Back to the real news this week, as Dominic Raab unveils the first batch of ‘technical notices’ to prepare Britain for the possibility of leaving the EU without a deal. This is a welcome development, and one which we only wish had happened earlier. The difficulties presented by a no-deal Brexit are no longer unknown, uncharted territory, and are instead being reduced to specific, solvable problems: these are far less scary.
We must hope that Raab’s sensible approach to no-deal will puncture the most inflated claims of Project Fear. It is nonetheless disappointing to see a number of journalists continue to wheel out misleading statistics and projections uncritically, such as HMRC’s dubious claim that no-deal customs costs will amount to an enormous £20 billion per annum (see, for instance, Francis Elliot in The Times, 23 August). As we have reported ad nauseum, this figure is wildly exaggerated and was produced (by the admission of HMRC’s own chief executive, Jon Thompson) by double-counting to include the costs to both UK and EU businesses. See https://briefingsforbritain.co.uk/customs-costs-post-brexit/, https://briefingsforbritain.co.uk/newsletter-june-3rd-2018/ and https://briefingsforbritain.co.uk/newsletter-to-subscribers-june-10th-2018/
The risks of a no-deal scenario have been vastly overstated, not least in the Chancellor’s letter to the Treasury Select Committee this week. He repeated the discredited Treasury prediction that a ‘no-deal’ outcome would result in a loss of 5-10% of GDP. This is based on a black-box (general equilibrium) model which is highly susceptible to the assumptions put into it. An academic study using the same model estimates that GDP losses would be two-thirds lower than the Treasury forecasts. Our own forecasts are that losses would be small and temporary: see http://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp493.pdf
This week at BfB we have been focusing on alternatives, and in particular the idea that Britain might temporarily retain membership of the European Economic Area. Advocates of this course of action suggest that the EEA would offer a better transitional arrangement than any that could be negotiated with the EU, while avoiding the dangers of a ‘cliff-edge’ no-deal exit. For more on this, see our Blogs section below.
We leave you with some light entertainment in the form of a quote from Roger Bootle of Capital Economics:
‘If only we hadn’t had the Brexit vote we could have done so much better than full employment!’
BfB in the Rheinische Post
BfB this week received a mention in a German newspaper, the Rheinische Post. The article mentions BfB as an outlier against otherwise near unanimous support for Remain amongst British scientists. It then sets out a rather unimpressive analysis of Britain’s stance on future scientific cooperation with the EU, claiming that our post-Brexit commitment to scientific funding and collaboration is uncertain.
On scientific research, it is hard to believe that the UK would seek to diminish either funding or co-operation, and indeed the government has long been vocal to this effect, providing guarantees on both funding and free movement. Any threat would come from the EU itself.
At least they got BfB right:
“In February, two academics at Cambridge University were fed up. They were outraged by the common prejudice that ‘Brexiteers’ – as Britons in favour of leaving the EU are known – have a rather low intelligence quotient. Economist Graham Gudgin and historian Robert Tombs founded the online platform ‘Briefings for Brexit’.
“On the website, academics aim to publish pieces on the advantages of leaving, thus demonstrating that smart people too are turning away from the EU.”
https://rp-online.de/politik/ausland/britische-wissenschaftler-lehnen-brexit-ab_aid-30111227 (Google translate will provide subscribers who don’t read German with an intelligible translation)
Articles providing a better guide to the UK’s stance on scientific funding and collaboration include the following (registration/paywall):
Our Blogs this week: the European Economic Area series
The European Economic Area: an alternative to a ‘bad deal’?
This week we have published two important articles dealing with the issue of the UK’s continued membership of the European Economic Area. Next March, Parliament might reject a ‘no deal’, without supporting whatever finally emerges as a ‘deal’. One way out of this impasse that has attracted much attention in political circles and the media is temporary membership of the European Economic Area, under the European Economic Area Agreement (1992). The argument is that this would provide a far better transition period.
This case was made early on and forcefully by Rupert Darwell in an article for Reaction which we reproduce here. Our second blog is written by a group of legal experts, who conclude that continued membership of the EEA is indeed an option for Britain under international law.
A brief introduction to these two pieces by the BfB Editors can be found here: https://briefingsforbritain.co.uk/the-european-economic-area-an-alternative-to-a-bad-deal/
There is a No Deal Option – It’s Called the EEA. By Rupert Darwall
Rupert was one of the first to argue that a time-limited continuation of the UK’s membership of the European Economic Area would be preferable to the Government’s proposed two-year transition period.
“In part, Eurosceptics are suspicious of the EEA as it’s seen as a glide path into the EU. Flip it around, and the EEA can serve as a smooth glide path out of the EU.”
The EEA Agreement: the key to a simplified Brexit process? The legal view
A group of eminent lawyers and academics, Sir Richard Aikens, Professor George Yarrow and Professor Guglielmo Verdirame, reach the view that the UK is currently a member of the European Economic Area and is likely to be able to continue membership if it wishes. Its treaty rights under the EEA Agreement afford the UK a considerable degree of control over the post-Brexit outcome. Continued membership can be viewed as an ‘interim measure’ that would, in one step, meet most of the Leave agenda, whilst allowing time for reflection on longer-term issues.
“The UK Government has chosen not to give Article 127 notice and, in the absence of other actions, the UK will remain a party to the EEAA following Brexit… The UK should make it clear that it will reserve its rights under the EEAA and seek international dispute resolution if necessary.”
Also on the website this week
WTO terms will reduce barriers to world trade and cut prices by Martin Howe QC
Over recent weeks the media have been full of lurid scare stories about what will happen if the UK leaves the EU on WTO terms. In this article, reproduced from BrexitCentral. Martin Howe QC argues that these scare stories are wrong. He concludes that the positive advantages of leaving the EU without a trade agreement and without a withdrawal or transition agreement are enormous.
This is a must-read to understand the current debate over tariffs in a no-deal scenario.
“I shall call this ‘the tariff delusion’: that when we leave the EU, WTO rules will require the UK to keep the EU’s current tariffs and impose them on imports from the EU, as well from the rest of the world. That delusion is simply not true... We will be fully free to charge lower tariffs or zero tariffs, if we feel fit.”
This is a summary of Howe’s full report, which can be found on our Reports pages: https://briefingsforbritain.co.uk/pulling-down-the-barriers-to-world-trade/
The Subscribers’ Views page on the website allows subscribers to submit their own articles. Submissions welcome.
We are also on Twitter at https://twitter.com/briefing4brexit, posting articles and retweeting the daily events that bring Brexit to the fore in the national news.
We were recently retweeted by Rupert Matthews MEP, who praised our blog ‘Lessons For Brexit from the Hanseatic League’ by Lee Rotherham: “As Chairman of Projekt Hansa, I agree completely with @DrBrexit here. https://projekthansa.org. ”
Discussion continues on Facebook too, with a particularly enthusiastic response to Dr Bob Edwards’s ‘Lies, Damned Lies and 112 Constituencies’ story. Hugh Willoughby helpfully points to other polling data which claims that it is Remainers, not Brexiteers, who have changed their mind in the greatest numbers: ‘3.1million Remain voters now back Brexit according to the Telegraph’. Yet more reason why Remainers should not be pinning their hopes on a second referendum.
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An Oxbridge PhD Student
Dr Graham Gudgin
Economist, Centre for Business Research, Judge Business School University of Cambridge
Professor Robert Tombs
Emeritus Professor of French History, University of Cambridge