BRITAIN would benefit from “some £651billion in all” if Theresa May was to walk away from the negotiating table and quit the European Union with no deal – handing Brussels devastating financial loses, according to a leading economist.
Professor Patrick Minford, who is Margaret Thatcher’s former economic advisor, spelled out how the UK would reap the rewards by refusing to sign a withdrawal agreement with the EU, insisting the bloc faces a “grim picture” of a “no trade deal” scenario.
In his latest economic report, titled ‘The Economics of Brexit: Getting the Best Deal for the UK’, Professor Minford stresses “it could not be more open and shut who leasts wants a breakdown” of negotiations.
The Brexiteer economist admits there “would be a short term nuisance” for the UK if it was to walk away without a deal but the disadvantages are outweighed by the “substantial economic gain”.
However, his predictions couldn’t be more opposite for the EU, which would face “both a short term nuisance and a substantial economic loss”.
Professor Minford’s report said: “It would seem that overall the breakdown of talks would be positive for the UK to the tune of a one-off gain of £38bn on the EU budget, plus £180bn from bringing forward the non-budgetary Brexit gains, plus £433bn from the EU tariff revenue, some £651bn in all.”
Breaking down the figures, the economist suggests trade tariffs “on both sides would be paid by the EU”.
He adds: “The UK tariffs by EU producers to the UK Treasury, the EU tariffs by EU consumers: of course, the EU would receive the tariff revenue from its own consumers, making its overall loss equal to the UK tariff revenue – estimated at approximately £13 billion per annum.”
But the results would not be so glamorous from the EU’s point of view, according to the economist, who using the same theory predicts a “£507bn” loss.
Professor Minford said: “For the EU, it would mean a one-off loss of £38bn in financial settlement, plus another one-off loss of £36bn in terms of trade gain, plus the permanent loss due to paying UK tariff revenue of some £13bn a year which at a three per cent discount rate would be equivalent to a one-off loss of £433bn.
“So plus £651 billion for the UK versus minus £507bn for the EU: it could not be more open and shut who least wants a breakdown.
“For the UK a breakdown would be a short term nuisance but a substantial economic gain; for the EU it is both a short term nuisance and a substantial economic loss.”
He did, however, admit the “EU loses imply that it is not on the table” as an option for either Westminster or Brussels to stop short of signing a deal.
Analysing other potential Brexit outcomes, Professor Minford said “both sides would gain from a Canada plus deal”.
“This would be a programme that would rightly generate huge excitement about the future of the economy and living standards.
“It would put behind us the period of depressing ‘austerity’ and usher in an optimistic scenario for the UK as a pioneer once more of open and free markets around the world.”
You can read the Daily Express’s full report here.