The Brexiteers’ economic case has taken a real kicking in the last few weeks. The International Monetary Fund, the Treasury, the OECD, the London School of Economics and President Barack Obama have all put the boot in.
So it might come as a surprise that Economists for Brexit (EfB), in a report released on Thursday, has declared that quitting the EU would see us better off by 4% of GDP. The problem is that the group’s prediction of huge economic gains relies on the UK removing all tariffs on imports and slashing regulation. We are unlikely to do either of these things.
The report says that EU social legislation, like rules on working time and gender equality, drags down the British economy. The working time directive is not a good piece of legislation. Britain has negotiated opt-outs from its most damaging aspects, but it seems fair to argue that it still presents a cost to us.
However, that doesn’t mean we would expunge all traces of it from our legal system post-Brexit. British rules guarantee an additional eight days leave on top of the requirements of the directive, a costly add-on of our own devising. That we have made no move to scrap the entitlement is a sure sign that it would be tough to sell shorter holidays to British voters. Attempts to remove protection against discrimination could also prove unpopular.
Trying to create a zero tariff regime would certainly be controversial. The recent outcry over the decimation of Britain’s steel industry underlines how strongly the people of Britain – the crucible of the Industrial Revolution – and their politicians are attached to manufacturing. Abolishing tariffs would expose British industry to intense competition. Yet Patrick Minford, an economics professor at Cardiff University and a member of EfB, has said we shouldn’t worry about the prospect of eliminating British manufacturing.
Finally, the report criticises single market rules for being a “one-size-fits-all regulatory regime”. In fact, the rulebook makes it easier for UK businesses to sell into the EU. Leaving the bloc and adopting different product standards would make trade with our closest neighbours more expensive. The report also says the single market covers agriculture and manufactured products, but does little for services. This is clearly wrong, as EU initiatives like the passport for financial services illustrate. Why else would bank bosses be warning of an exodus of jobs from the City of London if access to the single market was worthless?
The EfB’s statement that we “already sell all our non-EU exports and all our exports of services around the world under WTO [World Trade Organisation] rules” is flatly wrong. Via the EU, we have free trade deals, which improve on WTO rules, with over 50 other countries.
The EU’s mooted visa deal with Turkey may well “add fuel to the debate” about “the ability of a country to control its own borders”, but omitting to mention that the agreement doesn’t apply to the UK is a regrettable oversight.
Saying that immigration cost taxpayers £100 billion from 1995-2011 is one thing. But the report fails to add that the research from which this figure is derived shows that immigrants from the European Economic Area actually made a positive contribution to the government’s finances.
The Economists for Brexit report makes strong assumptions. By doing so, it concludes that EU membership has damaged the British economy and that Brexit would boost growth. We disagree.