- All major parties acknowledge that achieving sustained economic growth is key to the country’s success but disagree on how to achieve it
- The Government is seeking a new deal with the EU, with the Prime Minister talking of resetting relationships at the recent European Political Community conferenceIn some quarters, Brexit is still blamed for recent growth woes, despite evidence to the contrary. A new briefing by leading economist Dr Gerard Lyons argues that rejoining the EU, its Single Market, or Customs Union would not provide a solution to our growth challenge
- Instead, the briefing argues that the major challenges facing the UK are deep-rooted, have long predated Brexit and solutions are not reliant on being in the EU. The UK has had an investment shortfall since the 1970s, a trade deficit problem since the mid-1980s, and regional and other imbalances have persisted for some time, too
The Labour government may be seeking a ‘reset’ of relations in the UK-EU relationship but Keir Starmer should resist calls to rejoin the EU, Single Market, or Customs Union, according to a leading economist.
‘Why the EU is Not the Answer to Britain’s Growth Challenge’ by Dr Gerard Lyons, Research Fellow at the Centre for Policy Studies, argues that Britain’s growth problems existed before Brexit and that leaving the European Union gives us more flexibility to pursue trade deals and improve regulations in a way that can boost growth.
Single Market or Customs Union membership is repeatedly floated as a ‘solution’ to Britain’s growth challenges, on the basis of questionable statistics, dodgy economic counterfactuals and misleading international comparisons. The briefing highlights how the anti-Brexit narrative has changed from economic catastrophe to ‘slow puncture’ as disaster has failed to materialise – and calls for any decisions about the UK’s future relationship with the EU to be based on current realities, not poorly constructed hypothetical scenarios.
This is not to say that leaving the EU has had no effect but, Lyons argues, Brexit was a political event aimed at retuning control to Westminster. In economic and financial terms, it would be a process with the benefits accruing over time – as a ‘Nike swoosh’ – as long as it was accompanied by sensible policies. Despite the failure to implement many of those policies, the briefing argues that potential for such a sustained uptick is still there.
Dr Gerard Lyons, CPS Research Fellow and the author of the briefing note, said:
‘Labour seems to have recognised that growth is key to Britain’s economic future and have announced a number of policies to try and deliver it.
‘Unfortunately, there are many voices falsely claiming that rejoining the EU, its Single Market, or the Customs Union would help tackle Britain’s growth woes. This is based on a misunderstanding of our underlying growth issues and unreliable, unhelpful counterfactuals about what may or may not have happened if we had remained in the EU.
‘That is not the situation we find ourselves in. Britain voted to leave and we need to take full advantage of the trade and regulatory opportunities that are now available to us. Our future relationship with the EU must be based on an accurate assessment of the current situation, not wishful thinking.’
ENDS
NOTES TO EDITORS
- Dr Gerard Lyons is an economist and Research Fellow at the Centre for Policy Studies
- ‘Why the EU is Not the Answer to Britain’s Growth Challenge’ is available to download under embargo here
- For further information and media requests, please contact Emma Revell, External Affairs Director, on 07931 698246 or [email protected]
The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, business, welfare, education, housing and green growth, its goal is to develop policies that widen enterprise, ownership and opportunity
Date Added: Monday 5th August 2024
