With Theresa May's Withdrawal Agreement unlikely to pass through Parliament, a 'no-deal' Brexit is looking increasingly likely - and we need to be prepared.
What is it that politicians have to fear from the event of a 'no-deal' Brexit? If anything, I believe that it is an opportunity for Britain to prosper. Politico columnist Shanker Singham suggests that Brussels has more to lose from a 'no-deal.' Firstly, EU services would suffer as a result of not being able to access UK markets without a comprehensive free trade deal. This would cause capital costs to increase and investment deals are likely to significantly dry up.
The Legatum Institute estimates that if the EU does not provide the UK with a free trade deal, the EU automotive industry would lose between two to seven billion euros in annual revenues. The beef and dairy industries in Ireland could see an export decline between 34 to 50% and 23 to 42% respectively. The UK, however, is thought likely to benefit from the event of 'no-deal.' Professor Patrick Minford, chair of Economists for Free Trade, estimates leaving the EU would provide a £135 billion boost to the economy or 7% of GDP. This would be brought about by a reduction in the cost of imports from outside the EU - from a reduction in the cost of tariff barriers - and by pursuing free trade agreements with non-EU economies.
In the event of a no deal, the UK Government will need to cut taxes to make the country more competitive. Graham Gudgin and Robert Tombs at Prospect suggest realistic economic modelling should incorporate sensible policy responses to a weaker currency, and these include cutting VAT and import tariffs to halt price rises from a weaker pound. Corporate tax would also need to be reduced to offset trade frictions and attract foreign investment.
A proper Brexit could be a great long-term opportunity for this country, and MPs need to deliver on the will of the people. It's time that those who govern over us had the same confidence in our abilities as we have in ourselves.
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