Economic Consequesnces of Brexit

Herewith another letter to the editor of the Sunday Telegraph. He didn’t print the last one, so lets hope for better luck with this one!

Dear Sir,

Stephen Crabb’s piece last week in which he predicted economic Armageddon if we left the EU is typical of the genre. He uncritically and selectively quotes reports by alleged experts without reproducing or testing any underlying arguments. There is no such thing as an infallible expert, and these people may well be more interested in covering their backsides than in pursuing the truth.

One thing that is near certain is that we will gain a devaluation on Brexit, just like the exit from the ERM in 1992. That delivered about 10% additional competitiveness and laid the foundations for twelve years of strong economic growth, culminating in our economy becoming the fourth largest in the world. You also reported last week that we have already gained 4% since the referendum announcement, and that the CBI is reporting an upturn in exports (although how that squares with the government’s latest report that unemployment is rising I will leave to your readers’ imagination; a useful opportunity to correct the figures?).

A 10% or more gain on devaluation is greater than on average any amount of tariffs the EU could throw at us. In other words we cannot lose, which means we do not need any new deal with the EU and that therefore the EU cannot prevent us from controlling our borders. The only uncertainty lies between gaining a little and gaining a lot.

We desperately need such an economic boost. It will not come from anywhere else. The export and import-substitution led recovery will increase demand, which will stimulate investment, which will introduce new technology, which will improve productivity, which will create economic growth, which will increase living standards. As in the 1990s it is a domino growth effect in which the first tile is now Brexit.

The truth is we cannot afford not to leave the European Union. He who dares wins.

Yours faithfully.

PS. Although the editor has again failed to publish this letter, Charles Moore, a Telegraph columnist, makes the interesting point that the US has never had a free trade agreement with either the UK or the EU. Doesn’t seem to have held them back! So I repeat, we do not need any new agreement with the EU.

PPS. I also like the cartoon from London University which I have shared on my facebook page showing a minister of George III telling the Americans they will BE STRONGER IN THE EMPIRE!  Obama’s visit, clearly scripted by Downing Street (note use of the word ‘queue’), has not gone down well.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s