The OECD’s headline figures are based on improbable assumptions that a post-Brexit UK would initially have a less favourable trading relationship with the EU than South Korea and Mexico currently do. This is very unlikely given the costs to both the EU and the UK of such a change, and as such the OECD’s numbers should be treated with deep skepticism. However good an economic model is, if you put bad assumptions into it you will get bad results out of it.

As the OECD itself admits, the ‘EEA Option’, where Britain would leave the EU but remain in the Single Market, would likely have a negligible effect on the British economy on its own. Under this arrangement, the free movement of goods, capital, services and people would be protected, but it would free the UK from the Common Agricultural Policy, the Common Fisheries Policy and the EU’s Common External Tariff, which drives up the price of imported food, and Britain’s contributions to the EU could be cut in half.

The UK would lose its vote on new Single Market laws but would still be consulted in the drafting of relevant regulations, as Norway is now, and would have a seat at the global top table on international bodies that increasingly determine the new rules adopted by the EU, as a recent Adam Smith Institute paper has shown.

Even if it was only a transitional arrangement, the ‘EEA Option’ would take the risk out of Brexit and give Britain the best of both worlds: economic integration without political integration.

For further comments contact Flora Laven-Morris, Head of Communications, at flora@adamsmith.org | 07584 778207.