A no deal Brexit outcome would provide more freedom than we have currentlyby Ruth Lea / September 18, 2018 / Leave a comment
Published in October 2018 issue of Prospect Magazine
The global economy has changed almost beyond recognition in recent decades and I have little doubt that the transformation will continue. According to the International Monetary Fund, the 28 countries currently part of the European Union accounted for 34 per cent of world output in 1980, but this had fallen to less than 22 per cent by 2017 and will almost certainly continue falling.
Europe’s dwindling share of global trade has come to be mirrored in the pattern of British commerce: our total exports of goods and services to the EU expanded by around 40 per cent between 2007 and 2017, but for non-EU countries the rate of expansion was twice that.
So it makes clear economic sense for the UK, as a major trading nation, to position itself to capitalise on these global changes.
The unilateral freedom to develop trade agreements with fast growing non-EU countries is a strong economic reason in itself for leaving the EU, as membership of the customs union stops us doing that. But there are other economic reasons for Brexit which are powerful in themselves. Firstly, outside the EU’s regulatory orbit the UK should be able to relieve businesses of the most irksome restrictions and give them a competitive boost. Secondly, in place of the EU’s “freedom of movement” the UK should be in a position—assuming it leaves the single market—to develop a bespoke non-discriminatory immigration policy. And, thirdly, there should be a Brexit financial dividend as the UK is currently a significant net contributor to the EU budget.