Author Ben Leonard
In what looks like the first good Brexit news in a few months, a group of pro-Brexit economists have predicted that leaving the European Union could add as much as £135bn per year to the British economy.
The Economists for Free Trade (EFT), formerly known as Economists for Brexit, have calculated that a ‘hard Brexit’ could lead to national output increasing drastically, in the region of around £5,000 per household. The group also called for the removal of trade tariffs and barriers.
From Project Fear to Project Prosperity with the British Economy
The EFT is due to publish their report – From Project Fear to Project Prosperity – later in the year. In it, the EFT is expected to detail how the UK could unilaterally eliminate trade barriers for the EU and the rest of the world. Then, they would be expected to be able to gain trade deals worth £80bn a year.
The report will also predict that the British economy could gain a further £40bn per year by deregulating the economy, in addition to other Brexit-related policies.
The EFT is headed up by Professor Patrick Minford, a former advisor to the treasury and now a professor of economics at Cardiff University. He went on record as saying “Hard Brexit is good for the UK economically while soft Brexit leaves us as badly off as before…hard is economically much superior to soft,”
The EFT is also made up of Roger Bootle, of the independent macro economics research thinktank Capital Economics, and David Blake, a professor of economics at Cass Business School. They say that if the UK cannot make new trade agreements with the EU and other countries, then trade barriers and tariffs should be eliminated, in order to benefit from such gains.
The EFT has argued that doing this would put a great deal of pressure on the EU to agree to a deal with the UK, after it becomes “flooded” with cheaper goods from non-EU countries, such as China.
Minford said it would be
“A strong incentive for the EU to do a trade deal with us – which is what we want politically”.
Take with a pinch of salt
However, this news must be taken with a pinch of salt, according to some economists. Economics professors from the London School of Economics labelled Brexit forecasts from the group “really far-fetched” and “crazy”. They added that Professor Patrick Minford “misunderstands the nature of regulations and product standards,”
Other major economists have echoed these thoughts. Economist Monique Ebell, who works at the National Institute of Social and Economic Research (NIESR) said that Professor Minford “ignores decades of evidence on how trade actually works”.
Indeed, Ms Ebell’s own research was found to demonstrate that if the UK were in fact to leave the single market, and made unilateral trade deals with major developing economies, the British economy would only regain around a third of the 20-30% reduction in lost total trade.