Family holiday costs will rise by hundreds of pounds if Britain were to leave the European Union, David Cameron warns today.
The latest analysis from Whitehall is based on an ‘out’ vote causing sterling to fall by 12% over the next two years.
The Treasury claims this would push up the cost of accommodation, food and drink for families travelling overseas.
It would mean an eight-night holiday for four people to Europe would rise by £230 while a 14-night stay for four people to the US would increase by £620.
A vote to leave would also affect the cost of holidays to popular destinations outside the EU, such as Florida, with sterling expected to depreciate against other currencies including the US dollar.
The analysis suggest a devaluation of the pound could put low cost flights, reduced mobile phone roaming charges, free Europe-wide healthcare and duty free at risk.
Cameron said: “All the evidence points to the value of the pound falling after a vote to leave the EU. A weaker pound means people’s hard-earned savings won’t go as far on holidays overseas.
“The choice facing the British people on June 23 is increasingly clear: the certainty and economic security of remaining in the EU or a leap in the dark that would raise prices, including the cost of a family holiday.”
The Treasury also points out that as well as the immediate effects of a weaker pound on the real-world cost of goods and services for those travelling abroad, should Britain vote to leave, there could also be impacts on other arrangements that have benefitted British holidaymakers.
Cheap flights within the EU might also be jeopardised if the UK left the EU’s single market, said the analysis.
Low cost air fares fell by more than 40% between 1992 and 2000, following the introduction of a single market for aviation, which allowed any EU airline to operate routes from and between any EU airport.
But without the single market, the UK would lose this benefit, which has increased competition and driven down costs for passengers, according to the Treasury.
EasyJet chief executive Carolyn McCall said: “For easyJet and our passengers membership of the EU has been a good thing. The common aviation area created by the EU allows any European airline to fly anywhere in Europe. This has kept all airlines’ costs low and has enabled low fares airlines like easyJet to expand.”
She said if the UK were to vote to leave the EU, then any new, more restrictive aviation arrangements would add cost and push up fares.
“A weaker pound would mean the cost of a holiday abroad, including food, accommodation and drinks, would be more expensive. That is why we think our customers are better off in Europe,” added McCall.
Her comments echoed those of her Ryanair counterpart Michael O’Leary who yesterday reiterated his opposition to Brexit.
The prime minister, who will be seen standing in front of an easyJet aircraft with McCall, is set to discuss the Treasury’s recent warning that leaving the EU would make Britain poorer by the equivalent of £4,300 per household by 2030 and every year thereafter.