Is the IFS right to warn that Britain will be up to £70bn worse off if it leaves the Single Market?

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Denis MacShane, former Europe minister, author of Brexit: How Britain Will Leave Europe and senior adviser at Avisa Partners, Brussels, says Yes.

For centuries, the main purpose of British foreign policy was to gain access for British goods, services, and professions to other markets in the world. Britain currently has unfettered access to 500m mainly middle class consumers in the EU Single Market. It was Margaret Thatcher who forced through the Single European Act which broke down national barriers to British goods, services, and people so that they could be sold or ply for hire in 27 other countries without let or hindrance. Now, the respected and non-partisan Institute for Fiscal Studies (IFS) says that outside the Single Market we lose 4 per cent of GDP – about £2,900 for every household. India still places a tariff of 150 per cent on every bottle of Scotch sold and the US Buy America legislation is highly protectionist. Leaving the Single Market is economic self-harm. A psycho-therapist might be able to explain it, but it cannot make sense to anyone in business.

John Redwood MP, chief global strategist at Charles Stanley, says No.

Staying a member of the Single Market is likely to entail continuing to make some financial contributions to the EU and accepting freedom of movement. Brexit to those who voted Out means taking back control of UK money, borders, taxes and laws. The IFS claims that we will be 4 per cent better off remaining in the Single Market. To get to such a loss, you need to be very pessimistic about trade between the UK and the rest of the EU on leaving. There is every chance, for example, that the UK will keep financial passporting. Why would the EU wish to make access to London more difficult? Why wouldn’t the UK qualify for passports under the MIFID equivalence of regulation rules? There is also the issue of tariffs. The UK may wish to continue with tariff-free trade. Will EU member states agree on specific tariffs they wish to impose on profitable trade with the UK, that are permissible under WTO rules? Do they want the UK to have to retaliate? It is not possible to predict the outcome before any exit and trade negotiations. It is not sensible to put a number on such uncertainty.