LONDON – British politicians and bankers tussled Tuesday over the economic impact of quitting the European Union, with an exit-supporting Cabinet minister accusing his opponents of treating voters like children and trying to scare them into staying with forecasts of doom.
But Bank of England Governor Mark Carney said uncertainty about Britain’s future was already having a destabilizing effect on the economy and driving down the value of the pound.
Carney, who has avoided backing either side outright, told a House of Lords committee that leaving the EU would cause an “extended period of uncertainty about the economic outlook” and could slow growth.
On Monday, the Treasury said quitting the EU — a prospect known as Brexit — would leave the British economy 6 per cent smaller by 2030, the equivalent of a 4,300 pound ($6,100) loss per household.
Carney said he was not involved in the Treasury analysis but the “broad approach to me makes sense.”
Justice Secretary Michael Gove, who backs Brexit, said that was an example of scare tactics by a pro-EU campaign that treats people “like children — unfit to be trusted and easily scared by ghost stories.”
In a speech in London to supporters of the Vote Leave group, Gove said warnings that Britain faced economic decline and isolation outside the EU offered a “profoundly negative vision of the future.”
“I sometimes think that the ‘In’ campaign appears to be operating to a script written by George R.R. Martin and Stephen King — Brexit would mean a combination of ‘A Feast for Crows’ and ‘Misery,'” he said.
In contrast, he said leaving the EU would be the start of “a happy journey to a better future” in which Britain would control its borders, laws and economy.
Britain will decide in a June 23 referendum whether to leave the 28-nation bloc. Prime Minister David Cameron and many in his government support staying in, but Gove and several other ministers are backing a “leave” vote.
The “remain” campaign accuses Gove and others of failing to outline what relationship Britain would have with the EU if it leaves. As an EU member, Britain is part of a single market of some 500 million people and does most of its trade with other members of the bloc.
Gove said that if Britain left the EU it “would still benefit from the free-trade zone which currently stretches from Iceland to the Russian border, but we wouldn’t have all of the EU regulations” and associated cost.
Others have challenged that view, pointing out that countries such as Norway and Iceland have had to agree to abide by EU rules in order to be admitted to the free-trade zone.
“Michael Gove wants to wish away reality, but the truth is every credible independent forecaster says Brexit will hurt our economy,” said Labour Party lawmaker Alan Johnson.