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Sam Bowman defends CEO Pay in Director Magazine

ASI Executive Director, Sam Bowman, appeared in Director Magazine arguing in defence of CEO Pay following various high profile disputes of late. Sam argues:

If executives really are worth as much or more to their firms as they are being paid, the system is working properly. Executive pay has risen significantly over the past half-century because executives have become more important. The more globalised the economy becomes, the more important the strategic decisions made by people at the top of the firm become.

Read the full article here.

ASI Executive Director, Sam Bowman, discusses e-cigarette regulation on IBTimes

Sam Bowman argued that we need to support healthier alternatives to drink, drugs and smoking in an article on the IBTimes this week. The piece reasons that:

If we are becoming able to invent safer alternatives to tobacco, alcohol and drugs, we need a regulatory system that fosters these innovations. This requires a complete rethink of what we've got, a move from the precautionary policy to so-called "permissionless innovation" where new products are assumed to be acceptable for sale, with appropriate caveats, without overwhelming evidence otherwise.
As with environmental rules, public health regulations should encourage safer new inventions that people will adopt of their own free will. Abstinence-only public health policy obviously doesn't work. If we let it, new technology might.

Read the whole article here. 

ASI Fellow, Roland Smith, calls Michael Gove's promise to leave the Single Market 'undeliverable'

Following Michael Gove's promise to leave the Single Market at the same time as exiting the EU, ASI Fellow Roland Smith made the following statement:


Michael Gove’s call to exit the Single Market at the same time as Britain leaves the European Union is interesting, flawed, but ultimately irrelevant. From 24th June, the EU issue will move back into normal Westminster politics with all its associated dynamics and parliamentary arithmetic.
A governing Remain-centric Conservative Party with a small majority sitting in an overwhelmingly Remain-centric House of Commons will not allow the Gove path to be taken. Because while it will be a combination of Leavers and Remainers who decide next steps after the electorate’s instruction to leave, Remainers will have the greater numbers. All of that remains true even if a Leaver takes over the Conservative leadership.
Gove therefore has zero chance of getting a Single Market pullout past his own governing party, never mind the House of Commons. That means the only realistic exit option is to step back to the EEA, as outlined in a recent Adam Smith Institute paper. A move that will itself unleash dynamics in Europe that give EEA and non-Euro countries a much better settlement vis-à-vis the Eurozone.

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

ASI Fellow Roland Smith's comments disputing House of Lords claim on expat rights covered by City AM and The Daily Telegraph

Following claims from the Lords European Union committee that Brexit will negatively effect British expats, ASI Fellow Roland Smith's comments appeared in City AM and the Daily Telegraph.

The House of Lords claim that Brexit will negatively effect British expats following a vote to Leave is based on the presumption that the UK will leave the EU in a “complex and daunting" way, attempting to unpick many treaty obligations and partially replace them with a trade deal.
This is very unlikely to be the case. The Conservative government, the majority of whom have declared for Remain, are not about to cut off from the EU in a lengthy and complex way. Equally the EU is unlikely to offer anything other than the ‘off the shelf’ EEA deal, similar to Norway and Liechtenstein’s, and will make a tailored deal for Britain impossible to discourage other members from leaving.
The EEA option would have almost no effect on expats, or much else, because Britain’s single market participation and the four freedoms would stay intact at exit.

Read The Daily Telegraph article here.

Read the City AM article here.

ASI paper 'Evolution not Revolution: The case for the EEA Option' reported in The Times, City AM, The i, New Day, Scotsman and The Sun

The ASI's new report titled 'Evolution not Revolution: The case for the EEA Option' has received widespread coverage across the national media.

The Times reported:

The Adam Smith Institute has released a report arguing that Britain would have to choose the “Norway model” and join the EEA if it votes to leave the EU, if it is to agree to a trade treaty within two years.

City AM reported:

The Adam Smith Institute (ASI) has said that it would be “impossible” for any other type of individual arrangement to be negotiated between the UK and the European Union within the two year time frame allowed under EU rules.
Not only would agreeing any other kind of deal be difficult due to the complex connections between the UK and the rest of the EU, but the ASI also believes that the “EU will make a tailored deal for Britain impossible to discourage other members from leaving.

The i reported:

The EEA option would offer the UK political freedom while also allowing the country to participate in the single market. Leave campaigners have suggested the UK could strike its own trade agreement. But the report warns the EU will make it difficult for the UK to negotiate a deal in order to discourage other states from trying to leave.

New Day reported:

The Adam Smith Institute predicts that in the event of Brexit on June 23 the UK would have to join Iceland, Liechtenstein and Norway in the European Economic Area. It offers political freedom while allowing countries to participate in the single market.

The Sun reported:

A report by the Adam Smith Institute warns the EU will make it difficult for the UK to negotiate a tailored deal in order to discourage other member states from trying to leave.
Instead, it proposes joining the European Economic Area alongside countries like Norway, which would continue our access to the EU’s single market. But the EEA option means continuing with the principle of free movement, meaning it will still be hard to cut immigration.

The Scotsman reported:

The Adam Smith Institute predicts that in the event of a Brexit on 23 June the UK would likely have to join the European Economic Area (EEA) because that option would be the only one possible to achieve within a two-year, treaty-defined time frame.

Read the full Times piece in full here.

Read the City AM piece in full here.

Read the Sun piece in full here.

Read the Scotsman piece in full here.

Press Release: Why the only way is EEA for a post Brexit Britain

  • EEA option only viable route out of EU in two year time frame
  • Government is irresponsible not to think about realistic exit strategy should UK vote to Leave 
  • EEA position offers political freedom with participation in the Single Market
  • EU will make tailored deal for Britain impossible to discourage other members from leaving
  • EEA members stay in the single market, but are outside of the EU’s tariffs, common agricultural & fisheries policy, foreign policy, and justice & home affairs

Today a new report released by the Adam Smith Institute lays out its prediction for what a post-Brexit Britain would look like should voters choose to Leave the EU on June 23rd. 

The report argues that, despite claims of tailor-made trade agreements coming from the Leave campaign, in practice all this would be dropped following a vote to withdraw from the EU. In the immediate aftermath, the entire government and civil service will need to strike a speedy and pragmatic Brexit deal for the benefit of Britain, whatever their stance before the referendum was.

The two years granted by Article 50 is an implausibly short time frame in which to negotiate a tailor-made free trade agreement. This process would only be lengthened by the EU’s desire to discourage other members from leaving, making a turn to the ready-made alternative – joining the European Economic Area (the EEA) – the most likely and practical outcome. 

The EU is an organisation that needed over a year to agree a trivial change on migrant benefits, and seven years to agree a deal with Canada significantly more limited than a British deal would need to be. Other models of engagement with the EU could take ten years or more to negotiate, so the Leave campaign needs to turn its attentions to a quicker, and above all less risky, exit strategy. 

The EEA position is one currently held by Iceland, Liechtenstein and Norway. It involves participation in the Single Market but from a position outside the EU. EEA countries have a market-based relationship with the EU but are free of the EU’s political ambitions, and are outside the ‘Common’ policies: Common Agricultural Policy, Common Fisheries Policy, Common Foreign and Defence Policy, and Justice & Home Affairs measures, yet maintain so-called passporting rights for financial services companies along with continued participation in some useful science and education programmes. 

The EEA position opens up the ability to make trade agreements with third countries, providing the UK with the freedom to set its own levels of VAT and to step away from its joint liability of EU debts. The EEA option maintains the free movement of goods, capital, services and people with the rest of the EU, all of which are in Britain’s long-term interests, but would also give the UK an ‘emergency brake’ on free movement, something David Cameron attempted to win during his renegotiation but failed to do. 

Table 1: The below table is a summary of the pros and cons of EEA:

Author of the report, and Adam Smith Institute fellow, Roland Smith said:
“The EEA option starts from a very liberal, cooperative agenda that is practical and realistic, and evolves the UK away from EU membership. This will be the first step of an ongoing evolutionary process that ultimately promises the start of a reinvigoration and re-maturing of Britain’s wilting democracy that is increasingly and worryingly held in contempt by many voters. And all the while, maintaining the very open trade and free exchange we have with our nearest neighbours and friends.”

Sam Bowman, Executive Director of the Adam Smith Institute, said:
“The EEA Option gives Britain the best of both worlds if we leave the EU: economic integration without political union. Under this arrangement, the free movement of goods, capital, services and people would be protected, but the UK would be freed from the EU’s mad, corporatist agricultural policies and tariffs, which drive up the price of imported food and subsidise unproductive farmers. Britain’s contributions to the EU could be cut in half.

“Recent anti-Brexit warnings from the OECD focused on a scenario where Britain’s trade relationship with the EU is severely curtailed, which would indeed hurt the British economy. The EEA Option de-risks the vote and would remove much of the economic uncertainty around the referendum.”


-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.

The report ‘Evolution not Revolution: The case for the EEA Option’ can be viewed 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.    

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.