Theresa May should speed up preparations for Britain to revert to a World Trade Deal under WTO rules if Brussels refuses a free trade deal, according to some 60 economists, business people and leading politicians, who have written to her ahead of the EU summit later this week.
They call upon her to take an “assertive” approach at the crunch EU Council meeting in Brussels and to reaffirm that “no deal is better than a bad deal”.
The letter, organised by Economists for Free Trade (EFT), is backed by more than twenty Conservative MPs and Lords – including four former cabinet ministers.
It accuses EU negotiators of intransigence in the Brexit talks and calls on the Prime Minister to strengthen her negotiating hand by accelerating UK preparations for a World Trade Deal. Such a step would mean that Britain would be ready to walk away from the table if the EU continues to frustrate efforts to secure a free trade agreement.
The letter is signed by more than 20 senior Brexit-supporting politicians, including former Chancellor Lord Lawson and former Cabinet ministers Owen Paterson, David Jones and John Redwood. Other signatories include more than 20 economists and around a dozen businessmen such as Tim Martin, Sir Rocco Forte, John Mills and John Longworth.
The letter advises the Prime Minister that: “… to have any real leverage in the Brexit endgame, the UK must reserve the right to walk away without a trade deal and take with it the £39 billion it has offered to pay as part of a divorce settlement. This money covering the final years of the EU budget settlement must be contingent on our securing a satisfactory free trade deal. No trade deal, no money.
“In addition to the £39 billon that the EU desperately needs to fill the hole in its budget, you have many things going for you. In spite of the doom-mongers, the UK economy is in rude health. The world is desperate for the UK to once again take up leadership for global free trade and free trade deals are on offer from our major trading partners.”
The letter attacks relentlessly gloomy and erroneous predictions by Whitehall economists and the Civil Service and sets out why the UK has nothing to fear from a World Trade Deal:
“Our analysis, in contrast to the gloomy and erroneous forecasts produced by the Civil Service Cross-Whitehall report, is that the UK would be £140 billion better off over the next 15 years under a World Trade Deal governed by WTO rules.
“The gains stem from a fall in prices after scrapping the EU tariff barriers against the rest of the world, higher exports, an end to our annual £10 billion net subscription to the EU, reduced red tape and an end to taxpayer subsidies to unskilled migrants from the EU. And, as the report we sent you last weekend demonstrates, we can be ready to leave without a trade deal by next March.”
The letter argues that such a World Trade Deal “would give the Chancellor ample scope to increase spending on priority public services such as the NHS while reducing the too high UK tax burden.”
Click here to read a full copy of our letter to the Prime Minister.