the likely options Britain would face if voters decide to leave the EU in the referendum on 23 June. In addition to the EU-Canada deal it examines:

• A Norwegian-style deal in which the UK has access to the EU’s single market. The UK would still make contributions to the EU budget but has no say over the rules.

• The so-called “clean break” or World Trade Organisation option, in which the UK trades with the rest of the EU and other nations along the rules laid down by the WTO.

The chancellor said that all the alternatives to UK membership of the EU would put Britain in a weaker position as he rejected the idea that Britain could secure a better deal from outside the EU.



Osborne told the Today programme: “Any of these arrangements lead to less access to the European single market unless you are prepared to pay into the EU budget and unless you are prepared to accept the free movement of people but have no say over how both those things operate ... What I would reject is the idea that Britain can sign up to some kind of deal where we get all the benefits of EU membership but none of the obligations or costs. The Germans or French wouldn’t give that to us because it is a better deal than Germany or France gets. It is not credible.”

Osborne also took a swipe at Iain Duncan Smith, the anti-EU former work and pensions secretary, who resigned from the cabinet after accusing the Tory leadership of neglecting the poor, by warning that less affluent voters would be hardest hit by a British exit from the EU. In his resignation statement Duncan Smith questioned whether the Treasury was living up to its commitment to ensure “we are all in it together”.

The chancellor said: “Let me tell you we would not all be in this together if we left the EU. The richest in our country would go on being rich. It would be the poorest, the people whose jobs depend on the car plants, whose jobs depend on the steel-making plants who would be hit if we left the EU.”

He said: “This is a massive decision for our generation, as big as anything we have been asked to address since the war.”

The Vote Leave campaign rubbished the idea that the economy would shrink by 6% by 2030 and said that Britain had nothing to fear from an exit because most of Britain’s arrangements with the EU would remain in place.

Redwood told Today: “It is not very easy to put precise numbers on it and we wouldn’t attempt to put precise numbers on the economy for 2030 because who knows what’s going to happen. Their 2030 forecast is completely worthless.

“It is a completely idiotic idea that we won’t trade with them after we’ve left the EU. But I’d go further than that. I would say I see no reason to change most of the arrangements currently in place. Unless and until the two sides negotiate change things would carry much as they do at the moment.”

The former Tory leadership contender even claimed that a vote to leave would end economic austerity. “We are going to be better off, we are going to banish austerity, we are going to spend our own money, we are going to have the power to make our own laws, we are going to control our own borders. We have an extremely positive vision of a Britain renewed and invigorated by being a full member of the international community again with its own vote and voice.”