UK hugely better off if as hopes grow that EU
the renegotiation of Mrs May’s Withdrawal Agreement.
Optimism in the Government is much higher as Mrs May enters another difficult week in Parliament.
It follows a morale boost earlier in the week when Polish foreign minister Jacek Czaputowicz broke ranks and said the controversial backstop on the Ireland/Northern Ireland border needed to be time limited.
It is understood that Czaputowicz’s comments have wider support among eastern European and Scandinavian EU members, as well as Holland.
On top of that, the German government was forced to deny that Chancellor Angela Merkel had been willing to offer a time limit concession on the backstop but ministers have taken it as a sign that the EU is cracking.
Irish prime minister Leo Varadkar was accused of panic after he admitted his country would have to put up a hard border with military and police if there is no deal.
Varadkar is coming under increasing criticism for his hardline stance on the backstop which many in Ireland believe could force a no-deal and wreak havoc on the country’s economy that sells most of its goods to Britain. A senior Cabinet minister said: “We are very confident that the EU will blink first. If you look at what has come from the Polish Government and Angela Merkel we are already seeing it happen.”
Another Cabinet minister added: “We know there is wider support for a compromise among EU member states.”
Currently, France, Ireland, European Commision President Jean Claude-Juncker and chief negotiator Michel Barnier are the main obstacles, but a Cabinet source said: “Pressure on them is mounting.”
Senior government sources have also privately said they believe comments by leading Brexiteer Tory MP Jacob Rees-Mogg and others in the European Research Group that they would back the Withdrawal Agreement with concessions from the EU is a signal for the deal to be changed and supported in Parliament.
This followed comments by Boris Johnson that removing the backstop or time-limiting it would mean Mrs May’s deal would win enough support in Parliament including the crucial votes from the 10 Northern Irish DUP MPs.
Brexiteers are concerned that an amendment put down by Labour MP Yvette Cooper with the support of Tory Remainers last week will not only block no deal but allow Parliament to stop Brexit.
Meanwhile, the economic high stakes for Britain on this week’s debate have been highlighted by new analysis by Prof Minford, who was Margaret Thatcher’s favourite economist and has a long record of correctly predicting economic trends often against the prevailing wisdom of other economists.
Prof Minford said if the UK leaves the EU with a reworked deal after a transition period ending in December 2020, the economy should get an annual boost of seven per cent a year.
On current GDP levels that would be worth about £140billion each year for the UK and could help revolutionise healthcare and public services.
This is calculated on Britain being able to do free trade deals with non-EU countries worth four per cent to GDP while prices would drop by eight per cent.
That is because exports from the rest of the world would no longer pay EU protection- ist tariffs. The ability to strip away EU regulations would also boost the economy by two per cent, according to Professor Minford.
He also calculates that ending Britain’s budget contributions to Brussels and no longer subsidising EU unskilled labour is worth 0.6 per cent and 0.2 per cent to GDP.
There would also be a bonus for people’s pockets with the least well off in the UK seeing a 15 per cent rise in their living standards.
Prof Minford has calculated that if the UK leaves on March 29 on World Trade Organisation terms with a no deal with the EU there will be a short-term boost of £500billion to the economy.
This includes accelerating the gains from Brexit by 21 months, gains from collecting tariff revenue of about £13billion annually from the EU, and not paying the £39billion divorce