Author Archives: David Graham

David Graham

Shadow-boxing against a “no deal” Brexit is counter-productive


By David Graham | Fri 31st March 2017 - 11:10 am

Theresa May’s letter stated that H.M. Government seeks “a deep and special partnership” with “a bold and ambitious Free Trade Agreement” that covers financial services, where we “have to align with rules agreed by institutions of which we are no longer a part”, and “manage the evolution of our regulatory frameworks to maintain a fair and open trading environment”.

The closest model would seem to be the Deep and Comprehensive Free Trade Agreements (DCFTAs) that the EU has already negotiated with Ukraine, Moldova and Georgia, and has offered to Tunisia, Morocco, Egypt and Jordan. Since all these jurisdictions account for a smaller share of EU exports than the UK, (e.g. Ukraine’s share is 0.8% against the UK’s 8%), it is realistic to expect similar terms to be readily offered to the UK.

A “no deal” scenario on Brexit was never taken seriously by the EU institutions, and is not on the agenda.  Exiting with no agreement on terms of departure or successor trade deal at all would harm the UK’s prospects of securing favourable future trading arrangements not only with the EU, but also with other countries.  It would probably result in British GDP falling by something like £1,700 per household, thereby risking tainting the Conservative Party with economic mismanagement. Had Mrs May seriously sought or expected a “no deal’ scenario, she would not have wasted political capital and risked her credibility seeking to negotiate a new trade agreement alongside an exit deal; it would rather have been to her advantage to leave more quickly and suffer an economic shock in 2017, in the hope that the economy was reviving by the time of the next election. 

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David Graham

My reflections on the Guardian Live EU Referendum debate

By David Graham | Tue 21st June 2016 - 8:33 pm

Attending the Guardian Live referendum debate at Cadogan Hall, off London’s Sloane Square, last night were Chris Grayling MP, Daniel Hannan MEP and John Mann MP for the Leave side; against Andy Burnham MP, Caroline Lucas MP and our very own Tim Farron MP for the Remain side.    The debate lasted an hour, and gave the speakers an opportunity to put forward what they considered to be their best points.

Mr Grayling was on the defensive in relation to the economy.  He criticised the Institute of Fiscal Studies and National Institute for Economic and Social Research modelling for assuming  – in line with the raising of tariffs and other restrictions on trade that would kick in as a matter of existing EU law -that the pound would fall and that trade with the remainder of the EU would fall in a Brexit scenario.  He trotted out the facts that German cars and French food are sold in the UK, but had no answer to the riposte that all other Member States (including net importers from the UK and states with a small share of trade with us) would have to agree before tariffs could be reduced.   He said that studies showed we would be better off, albeit not as well off, in 12 years’ time.  This glossed over the predictions of short-term recession and permanently foregone output of the order of 2% to 5% every year compared to a remain scenario.  

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