Brexit economists fight own trade war
Rift opens in battle to shape tariff policy
A SCHISM is emerging among proBrexit economists over how Britain should attempt to negotiate trade deals after leaving the EU single market.
The dispute could have a major effect on the future of manufacturing and farming in the UK.
Gerard Lyons – a former economic adviser to Boris Johnson – believes Britain should maintain tariff barriers on imports in order to keep some bargaining chips when negotiating trade deals with other countries.
He also argues that the UK needs to employ transitional arrangements to protect key sectors such as manufacturing and agriculture, which could otherwise be threatened by cheap foreign competitors.
His views put him at odds with Professor Patrick Minford, his former colleague on the Economists for Brexit body and a onetime adviser to Margaret Thatcher.
Minford insists the UK should ditch external tariff barriers in order to slash the price of goods and deliver an estimated £135billion annual economic boost.
However, Lyons fears that such a ‘big bang’ approach could harm certain sectors and tie Britain’s hands when negotiating future deals.
Lyons told The Mail on Sunday: ‘The debate now is about whether you immediately go to this new framework or whether you go in a gradual way.
‘And I think given that so many things are also changing elsewhere in the UK’s policy framework it makes more sense to adopt a gradual approach, keeping tariffs in place.’
He added that Britain needs to be ‘mindful’ that adjustment could be painful.
Lyons has outlined his preference in a book co-written with fellow Brexiteer Liam Halligan, due to be published later this month.
The disagreement is likely to be highly significant for farmers and manufacturers in particular.
EU farmers are protected by relatively high tariffs, so a zero-tariff policy could see a flood of imports making life hard for those working in British agriculture.
Lyons said: ‘Having tariffs existing in place will be a useful part of future negotiations.’