John Redwood: Brexit is an important political event but not an important economic event
Brexit is an important political event but not an important economic event
The opponents of Brexit who are still out to stop or dilute it seem to see Brexit as some big economic event. It is difficult to see why.
They concentrate on trade. There is no evidence that joining the EEC or completing the single market did anything to boost UK growth so it is difficult to see how leaving it will do the opposite. Our trade with the rest of the world handled with tariffs under WTO rules is continuing to expand more rapidly than our trade with the EU. The figures quoted for the proportion of our goods and food trade that is with the EU fail to point out it is far more imports than exports.
I predict that you will not see the impact of Brexit on world growth or world trade figures after we have left. If there are tariffs we may import more food from non EU sources and less from the rest of the EU but not much else will change. We will certainly grow more of our own if the EU insists on tariff barriers.
It is also likely the EU will want tariff free when they think they have wrestled as much cash as possible from the UK government in search of a deal. The big win economically for the UK will be saving the money we send them. The more we delay taking control of our own money, the more we delay getting the benefit. The win is a double one, as it will lead to a sharp improvement in our balance of payments when we cancel the contributions, as well as giving us money to spend at home on our own priorities.
I assume the briefings that the UK government is offering E60bn of divorce settlement is disinformation. There is no way the public will accept that, and unlikely the UK government would have offered anything firm just to hold talks that the EU is going to hold anyway.
I see we are now going to train more nurses at home instead of expecting to bring in more EU nurses after we have left. All EU nurses currently here are of course welcome and can stay as valued members of our society, but it must be a good idea to train more of our own and work away at reducing unemployment further.
Those who say non tariff barriers and delays at borders are issues under WTO procedures are out of date. In February this year the new Facilitation of Trade Agreement by the WTO came into force which will work well.
For The Daily Reckoning
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