Open Britain can reveal today that the International Trade Secretary Liam Fox, and his Department for International Trade, have commissioned and endorsed a book that describes in detail how economically ruinous a hard Brexit will be. The work, entitled Cloth for Wine? The Relevance of Ricardo’s Comparative Advantage in the 21st Century, is a collection of essays about the 19th Century classical economist David Ricardo. The book includes a foreword by Liam Fox himself.
The book includes an essay by LSE economist Swati Dhingra, who states that: “Under a ‘hard Brexit’ with no new deal with the EU, tariffs on UK–EU trade would rise to the level of tariffs charged to other members of the WTO and non-tariff barriers would be higher (modelled as a 6% rise for current NTBs and a 12.8% smaller reduction in future NTBs). This would translate into a 43% reduction in exports to the EU and a 3% fall in average UK incomes, compared to a no Brexit scenario.”
Open Britain has calculated that a 43% fall in UK exports to the EU would cause an annual £103bn fall in UK exports. A 3% fall in incomes would cost the average UK household £816 a year.
This comes despite Liam Fox’s repeated assurances that a ‘no-deal’ Brexit would be an acceptable outcome. In October, he said that “if we have no deal and we trade on current WTO terms, that’s the basis not only that Britain trades with countries like the United States, but that the EU trades with the rest of the world in most circumstances…so it’s not exactly a nightmare scenario.”
Commenting, Conor McGinn MP, leading supporter of Open Britain, said:
“This would be laughable if it weren’t so serious. Liam Fox tells people not to worry about a no deal Brexit while putting his name to a book that details exactly how disastrous such an outcome would be.
“Then we have the farcical situation of David Davis telling MPs he hasn’t bothered to analyse how Brexit will devastate the economy, meanwhile other Government departments are publishing books that give us all the gory details.
”The way this Government is handling Brexit has been an utter shambles, and we haven’t even got onto the really difficult bit of trade negotiations yet. Leaving the EU is going to be more complicated than anyone could have realised during the referendum, and if people feel the costs are too high then they are entitled to wonder whether the course set by the Government on Brexit is the best one for the country.”
Notes to Editors
This story is reported in the Mail on Sunday: http://www.dailymail.co.uk/news/article-5163385/Liam-Fox-red-faced-endoring-book-critical-Brexit.html
The full e-book of Cloth for Wine? The Relevance of Ricardo’s Comparative Advantage in the 21st Century can be downloaded here.
Liam Fox’s quotes on a no deal Brexit can be found here.
UK exports to the EU are £240 billion (https://fullfact.org/europe/uk-eu-trade/), a so a 43% reduction would equal a loss of £103.2 billion.
UK average household disposable income is £27,200 according to the Office for National Statistics. A 3% reduction would equal a loss of £816. (https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/nowcastinghouseholdincomeintheuk/financialyearending2017).