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G7 believes Brexit would be threat to economic growth, says David Cameron

Published 25/05/2016

David Cameron says his case for a Remain vote in the June 23 referendum on Britain's EU membership has been significantly bolstered by an independent think-tank's warning of two more years of austerity if voters opt for Brexit.

The Prime Minister said the Institute for Fiscal Studies assessment was "very, very powerful" and backed analysis by the Treasury on the risks of leaving the 28-nation bloc.

Arriving in Japan for a G7 summit of the world's leading economies, Mr Cameron said there is a consensus among Britain's key allies that continued EU membership would be better for the UK and the world.

But he played down the prospect of a fresh G7 statement on Brexit, pointing out that the organisation - and the larger G20 - had already made its view clear, as had the leaders of member states the US, Japan, France, Germany, Italy and Canada.

Brexit will feature on the margins of a "pretty packed" agenda for the Ise-Shima summit, which will be dominated by issues like extremism, economic growth, corruption and global health risks, he said.

"I'm sure that Brexit will be on the agenda, but the G7 and G20 have already made clear that they think it is a threat to economic growth and a risk to the world economy, and the leaders have already very much made their views clear," said Mr Cameron.

Welcoming the IFS report - which also dismissed the Leave camp's central claim that the UK would have an extra £350 million a week to spend after Brexit - Mr Cameron said the think-tank's judgments were "always held out as the independent gold standard".

"What they are saying about the £350 million claim and what they are saying about the effect upon our economy of Brexit, that is very, very powerful and it backs up what the Treasury and others have been saying," he said.

Mr Cameron said he was hoping to use the summit in Japan to hold further talks on the crisis in Europe's steel industry with French President Francois Hollande, Germany Chancellor Angela Merkel, Italian PM Matteo Renzi, European Commission President Jean-Claude Juncker and European Council President Donald Tusk.

He said tariffs imposed by the EU had already been "effective" in reining in China's dumping of surplus steel at low prices in the European economy.

"Wherever we have taken action, there has been very steep - 90%-plus - reductions in Chinese steel imports," he said.

The dangers posed by over-capacity in sectors like steel would be "quite a feature" of discussions at the summit, said Mr Cameron.

"This is a good opportunity to talk again with the European Commission and the president of the Council and France, Germany and Italy about the actions we are taking in Europe to put tariffs up against dumping of Chinese steel, which is effective."

Mr Cameron pledged that the UK Government would "continue to work towards trying to get a good outcome" for the Tata steel plant in South Wales, but admitted he could not guarantee a buyer would be found to take it off the hands of its Indian owners.

"The sales process is under way, there has been an encouraging number of serious companies and offers coming through," said the PM.

"We have got to stick to it and do everything we can to work to bring this to a successful conclusion. There is no guarantee. We can't guarantee this is going to work, but we will do everything we can."

Mr Cameron said the G7 summit had become a more useful forum to make progress on major global issues since the expulsion of Russia in 2014 over its interference in neighbouring Ukraine.

He will press fellow leaders to maintain pressure on Moscow by extending sanctions when they come up for renewal in the summer.

Mr Cameron will also seek to use Ise-Shima to take forward measures on tax transparency proposed at the anti-corruption summit he hosted in London, as well as the fight against drug-resistant superbugs which he has made a personal crusade.

"The good thing about this is that since Russia's departure, the G7 is the place where the truly liberal democracies, like-minded countries, can come together and talk about the really big threats not just to the world economy and the world but to our own countries," said Mr Cameron.

"The things we're going to be discussing, whether it's fighting extremism and terrorism, keeping economies growing, whether it's fighting health risks like anti-microbial resistance, whether it's tackling things like the corruption that do so much to damage our economies, this is the place where you can have good discussions, frank discussions, private discussions, and if countries agree to do things, we really do get things done."

Mr Cameron was flown by Japanese military helicopter to the summit venue, the luxury Shima Kanko Hotel, where he held talks with his host, Japanese PM Shinzo Abe.

Flanked by aides and facing each other across a table decorated with traditional Japanese bonsai trees, the two premiers said they were pleased to meet again so soon after Mr Abe's trip to London earlier this month.

Mr Cameron said: "I thought it was a very good visit and a real strengthening of our bilateral relations on trade and investment, political co-operation and security issues.

"I think it was a very successful visit and I look forward to building on it here."

Mr Abe said he had received "wonderful hospitality" in the UK and in particular "the time my wife and I spent at Chequers was superb".

He added: "I would like to bring this summit to a successful conclusion in close co-operation with you."

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