At long last, the penny seems to have dropped with Chancellor Philip Hammond. The headline of his Budget message was that we need to “seize the opportunities” of Brexit. Hallelujah!
The solid economic performance of the UK economy since the EU referendum has proved an embarrassment to Treasury forecasters. Before the referendum, they confidently promised an immediate recession and big rise in unemployment. Instead we have seen solid (if not spectacular) growth, over 300,000 additional jobs and a net increase in the number of businesses.
For the past 18 months, the Chancellor has seemed determined to continue with ‘Project Fear’, focusing solely on the economic risks of Brexit and ignoring potential upsides. Although there is a long way to go, the indications in the Budget that Mr Hammond is at least now thinking about the possible upside to Brexit are welcome.
And let’s be clear: although there are risks from leaving a large trading bloc such as the EU, they are far outweighed by the potential benefits. Free from EU protectionism, the UK will regain the ability to cut tariffs on goods from outside the EU. On average, tariffs are generally low, but when it comes to food and clothing, the EU forces the UK to levy very high rates, in some cases well in excess of 20% on non-EU imports. These may well help to protect continental producers, but at the cost of high prices for UK consumers – as well as making it harder for developing countries to trade their way out of poverty.
To read David Paton’s piece for BrexitCentral in full, click here.