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| Poorer families would shoulder heavier burden of Brexit costs - report | |
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| Low-income households are likely to shoulder a disproportionate share of the costs of Brexit if the UK votes to leave the EU in this month’s referendum, a respected thinktank has warned. | Low-income households are likely to shoulder a disproportionate share of the costs of Brexit if the UK votes to leave the EU in this month’s referendum, a respected thinktank has warned. |
| Under a worst-case scenario some low-income households could receive as much as £5,542 per year less in tax credits and benefit payments in 2020, according to the National Institute of Economic and Social Research. | Under a worst-case scenario some low-income households could receive as much as £5,542 per year less in tax credits and benefit payments in 2020, according to the National Institute of Economic and Social Research. |
| NIESR concludes that Brexit would knock government tax receipts and so force changes to tax and spending policies, assuming the government sticks to tough goals under George Osborne’s fiscal charter to get the public finances into surplus. | NIESR concludes that Brexit would knock government tax receipts and so force changes to tax and spending policies, assuming the government sticks to tough goals under George Osborne’s fiscal charter to get the public finances into surplus. |
| Angus Armstrong, one of the report authors, said: “Our analysis combines the consensus of macroeconomic forecasts with the spirit of the government’s fiscal charter. Based on these assumptions, our results show that a disproportionately large share of the costs of Brexit is likely to fall on low-income households.” | Angus Armstrong, one of the report authors, said: “Our analysis combines the consensus of macroeconomic forecasts with the spirit of the government’s fiscal charter. Based on these assumptions, our results show that a disproportionately large share of the costs of Brexit is likely to fall on low-income households.” |
| NIESR emphasised that any benefit losses to low-income households from Brexit would come on top of other losses that some economists estimate households would suffer from the impact on trade of leaving the EU. | NIESR emphasised that any benefit losses to low-income households from Brexit would come on top of other losses that some economists estimate households would suffer from the impact on trade of leaving the EU. |
| Co-author Katerina Lisenkova said: “Our analysis shows that low-income households could lose in two ways: their share of the loss of national income plus lower welfare payments in order to meet the spirit of the fiscal charter. The effect on low-income families is likely to be large.” | Co-author Katerina Lisenkova said: “Our analysis shows that low-income households could lose in two ways: their share of the loss of national income plus lower welfare payments in order to meet the spirit of the fiscal charter. The effect on low-income families is likely to be large.” |
| Analysing possible changes to government spending and tax policy after a vote to leave the EU, NIESR said in the worst case, where the government places 100% of the burden on welfare spending, it calculates that different categories of low-income households could receive between £1,861 and £5,542 per year less in tax credits and benefit payments in 2020. | Analysing possible changes to government spending and tax policy after a vote to leave the EU, NIESR said in the worst case, where the government places 100% of the burden on welfare spending, it calculates that different categories of low-income households could receive between £1,861 and £5,542 per year less in tax credits and benefit payments in 2020. |
| Assuming the government places 50% of the burden of adjustment on welfare spending, low-income households could receive between £930 and £2,771 per year less in tax credits and benefit payments in 2020. With just two weeks to go until the 23 June referendum, the NIESR analysis is expected to provoke a reaction from leave campaigners who say many economists have overlooked the potential economic benefits from being outside the EU. | Assuming the government places 50% of the burden of adjustment on welfare spending, low-income households could receive between £930 and £2,771 per year less in tax credits and benefit payments in 2020. With just two weeks to go until the 23 June referendum, the NIESR analysis is expected to provoke a reaction from leave campaigners who say many economists have overlooked the potential economic benefits from being outside the EU. |
| NIESR said the research on low-income households was funded by the bank JP Morgan but that the thinktank itself had full editorial control and an agreement with the funding provider to publish the results whatever they showed. | NIESR said the research on low-income households was funded by the bank JP Morgan but that the thinktank itself had full editorial control and an agreement with the funding provider to publish the results whatever they showed. |