When we leave the EU, we will be in a stronger position to trade with the rest of the worldby Kwasi Kwarteng / October 20, 2016 / Leave a comment
The European Union referendum, held on 23rd June, was by far the most intense election in British history. Both sides in the campaign made extravagant claims, which were fiercely contested by the other side. Vote Leave’s suggestion of an extra £350m every week for the NHS, as a consequence of “taking back our money,” has been the object of particular scorn and anger from the Remain side. Similarly, the “punishment budget,” which advocated Neville Chamberlain style fiscal retrenchment, aroused anger and incredulity on the other side.
But, despite the passionate debate, we can be reasonably confident that some accommodation will be reached.
The EU is currently Britain’s greatest trading partner, accounting for some 44 per cent of British exports. The UK constitutes a sixth of the EU’s GDP. Everyone understands that it would be counterproductive for the EU to wage a trade war with a country which represents 16 per cent of the GDP of the EU. Britain is also the second biggest net contributor to the EU’s budget, while London is its financial centre, where 80 per cent of EU sovereign debt is raised. The economies of both the EU and Britain are mutually supporting. Talk of trade wars, embargoes and tariff walls is simply hysterical, and unhelpful.