Pro-Brexit economists make case for U.K. departure
LONDON–A group of economists countered claims the U.K. would be poorer if it left the European Union, a move that follows a barrage of gloomy forecasts for the British economy if voters choose to leave the bloc in a coming referendum.
In a report published Thursday, eight British economists said the U.K. economy would be better off outside the EU and could be as much as 2% larger by 2020 if it left–and as much as 4% larger after a decade. The economists likened the EU to a “walled garden” that imposes punitive tariffs and regulatory barriers on goods and services produced outside its 28 member states. Quitting the bloc would allow the U.K. to trade with the rest of the world with tariffs set by the World Trade Organization, they said.
The economy has become a key battleground in a debate over the U.K.’s future in the EU ahead of a public vote on continuing membership scheduled for June 23.
Prime Minister David Cameron, who is spearheading the campaign for Britain to remain, has made economic security a central plank of his argument, saying Britain would be better off in because of the access its membership provides to the world’s largest trading bloc. Many economists, including at the Organization for Economic Cooperation and Development and International Monetary Fund, have supported his view that leaving would damage the U.K. economy. The Paris-based OECD on Wednesday said exiting the EU would be akin to a permanent tax on British incomes.
But proponents of leaving the EU say quitting would free Britain of burdensome regulation and costs and leave it freer to deal with faster-growing parts of the world.
Patrick Minford, professor of applied economics at Cardiff University in Wales and one of the authors of Thursday’s report, said that prices on products such as food would probably fall if Britain were outside the EU because the U.K. wouldn’t be subject to the EU’s tariffs on imported goods.
“Consumers pay higher prices within the union,” Mr. Minford said at a news conference Thursday.
Roger Bootle, founder of economics consultancy Capital Economics and another of the report’s authors, added that those arguing in favor of remaining in the EU overstate the benefits of membership, especially given the bloc’s weak economic performance in recent years relative to other advanced economies.
“The EU makes some very bad economic decisions,” he said.
The group also dismissed claims that the U.K.’s huge financial sector would suffer if the U.K. quit the union. Gerard Lyons, economic adviser to mayor of London and prominent “Brexit” campaigner Boris Johnson, said London’s status as a global financial hub would be preserved thanks to the skills, knowledge and experience of those who work in it.
Campaigners who favor keeping the U.K. in the EU criticized the economists’ findings, saying they run counter to the weight of academic and institutional opinion.
Mr. Cameron’s spokeswoman said it was important to look at the weight of economic opinion on the issue. “We’re not just talking about a Treasury analysis here–we’re talking about views and assessments made by some of the leading international economic organizations like the OECD and the IMF,” she said.
The prime minister’s efforts to focus the debate on economic security were bolstered by a visit last week to the U.K. by U.S. President Barack Obama, who warned that Britain’s prospects for forging a trade agreement with the U.S. would suffer if it left the bloc.
Following the increased focus on the economy over the past couple of weeks, the public appears to have become slightly more persuaded that the U.K. may be worse off outside the EU, opinion polls suggest. Thirty-five per cent of 1,650 surveyed this week said they thought the economy would be worse off if Britain left the EU, up from 31% earlier this month, according to pollster YouGov PLC. Twenty-two per cent said they thought the economy would be better off and 27% said they thought it wouldn’t make much difference. The rest didn’t know.
Nicholas Winning contributed to this article.
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