REBOOTING BRITAIN: Cut corporation tax to ZERO, scrap agricultural subsidies and start fishing like Icelanders

For further comments or to arrange an interview, contact Flora Laven-Morris, Head of Communications, at flora@adamsmith.org | 07584 778207.

Brexit is a real chance to reboot Britain, says a new report released today by economic think tank the Adam Smith Institute.

The report, “Rebooting Britain: making the most of Brexit”, authored by the Institute’s President Dr Madsen Pirie, sets out an agenda through which the UK could solve many of its long-standing problems.
 
The report runs through major policy areas, from housing and pensions to drugs and unemployment, highlighting the changes that should be made in this new political climate - many of which were previously impossible due to Britain’s membership of the EU, or are now necessary to make the most of Brexit.

Among the most important recommendations is the phasing out of Corporation Tax.  "There is a false belief," says the report, "that this is paid by companies, but it is not. It is paid by the employees of companies, by their customers, and by their shareholders." The government should first cut it to 12.5% to match the rate charged by Ireland, which achieved great success at attracting investment, then to 6.25% and finally to zero. This would deliver a real boost to economic growth post-Brexit.
 
Dr Pirie argues that the UK should use its newfound freedom over immigration policy to attract more skilled and talented immigrants from across the globe, as well as those people willing to invest in creating businesses and jobs. It is also called for Britain to stop classifying foreign students in the UK as immigrants.
 
Controversially, the paper calls for a New Zealand style abolition of agricultural subsidies once Britain is out of the Common Agricultural Policy. In 1984, subsidies accounted for 34% of the total value of New Zealand’s agricultural production. These were cut to 2% within ten years, but far from suffering, Kiwi farmers responded to world markets and became among the most efficient in the world – indeed, agricultural productivity growth doubled. British farmers could do the same, says the ASI report.

Brexit also allows the UK to reassert control over its fishing waters and to ditch the flawed EU policies which currently result in thousands of tons of fish being destroyed. Britain’s fishing policy should be modeled on an Icelandic style conservation policy that sets annual quotas for each vessel, quotas which can be traded. This would give UK fishermen an incentive to conserve stocks with the same success that Iceland has seen.
 
The new report also examines such areas as housing, education, pensions, drug legalisation and employment, and suggests ways in which current policies could be rebooted with clear-sighted solutions that address the problems directly instead of tinkering at the edges. 

Dr Madsen Pirie, author of the report, said:

“There are many features of modern Britain that are simply inadequate to serve its needs today. Some have been allowed to continue with occasional tinkering at the edges when a comprehensive overhaul would be more appropriate, and some have not been tackled because of our membership of the EU and the obligation to accept its rules over our own national interest.

"The decision to leave the EU presents the opportunity to abandon the politics of drift and muddle, and to take confident steps to create the kind of country we want ourselves and our children to live in."

-ENDS-
 
Notes to editors:

For further comments or to arrange an interview, contact Flora Laven-Morris, Head of Communications, at flora@adamsmith.org | 07584 778207.

To report ‘Rebooting Britain - making the most of Brexit’’ will be live on the Adam Smith Institute website from 09:00 20th July 2016 and can be accessed ahead of time here. 

The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Sam Bowman calls for a clear Brexit strategy on Sky News

Sam Bowman, Executive Director of the Adam Smith Institute, appeared on Sky News this morning calling for a clear Brexit plan before invoking Article 50. Promoting the benefits of the EEA option Sam noted:

"The real emergency here is to get a plan on the table...what we should be looking for is a soft transitionary period of five to ten years where we remain in the European Economic Area, in the Single Market, leave the European Union, perhaps slightly modify Freedom of Movement, and use that time to agree a truly British deal where we have as much access to the Single Market as possible but do bring in those restrictions to Freedom of Movement that people want."

Sam Bowman discusses staying in the Single Market on BBC Sunday Politics London

Executive Director of the Adam Smith Institute, Sam Bowman, appeared on BBC Sunday Politics London alongside economist Ruth Lea to discuss staying in the Single Market following the Brexit result.

ASI makes the case for the EEA option in wake of historic Brexit vote

As the conversation turns to what Brexit will look like, the Adam Smith Institute has continued to make the case for the EEA option across the national media.

The Sunday Times reported:

Many experts say that Brits already living in Europe will be able to stay under the Vienna Convention on 1969, which gives expats acquired rights. In the future expats may have to apply for a visa to live on the Continent, depending on the outcome of the exit negotiations, and this may vary from country to country.

It is nevertheless likely that the EU would offer Britain a deal to stay in the European Economic Area (EEA), according to the Adam Smith Institute. If this were the case, some say it would be business as usual for expats.  

The Sunday Telegraph reported:

Sam Bowman, executive director of the Adam Smith Institute, says it is right that Cameron waits before starting the official process of withdrawal.

“We’ve just seen one of the biggest political earthquakes in modern British history. The important thing now is to wait for things to calm down, take some time to take stock of where we are and where we want to be, and do everything we can to avoid major shocks to the economy as we leave.”

The Financial Times reported:

The rest of the EU would no doubt be satisfied with a Norway-style arrangement, but this only looks realistic as a way station while looser relations are worked out, as proposed by the Adam Smith Institute. And as an explicitly temporary solution, it is the least stabalising arrangement that might  - just might - be acceptable on both sides.

In another FT article: 

Some proponents of Brexit, such as Daniel Hannan MEP and the Adam Smith Institute, a think-tank, have advocated joining the EEA or agreeing bilateral trade deals similar to the one Switzerland has struck with the EU.

The Daily Express reported:

The think-tank's Executive Director, Sam Bowman, last night said: "This is a vote for Britain to open up to the world. "However it is clear that markets have taken a severe hit, much of which is down to uncertainty about what will happen next.

"It is crucial that the UK does not leave the Single Market even as it leaves the EU, in order to reassure markets and avoid a major economic shock. This option will take the economic risk out of leaving and avoid most of the economic losses that Remainers warned leaving would entail. Staying in the Single Market for a period of five to ten years would give the UK the time it needs to properly disengage from Europe as a process, not a one-off event."

I News reported:

It is very likely that we will follow a very pragmatic of 'liberal leave' process, and so we should. This takes Brexit as a multistage process that firstly sees Britain exit EU membership while maintaining Single Market participation. Such a halfway house would put us in the European Economic Area (EEA), like Iceland or Norway. That lessens the economic risk of exit yet also repatriated big powers over agriculture, fisheries and VAT, whilst at the same time giving the British government the leverage to pull an emergency break over free movement. - Roland Smith

City AM reported: 

As plans are set in motion for the UK's break from the EU, the "safest way out" is to become a member of the European Economic Area (EEA), a free market think tank has said as a British trade deal could take years.

The Adam Smith Institute (ASI) has said that a sharp break from the EU would be "very bad for British exporters, and really would threaten jobs", adding that a unique trade deal with the UK "will take many years" to agree upon.

The think tank says that the UK should follow the example of countries like Iceland and Norway which are part of the EEA, allowing Britain to trade with the EU as normal and continue to have freedom of movement for the next five years before a British deal can be arranged.

The Daily Telegraph reported:

Sam Bowman, executive director of the Adam Smith Institute, said he was “confident” that the EEA option would be on the table. “As long as all we’re asking for is the same deal that other countries have, the EU would find it very difficult to say no, because that would be clear and egregious punishment for leaving,” he said.

EEA membership would allow the City of London to keep precious “passporting rights” that mean firms can do cross-border business in any part of the bloc. “Passporting is important if we want the City to be a base for international financial institutions,” said Mr Bowman. “It’s for this reason that all the warnings we have heard from banks that they may need to leave the City are contingent on the UK leaving the single market – if we stay, little will change.”

The Daily Telegraph also quoted Sam Bowman in their latest article: "After Brexit, only one thing can keep Britain together: the Norway model". 

An op-ed from Roland Smith in The Daily Telegraph noted:

That journey will very likely involve a first step to an European Economic Area-type position. It won’t be like Norway as there will be no Schengen involvement and of course our geographic borders are more robust.

That EEA position will come with a much-needed emergency brake on the four freedoms – one that can be pulled unilaterally and thus which essentially repatriates to Britain some greater semblance of migration control. There are also other mechanisms putting some democratic control over free movement that already have some precedent in the EEA today.

The UK has voted to Leave the EU, but we must not leave the Single Market

Sam Bowman, Executive Director of the Adam Smith Institute, said:

“This is a vote for Britain to open up to the world: to strike free trade agreements with Asia’s growing economies, forge deeper links with the other Anglosphere countries, and make Britain’s economy as competitive as possible.

“However it is clear that markets have taken a severe hit, much of which is down to uncertainty about what will happen next. It is crucial that the UK does not leave the Single Market even as it leaves the EU, in order to reassure markets and avoid a major economic shock.

“This ‘EEA Option’ will take the economic risk out of leaving and avoid most of the economic losses that Remainers warned leaving would entail. Staying in the Single Market for a period of five to ten years would give the UK the time it needs to properly disengage from Europe as a process, not a one-off event. It is also important that the government does not trigger Article 50 immediately – we need as much time as we can get to negotiate Britain’s exit.

“Of all the arguments for Leaving, the one unifying feature is a desire for sovereignty and UK having control over our own policies. Though immigration did motivate people it was as much the sense of having ‘no control’ as it was about there being too many people. It would be a mistake to assume that this is a strictly anti-immigrant vote.”

For further comments or to arrange an interview, contact Flora Laven-Morris, Head of Communications, at flora@adamsmith.org | 07584 778207.

Roland Smith's EEA option receives further attention in The Daily Telegraph

With the polls as close as they are ahead of Thursday's vote, media attention has increasingly been turning to what Brexit would actually look like. Roland Smith's brilliant EEA option has been receiving ample attention, as has our YouGov poll. The Daily Telegraph reported:

Roland Smith, an Adam Smith Institute fellow, and a proponent of a staged exit from the EU, says a move back into EFTA and the EEA would result in powers over agriculture, fishing, justice, security, and others being returned to the UK.

These alone will “be enough to be getting on with, bearing in mind that we have spent 43 years outsourcing all our capacity in these areas”, Smith says. “Actually getting experts in these areas now will be a real issue”.

Britain’s capacity for negotiating international trade deals has become severely atrophied, since for decades Brussels has done them on its behalf, and recruiting and training new negotiators would become a priority.

A clean break, which would see the UK suddenly regaining every one of its powers from the EU, would overwhelm Whitehall, Smith suggests. The issues the UK would have to deal with by stepping back into EFTA and the EEA would be “more than enough to chew on for a while”.

A large proportion of support for withdrawal is motivated by opposition to EU migration. An immediate solution that did not address those concerns could face backlash. However, polling by the Adam Smith Institute and YouGov suggests that Britons overall are willing to accept the compromise, if it was only a temporary move.

Read the full Daily Telegraph article here. 

Decriminalisation not far enough says ASI's Sam Dumitriu in the Express

The Royal Society for Public Health (RSPH) and the Faculty of Public Health (FPH) have called forpersonal possession and use of all illegal drugs to no longer be considered a criminal offence. Our own Sam Dumitriu thinks decriminalisation isn't far enough:

“The Royal Society for Public Health is right to call for decriminalisation. The evidence is clear, decriminalisation works. Since Portugal decriminalised personal use and possession in 2001, drug-related deaths have fallen, as have HIV infections. Likewise, fears that this would encourage greater drug usage, especially amongst young people, were unfounded. For 15 to 24 year olds, drug use actually fell.
 
“But, there are still problems that decriminalisation doesn't solve. It doesn't eliminate street dealing, it doesn't block access to drugs for under-18 year olds, and it doesn't allow us to regulate the purity of drugs. It should go further and call for full legalisation, which would allow us to take drug profits out of the hands of criminal gangs and protect users from tainted supplies.”

Read the full Daily Express article here.

City AM floats the idea of the ASI Boat Party

Finally receiving the recognition it deserves this week the ASI boat party was promoted in City AM as a highlight of the libertarian social calendar. Rod Liddle described it as "a riotous trip down the Thames with more cava than you can handle and non-stop bangers courtesy of Sam Bowman", shame he'll be at the Freedom Dinner that night then. 

ASI President Dr. Madsen Pirie makes his predictions for June 22nd in City AM

Dr. Madsen Pirie, President of the Adam Smith Institute, made his market predictions for June 22nd, the day before the referendum, in City AM:

The stock markets have proved less susceptible to wild gyrations in response to referendum news. However, the average guess is that the FTSE 100 will drop by around 120 points - two per cent - in the next two weeks to close at 6,060 on 22 June. The range of estimates for where the index will end up was between 5,890 (Madsen Pirie, Adam Smith Institute) to 6,313 (Jeremy Cook, World First).

Madsen Pirie of the Adam Smith Institute agreed that volatility will jump, especially if the Leave side looked like they can triumph: "As it becomes clear that Brexit might win, people will sell pounds and UK shares to hedge against an anticipated short-term drop in both".

Read the City AM article in full here. 

The Sunday Times calls for more discussion of ASI Brexit option

'Brexit debate lacks Norwegian model' wrote Cormac Lucey for the Sunday Times this weekend. Arguing that the discussion of the model was too scarce in the Brexit debate Lucey noted:

Analysis of the Norwegian option by the Adam Smith Institute concluded that “EEA countries have a market-based relationship with the EU by having full single market access. They are free of the EU’s political union ambitions, and can class themselves as self-governing nation states.”

The analysis further argued that the EEA position was outside most of the EU’s “common” policies — common agricultural policy, common fisheries policy, common foreign and defence policy, and justice and home affairs measures — but maintains passporting rights for financial services companies — important for London — along with continued participation in some useful science and education programmes. The Norwegian model doesn’t sound too bad at all.

Read the full Times article here.