‘Leave’ campaign marshals backing from economists
25 April 2016. By Lewis Crofts.
Exiting the EU would give Britain a “better economic outcome” than remaining within the union, a group of eight economists has claimed.
The weight of economic analysis up to now has been in favor of the UK’s continued membership in the 28-nation bloc, but a group of economists backing a “Brexit” says the country is better off operating under world trade terms, not EU-specific ones.
“Economists for Brexit” will release its official position paper on April 28. Ahead of the launch, the group published its “headline views,” arguing that the UK economy would flourish and exports would become more competitive.
The group brings together eight specialists under the leadership of Professor Patrick Minford from Cardiff University and Gerard Lyons, chief economic adviser to London Mayor Boris Johnson, a prominent member of the “Leave” campaign. The other economists involved range from Roger Bootle, who writes a column for the Telegraph, to former UK Independence Party candidate Tim Congdon and Conservative politician Warwick Lightfoot.
Together, they argue that most of Britain’s trade is conducted freely under World Trade Organization rules and that this would continue after a UK exit from the EU. The group says a “Brexit” would lead to net economic gains of about 4 percent in gross domestic product.
Once outside of the EU, London would retain its position as a global center for financial services, and 75,000 fewer people would claim unemployment benefits over the next five years, the economists say.
Furthermore, the money the UK saves by no longer paying EU membership fees would make “ample funds” available for farmers, science budgets and protected industries.
The claims were made in a 3-page statement previewing publication of the group’s detailed position on Thursday.
Until now, economists at major financial institutions such as investment banks, the UK Treasury and the International Monetary Fund have been unified in warning that a “Brexit” would have a negative impact. They vary in their assessment of the magnitude of that impact.
“Economists for Brexit” claim that a “hugely competitive services sector will take the place of diminishing manufacturing output.” An 8 percent drop in consumer prices would “more than offset losses made by those now protected within the EU customs union,” Minford, the Cardiff University economist said.
Despite questions over the impact on London’s financial district, the mayor’s adviser, Lyons, argues that these “need to be kept in the context of the overwhelming dominant position that London currently holds.”
He stresses that there are risks in continued EU membership and that the government has already acknowledged its declining influence over financial-services policy and regulation.