Quitting the EU will reinvigorate the British economy, creating a flood of extra revenue for the Exchequer that could cut taxes, boost public spending and slash the national debt.
The Budget for Brexit report was prepared by a 16-strong group of Eurosceptic economists, Economists for Free Trade.
It comes as the Office for Budget Responsibility reveals that the UK tax burden, at over a third of national income, is about to hit its highest level for nearly 50 years, when Labour’s Harold Wilson was in power in 1970.
Assuming Brexit occurs in the third quarter of 2020, the Economists for Free Trade group predicts that growth will improve as costs and unemployment fall, real wages will rise and higher output will drive down the exchange rate as new markets are sought by exporters.
The 37-page report rejects gloomy economic forecasts from the Treasury and Office for Budget Responsibility.
It says: “It is certain that the OBR will not make the positive assessment of Brexit that we have made.
“It would seem that they, like the Treasury today, do not question the analysis of a clean Brexit made by the Treasury during the referendum, which asserted that the long-run effects would be substantially negative and the short-run effects would be a recession.”
The promise of a big boost to the economy over the next decade is based on a new economic forecast which factors in a fall in prices because of the scrapping of EU tariffs on goods from the rest of the world, improved export performance and an end to the annual EU subscription of £10billion.
The economists predict this will push growth up to nearly three per cent a year by the mid-2020s.
Over the first half of the 2020s, state borrowing and the national debt will fall.
The budget surplus is expected to reach £40billion a year by 2025, rising to around £90billion by the end of the decade.
The report forecasts that the Chancellor could prudently give away an extra £25billion a year over 2020-2025 in lower taxes and/or higher spending and still pay off debt.
From 2025 onwards he would have an extra £40billion to play with, making a total of about £65billion a year.
The research has been led by Margaret Thatcher’s former adviser, Professor Patrick Minford.
To illustrate the scale of the potential tax cut dividend from Brexit, the report says it would cost just £12billion by 2025 to reduce corporation tax by two per cent, the higher rate of income tax by two per cent and the additional rate by seven per cent.
This would leave another £13billion which could be spent, for instance, on the NHS.
With an extra £40billion of revenue resulting from fast post-Brexit growth after 2025, the report calculates that corporation tax could be cut by a further three per cent, the higher rate of tax by another two per cent and the standard rate by two per cent.
This would cost around £20billion leaving a further £20billion to raise public spending while keeping debt at a prudent level of below 60 per cent of national output.
Professor Minford said: “When Britain leaves the EU it is essential the right policies are in place to ensure our economy thrives and seizes the economic opportunities of Brexit.
“The Chancellor and the Treasury play a central role in this and must show ambition and leadership. Regrettably, since before the referendum the Treasury and the OBR have been consistently negative about a post-Brexit economy. The Chancellor must use this Budget to set out a positive vision of a Britain thriving outside the EU.
“We have set out a Budget for Brexit that would provide huge tax cuts for hard-working people and cuts to corporation tax while at the same time reducing the debt to GDP ratio and enabling spending rises.
“We urge the Chancellor to set out a Budget that will take full advantage of the opportunities Brexit brings.”