Viscount Waverley – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Viscount Waverley on 2016-04-13.

To ask Her Majesty’s Government whether, in the event of the UK leaving the EU, the UK would have to leave the EU electronic banking system, the Single Euro Payments Area, by which funds can be transferred across the EU.

Lord O’Neill of Gatley

The paper ‘The process for withdrawing from the European Union’ set out that a vote to leave the EU would be the start, not the end, of a process. It could lead to up to a decade or more of uncertainty. One consideration for the UK Government would be how to avoid regulatory gaps in the UK’s domestic legislative framework once the EU Treaties ceased to apply. This would involve questions over how existing EU law could or should be adopted into domestic law.

At the February European Council, the Government negotiated a new settlement, giving the United Kingdom a special status in a reformed European Union. The Government’s view is that the UK will be stronger, safer and better off in a reformed EU.

In April 2016, HM Treasury published analysis that shows that if the UK leaves the EU, the UK would be permanently poorer. The analysis estimates an annual loss of 6.2% of GDP after 15 years, which is equivalent to £4,300 per UK household. The negative impact to GDP would result in weaker tax receipts, which would be £36 billion a year lower. This is more than a third of the NHS England budget and the equivalent of 8p on the basic rate of income tax.

These estimates are based on a central scenario: leaving the EU to negotiate a bilateral trade agreement with Europe, along the lines of that which took Canada seven years to negotiate.

Through a range of realistic assumptions, many of them cautious, the HM Treasury analysis produces objective and robust estimates, which are within the range of external studies.

A full assessment of the short-term implications of leaving the EU will be published in a further government document.