ASI Executive Director, Sam Bowman, comments on the latest OECD Brexit figures

The OECD’s headline figures are based on improbable assumptions that a post-Brexit UK would initially have a less favourable trading relationship with the EU than South Korea and Mexico currently do. This is very unlikely given the costs to both the EU and the UK of such a change, and as such the OECD’s numbers should be treated with deep skepticism. However good an economic model is, if you put bad assumptions into it you will get bad results out of it.
As the OECD itself admits, the ‘EEA Option’, where Britain would leave the EU but remain in the Single Market, would likely have a negligible effect on the British economy on its own. Under this arrangement, the free movement of goods, capital, services and people would be protected, but it would free the UK from the Common Agricultural Policy, the Common Fisheries Policy and the EU’s Common External Tariff, which drives up the price of imported food, and Britain’s contributions to the EU could be cut in half.
The UK would lose its vote on new Single Market laws but would still be consulted in the drafting of relevant regulations, as Norway is now, and would have a seat at the global top table on international bodies that increasingly determine the new rules adopted by the EU, as a recent Adam Smith Institute paper has shown.
Even if it was only a transitional arrangement, the ‘EEA Option’ would take the risk out of Brexit and give Britain the best of both worlds: economic integration without political integration.

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

 

Ben Southwood's comments on the nationalisation of Tata Steel UK covered by the Guardian, Telegraph and City AM

Following the announcement that the government is willing to part nationalise Tata Steel’s UK operations and will be providing hundreds of millions of pounds of debt finance, the ASI's Head of Research, Ben Southwood, made this statement:

“Stepping in to part-nationalise Port Talbot and other Tata Steel operations in the UK, as well providing hundreds of millions of pounds of debt finance, will make Britain poorer in the long run and keep steelworkers dependent on state aid for the foreseeable future.

“If no buyer has approached at the market price, this means that the people who know the steel industry best have judged that Britain's steel sector is not viable in the long run. Sweetening the deal with government guarantees could mean permanently propping up an unproductive industry when the world is moving away from the sort of blast furnace steel production that Port Talbot has.

“There is an alternative: after the steel industry declined in Deeside in North Wales, an enterprise zone was created, which kick-started a revival in different industries with a future. Now, it is a booming site for advanced manufacturing of aeroplanes and cars.

"If there is to be state intervention, it should at least support industries that have a long term future."

Read the full City AM article here.

Read the full Telegraph article here.

Read the full Guardian article here.

Sam Bowman's comments on the latest Treasury report covered by BBC News, Reuters, Daily Express, and Mail Online

Sam Bowman's comments on the latest Treasury report have been featured by a number of national outlets including BBC News, Reuters, the Daily Express and MailOnline.

"The Treasury's numbers are based on a scenario of Britain coming to a limited Canada-style free trade agreement with the EU, which would indeed be a poor outcome. 
"The UK is far too deeply economically integrated with the EU for such a limited trade arrangement to work. But this is very unlikely to be what does happen. 
"It is only likely if we think the government and civil service would seek a post-Brexit deal that they themselves believe to be against Britain's interests."

Sam Bowman's comment on the National Living Wage appears on the front page of City AM

Comment from Sam Bowman, Executive Director of the Adam Smith Institute, appeared on the front page of City AM this morning in reference to the National Living Wage.

“If we are already seeing harm now, it’s likely that things will get worse and worse as the NLW rate rises each year. This is in stark contrast to the measured rises we saw under the Low Pay Commission, which was mandated to avoid unemployment. Now the rate is set according to whatever suits Osborne politically.”