No-deal Brexit will give UK an £80billion bonus say economists
JACOB Rees-Mogg will tomorrow launch a study showing Britain could get an extra £80billion for tax cuts and public spending by quitting the EU without a deal.
The senior Tory MP is to give his backing to research by a group of economists detailing how the UK could be better off trading under World Trade Organisation terms than under Theresa May’s Chequers plan for a deal with Brussels.
Increased economic growth, achieved by slashing regulation and boosting trade with countries around the world, will deliver the huge Brexit dividend, the report will argue.
Economists for Free Trade, a group of Eurosceptic academics who support a full break with the EU, has estimated that the Treasury could benefit from an extra £80billion in revenue over the next 15 years as a result of a no-deal departure from the EU.
The group’s report, to be unveiled tomorrow, has been backed by the European Research Group of Tory MPs chaired by Mr Rees-Mogg.
A world trade deal under World Trade Organisation rules would boost the UK’s trade with the rest of the world – including Europe – reduce domestic prices and boost investment, says the report, A World Trade Deal: The Complete Guide.
Surplus
The report’s authors say that – because of the large EU trade surplus with the UK – if the EU insisted on slapping WTO tariffs on British exports and Britain responded in kind, the overall effect would amount to a staggering £13billion a year boost to UK revenues on top of the expected £80billion windfall from increased growth.
Mr Rees-Mogg said: “Over the last 25 years exports to the EU from the four leading non-EU states have grown four times faster than exports from the UK under the single market.
“This fact alone shows why we have nothing to fear from trading on WTO terms. It has succeeded in the past and offers exciting opportunities for the future. Let Brexit mean Brexit and let us flourish under WTO auspices.”
Mr Rees-Mogg will launch the report in the Commons on Tuesday alongside Economists for Free Trade chairman Professor Patrick Minford and lawyer Martin Howe QC.
The report also dismisses “hysteria” over alleged shortages of food and medicine raised by some opponents of a full break with Brussels.
It points out that imposing non-tariff barriers to trade are illegal under WTO rules.
“Armageddon-style predictions that the EU would freeze out British goods by refusing to recognise them as complying with EU standards in breach of WTO rules, and in a worse way than it treats any other non-EU country, are simply not realistic,” the report says.
European Commission statements contain large amounts of political posturing and should not be taken seriously, it adds.
The report goes on to argue that the Prime Minister’s preferred solution, the Chequers proposals agreed by the Cabinet in July, has met widespread opposition from MPs and voters as well as being opposed by the EU. It concludes that the best way of delivering a “clean Brexit” is to leave under a deal covered by WTO rules.
The report is being issued after publication of an alternative blueprint to the Chequers plan was put on hold by the European Research Group.
Plans to launch the blueprint, which includes a call for the £39billion divorce fee due to be paid to Brussels to be scrapped in favour of a “Brexit dividend tax cut”, this week were dropped after disagreements about how much detail to include.