It’s time to ditch Project Fear for Project Prosperity and embrace the Brexit boom

It’s time to ditch Project Fear for Project Prosperity and embrace the Brexit boom

What should we make of the recent research from Oxford University and the LSE that a big majority of voters, including many Remainers, now favour a so-called ‘hard Brexit’, meaning we leave the customs union and the single market?  It’s not that remain voters have changed their mind, but at heart most are democrats.  They recognise that, even though the referendum didn’t go their way, we all have to accept the result. Now voters on both sides want the country to pull together to achieve the best deal possible for the UK.

And make no mistake: leaving the single market and customs union provide huge opportunities for the UK economy.

Economists for Free Trade, a group of 16 leading economists – including myself – is calling for the UK’s Brexit pessimists to ditch Project Fear for Project Prosperity by seizing benefits that will come from leaving the EU’s protectionist bloc. By quitting both the single market and the customs union, Economists for Free Trade calculates that the UK economy will be boosted by as much as £135 billion a year, accompanied by an 8 per cent drop in prices – providing meaningful gains for families across the UK.

The customs union forces us to levy high tariffs on imports from non-EU countries. Not only does this prevent developing countries from trading their way out of poverty, it means higher food prices for hard-pressed UK consumers and higher input prices for British manufacturers. By leaving the customs union, we can choose to lower tariffs and reduce prices. Even better, we will be free to develop mutually beneficial free trade deals with some of our most important trading partners such as the US, Australia and India.

One of the problems with the single market is that its regulations apply to the whole UK economy, not just to those firms exporting to the EU. Even worse, many regulations are the result of intensive lobbying by special interest groups and big multi-nationals. Leaving the single market should not mean reducing workers’ rights or environmental protections, but allowing the UK to design regulations which work to the benefit of our own economy.

For example, we will have the freedom to cut VAT on tampons, to tax multinationals fairly (remember the European Court of Justice insisted that our Government pay back millions to big companies such as BAT) and to opt out of regulations such as the EU Ports Directive which unfairly target UK interests.

Economists for Free Trade’s calculation that Brexit could boost the UK economy by as much as £135 billion per year –about £5,000 a year to the average UK household – can only be achieved if our negotiators ensure we have a clean break from the EU.

Transitional arrangements may be helpful in some areas, for example to allow time for customs arrangements to be put in place, but our focus should be on giving ourselves the freedom to implement new trading relationship with the rest of the world as soon as possible.

Of course, we still want to trade freely with our friends in the EU.  But remember that trade deals are beneficial for both sides – we are not asking for any special favours and there should be no need for us to pay vast sums in return for a deal. The EU may choose not to agree to a deal but if so, it will be at the expense of their own consumers and firms. Indeed, given the huge trade deficit we have with the EU, leaving with no deal will hit countries such as Germany and France much more than the UK.

Brexit has the potential to bring many benefits to the UK: enhanced democracy, free trade, greater prosperity. The debate over whether we leave the EU is over. It is now time for Remainers and Brexiteers to work together to make sure that we all benefit from the Brexit boom.