Euroscep­tic econ­o­mists pre­dict growth af­ter Brexit

The Sunday Telegraph - - Politics - By Ed­ward Mal­nick

BRI­TAIN could gain a £65bil­lion wind­fall from Brexit if the Chan­cel­lor seizes its “eco­nomic op­por­tu­ni­ties”, ac­cord­ing to a re­port to be pub­lished this week.

A pa­per pro­duced by a group of Euroscep­tic econ­o­mists warns that of­fi­cial forecasts are fail­ing to ques­tion “neg­a­tive” anal­y­sis of the ef­fects of Bri­tain’s de­par­ture from the Euro­pean Union that were pub­lished dur­ing last year’s ref­er­en­dum cam­paign.

In­stead, the 16-strong Econ­o­mists for Free Trade group said its own mod­el­ling, based on Brexit tak­ing place in 2020, showed that growth would im­prove, wages would rise, and unem­ploy­ment fall.

A re­sult­ing “Brexit div­i­dend” could be used to ease spend­ing on pub­lic ser­vices and im­prove the com­pet­i­tive­ness of the econ­omy through tax cuts, it added. The group said its Bud­get for Brexit re­port anal­y­sis fac­tored in “lon­grun gains” in­clud­ing a fall in prices af­ter aban­don­ing EU tar­iffs on goods from out­side of Eu­rope, “im­proved ex­port per­for­mance”, less red tape, and “an end to the an­nual EU sub­scrip­tion of £10bil­lion”. “The ef­fect of all this is to push growth up to nearly 3 per cent per an­num by the mid 2020s,” the group claims in the pa­per.

The re­port, writ­ten by Pa­trick Min­ford, a pro­fes­sor of ap­plied eco­nomics at Cardiff Univer­sity, predicts that state bor­row­ing and the ac­cu­mu­lated na- tional debt will fall to cre­ate a bud­get sur­plus by 2021. Ac­cord­ing to Prof Min­ford’s forecasts, by the end of the 2026 fi­nan­cial year Bri­tain’s ra­tio of debt to gross do­mes­tic prod­uct (GDP) will have fallen to around 55per cent, from 89per cent now. Prof Min­ford said: “We have set out a Bud­get for Brexit that would pro­vide huge tax cuts for hard work­ing peo­ple while at the same time re­duc­ing the debt to GDP ra­tio.”

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