George Osborne’s claim that leaving the EU will cost £4,300 per household and drive up government borrowing by £36 billion is based on two key assumptions.
First, that the UK strikes a bilateral deal with Brussels similar to those agreed by Canada, Switzerland and Turkey and championed by Boris Johnson. Second, that the UK ends up being significantly less productive outside Europe than were it to retain full access to the single market.
Both are reasonable assumptions. Mr Johnson said last month: “I think we can strike a deal as the Canadians have done based on trade and getting rid of tariffs.” On productivity, the economic textbooks are clear that more open economies enjoy faster productivity growth because of increased competition, better innovation, greater technology