THE European Union is a “force for social injustice," which backs the haves rather than the have-nots, leading Outer Iain Duncan Smith has claimed as a leading think-tank warned the pound could tumble by a fifth if Britain voted to leave.

As the rhetorical heat of the in-out battle continued to simmer with Alan Johnson, who leads Labour’s In campaign accused of demeaning the contest by calling the Leave side "unbalanced extremists," Gordon Brown was preparing to enter the fray with his first major speech.

The former Prime Minister, whose tub-thumping oratory was said by many to have been key in defeating the push for Scottish independence in the 2014 referendum, will give a keynote address at the London School of Economics today.

Labour sources also revealed Mr Brown would be making another speech in Birmingham tomorrow, which would be about “protecting our way of life and the things we would lose if we leave”.

At Vote Leave’s Westminster HQ, Mr Duncan Smith argued that David Cameron was wrong to claim working families were better off staying in the EU and to downplay the prospects of expansion to Turkey and other countries.

"The EU, particularly for the UK, has become a force for social injustice and leaving provides a vital opportunity for us to be able to develop policies that will protect the people who often find themselves at the sharp end of global economic forces and technological change," declared the former Work and Pensions Secretary.

READ MORE: Gordon Brown calls for European blacklist of tax havens

“My plea to better-off Britons, who have done well in recent years, is to consider using their vote in the referendum to vote for a better deal for people, who haven't enjoyed the same benefits as them. Because the EU, despite its grand early intentions, has become a friend of the haves rather than the have-nots."

Earlier, the Scot used a newspaper interview to accuse the Prime Minister of allowing Germany to dictate his EU renegotiation.

He claimed Berlin had exercised "ultimate power" over what changes his Conservative colleague had sought from Brussels and was allowed to block the idea of a cap on foreign workers coming to the EU.

But No 10 insisted Mr Cameron had independently decided on a different course while Elmar Brok, the German MEP, who was one of the "sherpas'' during the renegotiation talks, accused Mr Duncan Smith of "lying to his own people," stressing that his claim was “just not true”.

Meantime, the National Institute of Economic and Social Research[NIESR] said if Britain voted to leave the EU on June 23, "the current heightened levels of uncertainty are likely to persist, if not intensify, as the UK establishes its place outside the EU".

It said this would see sterling initially fall "by around 20 per cent" and would in turn drive inflation by between two and four per cent higher than it would be if the UK had stayed in the EU.

Matthew Elliott, the chief executive of the Vote Leave campaign said: "The NIESR said we would have to rejoin the European Exchange Rate Mechanism and then claimed we would benefit if we scrapped the pound. Both of those recommendations would have resulted in disaster. They were wrong then and they are wrong now."

READ MORE: Gordon Brown calls for European blacklist of tax havens

In a separate development, Jonathan Portes, a prominent economist, claimed delivering major reductions in immigration would be "extremely difficult" if Britain left the EU.

He suggested if migration levels were able to be halved from more than 300,000 to 150,000 a year, then this would require a 2p increase in income tax to fill the financial black hole.

Elsewhere, Jeremy Corbyn the Labour leader attended the launch of the party’s short campaign to polling day and the unveiling of Labour In’s battle bus.

Also at the launch, Mr Johnson accused the Leave camp as having an “unbalanced” view of the EU that was irrational, noting: “It's an extreme view that there is absolutely nothing good about the EU at all.”

But Mr Duncan Smith hit back, accusing the former Labour home secretary of engaging in "threats" and being "ridiculous".