Voices: Brexit had to happen – this is why

·4-min read
This government is committed to pushing on with the Brexit programme (Getty/iStock)
This government is committed to pushing on with the Brexit programme (Getty/iStock)

The case for Brexit was very simple: it was the retrieval of self-government by the British people. When the Heath government joined the EU in 1973, with a referendum in 1975 under Harold Wilson’s Labour government, both governments argued that British self-government was not at risk: we were joining a customs union only.

Tony Benn and Enoch Powell, at opposite ends of the political spectrum, warned that this would eventually lead to the loss of sovereignty, and in the intervening 40 years have been proved right. The EU has moved steadily towards its stated aim of a federal state of a “united Europe”, acquiring power over not merely trade but also regulation of all industrial and social areas of life, owing to the creation of the single market and then the Social Chapter.

The final straw for the British public was uncontrolled immigration from EU countries, with immigrants getting the same rights as UK citizens to public health, education and benefits. As has been made very clear since Brexit, it was not immigration as such that British people rejected; there has always been a welcoming attitude to immigrants from all over the world, whether they are true refugees (as are those from Ukraine), have a claim on us (as do those from Hong Kong), or are skilled workers able to contribute to the economy, with the ability to pay their way.

What Brexit offers us today, therefore, is the return of self-government and the long-term welfare gains that brings with it. The Remain side argued that there would be short-term economic costs from the disruption of the existing close links with the EU. On this, it was right; but this is a short-term cost, such as often occurs when long-term shifts of policy direction take place.

Furthermore, it could have been avoided if the EU, instead of taking the path of aggressive non-cooperation, had behaved as the friendly ally it is in its long-term interests to be. In any case, it is quite limited: the only statistically significant short-term effects of Brexit have been on our EU trade in both directions; they cancel out in their effect on GDP, where there has been no significant effect at all, once you allow for Covid. In the long term, the gains from the British people choosing the trade barriers and regulations that suit them best are the economic consequence of choosing political independence.

EU economic policies have been chosen to suit the interests of EU members. Thus, they chose high protection of agriculture to suit French interests, and both protection and regulation oriented towards the interests of German manufacturing. To this, add the use of regulations to achieve social aims in the labour and product markets, in line with the social democratic philosophy of the major European countries.

These regulations were issued under the Napoleonic style of European law, with top-down interdiction of “possible harms”. To make such regulation effective in the UK with its common law system, under which all is permitted unless explicitly forbidden, these EU regulations had to be spelt out in the form of lists of interdictions, a damaging process known as “gold plating”.

It can be seen from all this that the EU was saddling the UK with governmental demands that were thoroughly at variance with British people’s interests. These demands to date, without factoring in what they might have been followed by in the future, imply large-scale long-term gains for our economy from leaving. In my modelling work, I estimated these at around 7 per cent of our GDP. But this was the minimum, assuming there were to have been no further divergence of EU policies from our UK interests – which of course there were very likely to have been.

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It will take time for these gains to be realised by our political processes, which work by grinding out consensus after long debate. Free trade agreements (FTAs) around the non-EU world face opposition from vested interests in agriculture and manufacturing; but with more than 9 per cent of the labour force now working elsewhere, with their main interest being in competition and lower prices, these FTAs will gradually be rolled out.

Similarly, regulatory reform will face predictable opposition, but this will be overcome as people observe the benefits of a common law regulatory system based on responding to the side effects of free market experimentation.

This government is committed to pushing on with the Brexit programme. It could help matters by avoiding unforced errors, such as putting up taxes in the cause of rushing to pay off its Covid debts. But whatever errors it makes, the key point is that the British people now have back in their hands the power to vote in a government that will act in line with their interests. Our long history shows that they know how to use it.

Patrick Minford CBE is a British macroeconomist who is professor of applied economics at Cardiff University

To mark the six year anniversary of the referendum on Britain’s membership of the EU, Voices brings you Brexit, 6 years on – a series exploring the impact of the vote to leave