Downer wrote the foreword for a new report released Monday morning by UK think tank Policy Exchange - where he will be chairman after his term as high commissioner ends. The paper argued the case for unilaterally dropping tariffs, and used Australia as an example of why it would benefit the UK. Alexander Downer has angered UK's Brexit foes. Credit:Penny Bradfield “Not only the Policy Exchange Paper - which is published today - but Australia’s experience going right back to the mid 1980s is actually that if you unilaterally reduce your tariffs it has a substantial and very positive effect on your economy,” Downer told the BBC. “It reduces the price of imports - and imports which have tariffs on them are typically food, clothing, footwear, where low income people spend a disproportionately high share of their income.

“It’s a progressive measure that helps low income people more than high income people.” The paper argued against a position held by the Chancellor of the Exchequer Philip Hammond. In December, during a Treasury committee hearing, Hammond told arch-Brexiteer Jacob Rees-Mogg that unilaterally removing tariffs on imports “might make negotiating free-trade agreements rather difficult”. Though it would help consumers in the short term by reducing the cost of imported goods, it could also threaten jobs, Hammond said. MacShane referred to recent surveys and reports that showed London and the UK already had a lower cost of living – and groceries – than Australia, saying the BBC interviewer should have done “a little research... to challenge the blathering nonsense from anti-EU Oz High Commissioner”.

Groceries already cost less in Britain than Australia. Credit:Bloomberg The Numbeo site, which tracks global prices through surveys, found groceries are 30 per cent more expensive in Australia than the UK, and most clothing (with the exception of jeans) is also pricier. The most recent Economist cost of living rankings had Melbourne and Sydney - but not London - in the top 15 most expensive. MacShane said being inside the EU already allowed UK firms unfettered access to a giant market of 450 million consumers. “If cutting trade links with Europe helps Britain to export more why does Germany export five times as much to China as the UK?” he said. “Mr Downer is correct to promote open and free trade and Australia and New Zealand were right to free up their economies in the 1980s and 1990s… (But) other countries would like to unload their giant agro-industry surpluses. That would spell the end of British farming and horticulture.” The Policy Exchange paper accepted that unilaterally cutting tariffs would hurt domestic manufacturing and agriculture but “the British economy does not have to produce its own food, cars or textiles to be a success”.

It pointed out that Australia, which now has among the lowest average tariffs of any major economy, has grown without interruption for 26 years and “while trade liberalisation is not the only reason for the strength of the Australian economy it clearly has not held it back”. Loading An Australian Trade and Investment Commission analysis published in 2017 found that Australia’s impressive performance over the past two and half decades was due to a wide range of factors including economic reforms, strategic location in the booming Asian region, and strong population growth. Last July Policy Exchange announced that Downer will be its chairman of trustees once he steps down as high commissioner. His replacement George Brandis is due some time in the next few months. “I think (Downer) did Australia no service at all by so blatantly interfering in a bitter divisive UK political debate while still in post as High Commissioner,” MacShane said. “When he retires to go off to be president of one of the right-wing anti-European think tanks in London he can do, say what he likes but lining up with the hardline isolationists in the Brexit debate is very ill-advised.