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MPs criticise key claims made by Remain and Leave campaigns

Published 27/05/2016

Analysts have warned that thousands of pounds cold be wiped off the value of retirement funds if the UK votes to leave the European Union
Analysts have warned that thousands of pounds cold be wiped off the value of retirement funds if the UK votes to leave the European Union

Key campaign claims by both sides in the EU referendum have been strongly criticised in a scathing report by a cross-party group of MPs.

The Commons Treasury Committee - which includes MPs on both sides - said Vote Leave's "core" campaign claim Brexit would deliver a £350 million-a-week windfall was "highly misleading".

And it said the Remain side's claim that families would be £4,300 a year worse off if Britain was outside the EU was "likely to be misconstrued by voters" and had "probably confused them".

While the findings are embarrassing for both sides, the committee chairman, Tory MP Andrew Tyrie, said Vote Leave were guilty of "by far the most serious" offence.

He called on them to repaint their battle bus, which has been touring the country with Boris Johnson and other prominent Out campaigners and carries the slogan: "We send the EU £350 million a week - let's fund our NHS instead."

"That is simply untrue, it is highly misleading and it is deeply troubling that they should be persisting with this," Mr Tyrie told BBC Radio 4's The World at One.

The committee said the claim that withdrawal would release the £350 million a week the UK contributes to the EU to spend on things "like the NHS and schools" failed to take account of the £152 million a week it received back through the EU budget and the British rebate.

It said that it was "deeply problematic" Vote Leave was continuing to use the figure, despite repeated warnings that it was misleading, including from the head of the official statistics watchdog.

"It is very unfortunate that they have chosen to place this figure at the heart of their campaign.

"This has been done in the face of overwhelming evidence, including that of the chair of the UK Statistics Authority, demonstrating that it is misleading," it said.

"Vote Leave's persistence with it is deeply problematic. It sits very awkwardly with its promises to the Electoral Commission to work in a spirit that reflects its 'very significant responsibility' and the 'gravity of the choice facing the British people'."

While Mr Tyrie said the Government "have done a bit better", there was a sharp rebuke for Chancellor George Osborne over his assertion that a Treasury analysis showed "families would be £4,300 worse off" if there was a vote for Leave.

"This is not what the main Treasury analysis found; the average impact on household disposable incomes would be considerably smaller than this number, which refers to the impact on GDP per household," the committee said.

"Neither Government departments nor other spokespeople for the Remain side should repeat the mistaken assertion that household disposable income would be £4,300 lower than if we were to remain in the EU... To persist with this claim would be to misrepresent the Treasury's own work."

The committee said that David Cameron was "almost certainly mistaken" to have claimed at the outset of his EU re-negotiation that he could substantially restrict the numbers of EU migrants coming to Britain while remaining in the EU.

The changes agreed to in-work and child benefits would "at best" lead to a "modest" reduction in inward migration and a fall in welfare spending - although this could be "significantly offset" by the introduction of the national living wage making the UK more attractive to migrants.

At the same time, Mr Johnson and others on the Leave side were also "almost certainly mistaken" in claiming that the UK could have unfettered access to EU markets while ending free movement of labour.

Achieving the unanimous consent of the remaining EU member states to a comprehensive trade deal if there was a vote for Brexit would be a "significant challenge", the committee said.

"It is disingenuous to claim with any confidence, as some representatives from the Leave campaign groups have done, that the UK would be able to leave the EU, drop free movement and continue to have the same rights to trade with EU member states as it does now," it said.

The committee said a vote to leave would result in a period of economic uncertainty - which could see the pound weaken, investment fall and borrowing costs rise - although this could be mitigated by the actions of the Government and the Bank of England.

"The duration of this uncertainty, and hence the length of time that these effects would persist, is itself uncertain, but is likely to be in excess of one year," it said.

However, if the referendum on June 23 resulted in a vote to remain, the "single most significant risk" would be to the City and the financial services sector.

"The pursuit of further economic and financial integration within the eurozone, including the development of a banking union, could threaten the UK's influence over how single market regulation develops, its access to EU financial markets, and the flexibility of its financial regulators to respond to risks," it said.

While the Government had negotiated a set of principles intended to safeguard the interests of countries outside the eurozone, there was a risk they "will not be properly respected or correctly interpreted".

Prominent Leave campaigner, and Treasury committee member, Tory MP Jacob Rees-Mogg said both sides had made "misleading" statements, but refused to be drawn on whether the £350 million figure should be removed from the side of the bus.

"I care nothing about the bus. I am not concerned about charabancs. That is not at the heart of the debate.

"I have always used the net figure. What is far more shocking is that the Chancellor has been using a figure he knew would be misleading," Mr Rees-Mogg told The Press Association.

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