‘Brexit will boost our economy and cut the cost of BMWs and even brie’

PROJECT FEAR wants us to believe that coming out of the EU could be

disastrous for UK trade. Here, a renowned economist gives an alternative

view . . .

IT wasn’t so long ago that Britain was a nation that traded freely across the

world.

Be it cars, a bottle of milk or a service such as marketing or finance, there

were no barriers to where our exports ended up and certainly no extra taxes

on imported goods.

Brexit would allow the UK to join the global market as a free trading nation,

able to buy goods from across the world — and at cheaper world prices, too.

Why pay more when you can pay less?

When the UK joined the EU in the Seventies our economy was struggling and

signing up to a level of protection on goods seemed the right thing to do.

Now we live in a different time. The EU has become more centralised and

controlling, raising prices in agriculture and manufacturing by around ten

per cent.

Goods are protected in these industries so mozzarella from the Italian coastal

region of Campania, Italy, or a slice of French brie that has been imported

to the UK, have an added tax stamped on them. EU farmers are able to sell

their foods at higher prices.

However, these trading barriers create a wedge between prices on the world

market and what Brits fork out for their weekly shop.

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By remaining in the EU, Brits have to pay above standard global prices for

goods that come from agriculture and manufacturing.

But would we continue to put up with these high prices if we left the EU? I

don’t think so.

We’d stop listening to French farmers and instead the UK would help struggling

farmers in our own country stand on their own two feet while protecting our

beautiful rural environment in different ways.

Prices would fall by up to eight per cent

This will not only cost George Osborne and the British economy much less than

the current Common Agricultural Policy, it will keep food prices low.

If we decided to leave, the UK would simply revert back to paying world prices

for exports and imports.

Prices of goods would fall by up to eight per cent.

The cost of a BMW or the price tag of an imported fridge would suddenly drop

and our resources would shift from manufacturing to services — raising

living standards for all of us.

More importantly, our economy would be boosted by four per cent.

A huge 70 per cent of current UK trade is in goods exported outside the EU and

in services such as advertising, law and education, where there is no

interference from the EU. The world governs the value, and services such as

PR fetch a price that a business is willing to pay.

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This country is no longer one that specialises in farming or building. We now

trade in skills more than we do in things.

We have excellent designers, highly skilled intellectuals and we specialise in

ideas that are then sent to South America or parts of Asia to be made.

Over time, if we left the EU, it seems likely that we would mostly

eliminate manufacturing, leaving mainly industries such as design, marketing

and hi-tech. But this shouldn’t scare us.

Britain is good at putting on a suit and selling to other nations.

Around half of young adults now go to university, ending up in professions

such as finance or law, while the making of things such as car parts or

carpentry has hugely shrunk — but there will always be jobs for people

without sophisticated skills.

Of course leaving the EU will be difficult, and something that needs careful

negotiation, but we must completely withdraw to gain these benefits.

Naturally, however, it will be unpopular with powerful industries which

currently benefit from protection. Many of these have already been vocal and

it is important for us to help these industries adjust if we do decide to

leave.

It will also be unpopular with foreign industries selling us goods at higher

than world prices — but woe betide the company that tries to persuade the

British people to part with such a fall in the cost of living. We need to

negotiate a transition period which allows both groups to get use to the

change.

The big problem with this entire debate is that people talk about the EU as a

wonderful thing for the UK — but that is such a terrible misrepresentation.

It is time for Britain to focus on our services and design skills, to start

producing more of what we’re good at.

It is time we embraced trade on a global market completely. Brexit is the best

outcome for us as a nation.

– Patrick Minford is Professor of Applied Economics of Cardiff Business School.