Farron: Hard Brexit would be an act of economic vandalism

Tim Farron has described the hard brexit the Government seems set to hurtle towards as an “act of economic vandalism.”

He has responded to reports over the last two days that leaving the single market and customs union would cost a massive £66 billion a year. From the Independent:

The leaked government document says: “The Treasury estimates that UK GDP would be between 5.4 per cent and 9.5 per cent of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5 per cent.”

It adds: “The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38 billion and £66 billion per year after 15 years, driven by the smaller size of the economy.”

Liberal Democrat leader Tim Farron said the leaked documents showed quitting the single market would wreck the economy.

“This is yet more proof that hard Brexit would be an act of sheer economic vandalism,” he said.

“The Liberal Democrats will stand up for Britain’s membership of the single market.

“We cannot stand by while this reckless, divisive and uncaring Conservative Government wrecks the UK economy.”

Today, the Guardian reports that one of the Government’s Brexit advisers previously warned that leaving the customs union could cost up to £25 billion a year.

In response to this report, Tim Farron said:

Yesterday we were told hard Brexit will cost more than £60 billion, and now we learn that leaving the EU customs union will cost £25 billion. The rocketing bill of leaving Europe reveals the huge economic risk we face with a hard Brexit.

The Government must tell us its plan for Britain’s future. The reckless handling of Brexit by the Conservative Government has already seen the pound plummet, and that is well before all of the extra costs associated with a hard Brexit impact our country’s economy.

It’s important that the British people know the dangers of the course the government wants to drag us down – and are given a say on whether that reflects their vision of leaving the EU. You have to wonder why the Brexiteeers were so keen on a referendum but aren’t confident enough in their case to put the reality to the British people for final approval.

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42 Comments

  • Gosh £85 billion worse off. It would almost make me consider changing my vote from Leave to Remain if I believed the figures. Who is the intended audience for Project Continue the Fear?

  • David Evershed 12th Oct '16 - 10:49am

    I thought Lib Dem policy was against both hard and soft Brexit.

    If so why are we arguing for soft Brexit?

  • jedibeeftrix 12th Oct '16 - 11:12am

    “The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38 billion and £66 billion per year after 15 years”

    We could choose to bump up income tax bands by 5%, increasing public sector receipts as a proportion of gdp by 0.4% (shall we just call it tax, eh?).

    This too might result in a similar £38-66billion over fifteen years, is this too economic vandalism? Or, perhaps merely a policy choice resulting from political choices reflecting public preferences…

  • “We cannot stand by while this reckless, divisive and uncaring Conservative Government wrecks the UK economy.”

    Given the high-stakes game of poker currently being played, I’m holding my judgement on the government’s actual position until the self-imposed deadline for invoking article 50 has passed. SO whilst “It’s important that the British people know the dangers of the course the government wantsBrexit supporters want to drag us down” we need to be careful, as has been pointed out elsewhere the EU Commission is doing much to make Remain unattractive; although the Commission might soften its stance if the UK does a U-turn and goes hard Remain…

  • Andrew McCaig 12th Oct '16 - 12:15pm

    David Evershed,

    I believe our policy is to have the closest possible relationship with the EU. We have a whole bunch of petitions out there trying to protect specific things like science funding and Erasmus, which clearly acknowledge that continued full membership is unlikely.

    I don’t see any inconsistency at all in a position that says “Remain is best, but soft Brexit is better than hard Brexit”

  • Kier Starmer’s 170 questions. Excellent Opposition work that has taken him just a few days after his appointment. Why didn’t we do it during the three plus months that Labour left the field to us, rather than the sporadic outraged blustering that our Leader thinks is the right approach?

  • Matt (Bristol) 12th Oct '16 - 2:22pm

    David Evershed — I understood was that our policy was to argue for a future mandate by referendum or election to halt leaving, or to rejoin, but whilst we have only the 8 MPs and the government still has a mandate to pursue exit, we will argue that any deal needs to be put to the people and / or parliament, and that any deal that is forged should include free movement of people and continued entry of the single market.

    It isn’t that hard to understand, really.

    What do people want the party to do?

    Parade Nick, Paddy and Tim through the streets in sackcloth and ashes repenting for ever having wanted the nation to be an EU member?

    (NB – That does seem to be what the Mail wants all Remainer politicians to do, judging from recent front pages…)

  • @David Evershed

    If the Lib Dems are now favouring Soft Brexit – good. It is accepting the result. Yes, people voted Leave – me must Leave. But let Parliament or Public decide Single Market membership. Personally, I think “soft Brexit” is better than EU membership

    https://2.bp.blogspot.com/-QgTb5KX-K8U/V1gZSyt8lmI/AAAAAAAAB90/QWfTSG10OtE_jl6FzCov50VTP1Z1D_gFQCLcB/s1600/EFTA%2BEEA%2BScorecard.jpg

  • The Lib Dems website says this:

    “Voting for a departure is not the same as voting for a destination. When the deal is negotiated, in however many years’ time, the British people must have a chance to say if they would prefer the new arrangement, outside the European Union, or would prefer to remain inside the European Union”

    Despite in an earlier section saying there shouldn’t re-run a referendum to get the result you like, the above quote does exactly that.

    The UK voted to Leave (destination is outside the EU) – so returning to the EU should NOT be an option. In anycase if you did it would be accepting the euro and re-negotiating all our previous opt-outs.

    We don’t actually know what the Government will decide Hard or Soft Brexit. The Lib Dems should be arguing – along with other parties – including most Tory MPs for membership of the Single Market but outside the EU (as people voted to leave)

    In some ways the Lib Dems are like the Tory Right/UKIP – both have “absolutist” views on the EU.

    Accept the reality of leaving – and press for a Soft Brexit

  • Eddie Sammon 12th Oct '16 - 5:37pm

    Given the choice between status-quo and hard brexit I think the public will choose hard-brexit. That’s why I think a compromise on free movement and soft-brexit is currently the best position.

  • Jedi are you assuming the GDP doesnt shrink? I wish I had your confidence. The Tories will soon have the same reputation for economic competence as Weimar Germany the way things are going.

  • Richard Butler 12th Oct '16 - 6:11pm

    Services won’t be affected, after all hardly any companies that have Passporting rights have taken them up. Services are tariff free and Japan exports a huge value of them into the EU. Companies can use Mifid 2 Equivalence rights, no issue for us as fully complaint service providers and in the worst case we open a brass plate on a desk in Dublin.

    I use all manner of American services from American Express to Twitter, Google to Microsoft and my house contains Pringles, Sony, Panasonic, Roland and pants from China, no trade deal was present.

    By value 70% of our exports are under WTO rules, and this includes some exports into EU. Even if a full average 4% tariff is applied it would make almost no difference to us, here why; take a bottle of French wine. The tariff applied is on the factory gate price, not the retail price. From vineyard to wholesaler, exporter and the rest, the supply chain is about 6 players long. Each of these will absorb a part of this tariff cost, so the consumer will barely notice any difference.

    Of course as we import double that we export, the Exchequer collects double the tariffs Brussels would.

    Now add into this the vast untapped benefits our new found trading status affords us, and the world is our oyster.

    Tim would do very well to read the ground breaking book Futurebabble, which tracks many of the key predictions made by economists and social scientists in the last 100 years. What you discover is that the vast majority of them got it wrong. Even recently when oil was $130 a barrel, the economics consensus said $200 was a. Almost certainty. Guess what, oils prices collapsed to $30.

    Tim history does not judge those well that make shrill hysterical predictions. A calm head attending to ALL the evidence and opportunities will give you greater vision

  • Richard Butler 12th Oct '16 - 6:30pm

    Compassionate Brexit. There are many reasons to view Breixt as a vehicle to spread compassion. Take for example the Ghanian tomatoe growing industry. Thanks to heavily subsidised Italian tinned tomatoes, the EU has almost wiped out the Ghanian industry. Imagine a Britainfree of EU customs regime, able to trade with Ghanian farmers.

    Germany makes vastly more from coffee than all the growers in Africa put together, another symptom of the hammer blow inflicted by EU protectionism.

    Brexit really is a people’s revolution with the ability to unlock global potential.

  • Richard – what will we export more of then?

  • In my experience its a lot easier to sell services around Europe when I can legally work there without visa delays. But hey, cheap Ghanian Tomatoes

  • @Eddie Sammon

    You’re right.

    The UK electorate voted to Leave the EU. There was no ballot on the Single Market.

    The Tory Right/UKIP is one one extreme – Hard Brexit, which says that because the UK will leave the UK, then this automatically means no single market.

    The Lib Dems are at the other extreme – a Hard Remain, if we were to return to the EU (we will leave in 2019), that would mean the euro and no opt outs.

    Yes, we must Leave. But there are a variety of options available. Membership of the Single Market, outside the EU must be one option

  • Eddie Sammon 12th Oct '16 - 9:45pm

    Thanks John B. Yes going back to the EU with fewer opt outs would be a problem too.

    We need more discussion about the specifics of soft brexit. It’s not only the Tories who are divided on this.

  • @John B

    It was made quite clear during the referendum campaign that leaving the EU would also mean leaving the SIngle Market. We were told often enough. We knew what we were voting for.

  • I notice that Siobhab Benita, who stood as an Independent for London Mayor (she can 5th) has just joined us, partly on the basis of our position on Brexit.
    We can use Brexit to win over new voters as well.

  • Siobhan, sorry, my brain doesnt work after 10 pm.

  • Well, the Brexit vote has started to hit the shops….Unilever have demanded an increase of 10% on their goods (Marmite, Persil, etc, etc.)…

    Sadly, this just looks like the beginning,,,

  • Since we have no idea of the Brexit plan as the Tories refuse to say, any projection of damage is highly speculative guesswork, even if there were any precedents to educate a guess. It’s unlikely given the muppets in charge but it is possible we might even benefit economically from Brexit. In the meantime, difficult though it is, it is pointless, even destructive, to devise policy around a complete unknown. Egg on face being a big risk. Just wait and see.

  • Alex Macfie 13th Oct '16 - 1:08am

    @John B: You keep saying the UK public voted Leave, and so there should not no option on the table of the UK remaining in or rejoining the UK. Likewise, the UK voted for a Conservative government at the last election. By your logic, this means that there should be no criticism of the Conservative government or of any of its policies. The people have spoken, now everyone must support the Tories in everything they do in government, and there must be no option of anyone else ever forming a government.

  • Daniel Walker 13th Oct '16 - 7:50am

    @Alex Macfie, @John B I see it’s time for my Crisp Flavour Voting analogy again 🙂

  • John Peters 13th Oct '16 - 8:43am

    @Alex Macfie

    Do I? I didn’t realiae I did say that. I thought I was saying the UK has voted Leave and will Leave and that the Government have got a clear mandate to leave the EU (and Single Market).

    I have no objection to a referendum to rejoin the EU. I do however have an objection to people thinking Parliament has the right to overturn the referendum result.

  • Alex Macfie 13th Oct '16 - 9:47am

    @John Peters: Parliament has exactly that right in our PARLIAMENTARY democracy. The referendum was advisory, and the mandate from it is clear as mud. Strictly speaking, it says a small majority wants the UK to leave the EU. It says nothing about the single market, and Leave campaigners were saying during the campaign that the UK could stay in the single market while leaving the EU.

  • Matthew Huntbach 13th Oct '16 - 10:04am

    John B

    In some ways the Lib Dems are like the Tory Right/UKIP – both have “absolutist” views on the EU.

    No.

    That is the insulting line that the Brexiteers used to run us down: that we were fanatics who believed in EU membership for irrational reasons. With that they were succesfully able to use the line that any argument we put for Remain was just an excuse to hide our real reason for that position, and so could not be trusted.

    I voted Remain because I believe on balance the benefits of being in the EU outweigh the costs. The Leave campaign were unable to convince me otherwise, indeed it was alarming to see how their grand claims about the supposed freedoms gained from leaving the EU were always met by just vague hand-waving when one asked for practical details. It seemed to me they were grossly exaggerating the real power the EU has over its members in order to divert attention from the real issue about lack of control: the globalisation of the economy and the mania for privatisation that gments since 1979 have had means that control of what happens to us has shifted from government at whatever level to the global extreme wealth elite.

    Freedom is not just about lack of legal control, as the “libertarians” would have it, it is also about what in practice others will allow us to do. Collaboration, though naively it may be seen as a restriction on freedom, gives us more freedom if it enables us to achieve more together, and challenge those who would otherwise power over us.

    Freedom gained from leaving the EU depends to a large extent on what other countries and international business power are willing to give us. The reality is that we have a great deal of dependency on them, so we cannot just do whatever we want, as the Leave campaign was hand-wavingly suggesting

  • Matthew Huntbach 13th Oct '16 - 10:29am

    Richard Butler

    Thanks to heavily subsidised Italian tinned tomatoes, the EU has almost wiped out the Ghanian industry. Imagine a Britain free of EU customs regime, able to trade with Ghanian farmers.

    What do we have to offer them in return?

    This country does not produce nearly enough food to feed its population. Why should any other country send us their food? As we have seen, the fall in the value of the pound means less than we could, but in the long term?

    While agricultural protection is perhaps the most criticised aspect of the EU, I very much can see the point of it. Run down agriculture now on the grounds that the Ghanaians feed us, and how long will it be before the Ghanaians find they get a lot more in return for feeding the Chinese?

    What those who funded and led the Brexit campaign wanted was for Britain to be some sort tax haven, run and for shady business types. Whoever heard of a tax haven with a population of 60 million? With even small tax havens the native population are often left in poverty, but the idea is that they benefit because there are not many of them. In reality, there is no role for most British people in Brexit Britain. Shady business would rather bring in cheap labour from abroad anyway.

  • Today Boris Johnson told parliament that, on leaving the EU, “We will get a deal of equal value, “or “possible greater value”…..
    Yesterday pro-leave MPs were repeating the ‘Be positive’, ‘Have faith’ mantra….

    Does anyone, seriously, believe such waffle?

  • Richard Underhill 13th Oct '16 - 12:12pm

    The attempted use of the Royal Prerogative is a constitution outrage, an affront to democracy and flies in the face of an increasingly open society and therefore an increasingly open government.
    There are many political and economic risks. The PM chairs all the key Cabinet committees. She might consider the decision of the Tsar of all the Russias to take personal charge of the Russian armed forces during World War One.

  • Denis Loretto 13th Oct '16 - 2:38pm

    Talk about Ghanaian tomatoes reminds me of the former Lome Convention which was designed to ameliorate some of impact upon poor developing countries of EU protectionism. In any honest appraisal of the EU it must be understood that the free trade within the Union is accompanied by protective barriers at the periphery. Extreme free traders like Liam Fox tend to follow the ideas of (for example) Professor Patrick Minford of Cardiff University. The theory is that giving full reign to the lowest price provider anywhere in the world – whatever the wages or conditions of workers – would reduce prices. But what would that do to our industry and our workers? Here are quotes from Minford –

    “Over time, if we left the EU, it seems likely that we would mostly eliminate manufacturing, leaving mainly industries such as design, marketing and hi-tech. But this shouldn’t scare us.

    “Around half of young adults now go to university, ending up in professions such as finance or law, while the making of things such as car parts or carpentry has hugely shrunk — but there will always be jobs for people without sophisticated skills.

    “Of course leaving the EU will be difficult, and something that needs careful negotiation, but we must completely withdraw to gain these benefits.”

    “It is perfectly true that if you remove protection of the sort that has been given particularly to the car industry and other manufacturing industries inside the protective wall, you will have a change in the situation facing that industry, and you are going to have to run it down. It will be in your interests to do it, just as in the same way we ran down the coal and steel industries. These things happen as evolution takes place in your economy.”

    Brexit would allow the UK to join the global market as a free trading nation,able to buy goods from across the world — and at cheaper world prices, too.
    Why pay more when you can pay less?”

    Good luck with that, say I.

  • There is a risk to talking only, or even mainly, about the economic downturn caused by Brexit in that it suggests that yet again finances are the key decider of whether a policy is a worthwhile risk. A hit to the pound may not be such a bad thing if there were other positives to take from Brexit, however a government who lead the campaign on too removed politicians too often making a decision are now pretty determined to reenact that style of decision making.

  • There really are very scarce positives from Brexit. Of course we could have laws that better match our needs but does anyone really believe the Tories will deliver this. They are fixated on Human Rights and Immigration only. Immigration may well drop as the economy tanks. For some thats worth it but only I think, for diehard xenophobes

  • @ Denis Loreto
    So we would be able to buy stuff from around the world cheaper.

    What are we going to sell them in return?
    If we close down most of our industry as Patrick Minford suggests.

    We already run a staggering balance of payments deficit.
    I would like you to suggest alternative employment with decent pay for the 900,000 people who work in the UK car industry and contribute to £24 billion of exports every year.

  • Simon-croft

    Lets not forget that well over half the cars made in the UK are for the home market or exported to non-EU countries. In or out, hard or soft brexit the UK will still have a car industry.

  • “Over time, if we left the EU, it seems likely that we would mostly eliminate manufacturing, leaving mainly industries such as design, marketing and hi-tech. But this shouldn’t scare us.”

    I suggest Minford needs to get out more, whilst that viewpoint may have been valid in the 1970’s and 80’s, by the middle of the 1990’s it was becoming more and more outdated and to some an imperialist viewpoint that was at odd’s with what was going on in the world as we outsourced more and more and economies such as India and China skilled up. By the early 2000’s we were outsourcing business processes etc. and outsourced hi-tech design and development work to India, China etc…

  • malc – we only have a significant car market because foreign investment bailed out British operations that failed to compete. There are plenty of consumer products that we buy here that are not made here. We are not exactly a good proposition right now.

  • Matthew Huntbach 14th Oct '16 - 9:13am

    Martin

    There in a nut shell is why the Brexit vote is no mandate at all: one portion on the Minford wing voted for absolutely open borders while more (probably) voted for more closed borders.

    This is, indeed, the central issue: the “neoliberal” intellectual elite who pushed for the Brexit referendum, funded it, and used their elite contacts in the newspapers to push it, want it for almost the exact opposite reason that most people who voted for it thought their vote was about.

    So, we have a big Leave vote in former industrial areas where industry has become run down, from people who seemed to think a vote for Leave would return things to the days when their industry was active. Yet here we have a Brexit intellectual elite type, Professor Minford, saying that Brexit means even more industrial closure, but never mind there are more jobs going: yes, jobs for the educated metropolitan types whose dominance the Leave voters though their vote was a protest against.

    The success of Conservatives, here and in the USA, has always been by pushing and confusing two separate lines, getting the votes of people with a small-c conservative mentality, while supporting economic policies that mean the opposite. It is like selling a potion as a supposed cure for symptoms that actually causes those symptons – a good way to make money, if you can get away with it.

  • Denis Loretto 15th Oct '16 - 11:18pm

    @simon-croft
    You seem to think I am supporting Patrick Minford. I suggest you re-read my post!

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