After No: The ASI Brexit Prize Entry

David Cameron famously said that he didn’t want any more banging on about Europe. The ASI feels the same way and for similar reasons: the topic threatens the unity of the party most likely to introduce policies we would welcome. Even so, after a couple of near-misses in essay competitions, most recently the IEA’s €100,000 Brexit prize, the topic seems to have become my specialised subject. One thing I’ve learnt is that those interested in the subject risk putting everyone else off with Monty Python “Judean Liberation Front”-style vehemence. So in the ASI’s entry, After No, I went for more of a “calm down, dear” approach to the most inflammatory issues. So too the winner, enabling the following compare and contrast as a reasoned contribution to an amicable debate.

1.Why leave the EU in the first place?

Almost everyone ends up talking about “sovereignty”. This mainly means intrusion into domestic law-making, in particular the “harmonisation” to European norms which is so unpopular. Also immigration, which is tricky all round. To take the last first, I argued that the UK needs to balance public hostility to immigration with labour shortages, the welfare of UK expats and the country’s humanitarian commitments. As a complication, the European Court of Human Rights prevents the UK limiting the rights of immigrants as a class but is not an EU body. So I warmed to leaving the ECHR system, replacing it with a British Bill of Rights; and accompanying this with a “public conversation” led by a Royal Commission, so as to reduce the temperature on immigration. The winning essay proposed a parliamentary “cross-party commission”. I looked at harmonisation by asking...

2.What are the UK’s trade interests?

Every sector has its evangelists so policy-makers need cool heads to develop a positive regime. The winner dwelt on trade in goods. I was struck that duties on goods have reached record lows, while the EU has failed to keep its promise on services. I see the latter as the future of trade and crucial for the UK, making me most concerned about the non-tariff measures (NTMs) which hobble them. The EU’s approach has been a wall of NTMs against the rest of the world, plus internal harmonisation with the intrusive baggage which upsets British opinion. This led me to see trade as very much calling for Plan B: and so to…

3.Which grouping suits the UK best?

This conjures up partisans for the Commonwealth, the US, (or both combined as the “Anglosphere”), and our non-EU neighbours. I took the view that all are somewhat restrictive and argued for an association open to every nation willing to abolish what’s left of duties and sign up to work away at NTMs while respecting national sovereignty. The winner also urged an “embrace of openness”, together with renewed links with non-EU neighbours in the European Free Trade Association.

4.Just how difficult will departure be?

I talked to EU insiders, who like to argue that ties are so profound as to be unbreakable. This infuriates many Euro-sceptics, provoking them into one of two diametrically opposed responses: that the UK can readily engineer a “single bill” departure; or that it can only leave after years of gradual disentanglement. My own view is that two or three parliamentary acts, a programme of interdepartmental consultations and vigorous leadership would suffice. My essay presented a timetable of proposals for organisation and legislation. The winner went for consultation and a “Great Repeal Bill”. I also argued that a decent deal with the EU is more likely than not, as its negotiators will be driven by the interests of member states who will be afraid of losing the UK market; the winner focussed on the effects of the re-imposition of EU tariffs. This takes us to the final question…

5.What about the costs and benefits of leaving the EU?

The honest answer is that no-one can know for sure. I crunched numbers for best, middle and worst cases, using the falls in output, sector-by-sector after the subprime crisis, as a template for the worst. This showed that leaving the EU would be nothing like as bad as 2008-12, with sensible policies making the country 6% better off after five years even in the worst case. In the other cases it would flourish, with greater output, stronger trade and lower inflation. The winner also calculated three cases and made policy proposals.

If the topic tickles you, take a look at the ASI’s Brexit entry here and the winner here.