The Prosperity Institute must be a good thing, surely? After all, we are all in favour of prosperity, aren’t we?
It all goes to show that you can’t judge a book – or in this case, a right wing think tank – by its cover. The Prosperity Institute used to be called the Legatum Institute and for years has been pushing a free-market, low tax, anti-immigration agenda that has helped to land us in our current mess. It was and remains firmly behind Brexit, which is costing us tens of billions every year and which even Tory voters concede has been a disaster.
Its stated mission is “to promote and protect the principles that produce local and national prosperity”. Given what’s happened since we left the EU, that would seem to be a contradiction in terms. But that hasn’t stopped the Prosperity Institute having a go at the government’s reset of its relationship with the EU. Predictably, if improbably its new report claims that Keir Starmer’s improvements will make us even worse off.
The report rather gives away its conclusions with the cover image, which shows a man in a bowler hat bowing to the EU flag and the Union Jack, which are flown together. More clues can be found in the title (“The road to nowhere”), and in the fact that the foreword is written by Lord Frost. The very man who negotiated the terrible deal that is now being “reset” and who dares to think he made such a good job of it that this is “a wholly unnecessary “reset” of our relationship with our European neighbours.”
Subtlety, self-knowledge and impartiality are not, it seems, the Prosperity Institute’s strongest cards.
But what does the report actually recommend? It claims that the future wealth of the UK depends on three pillars:
Maintaining or improving the current deal with the EU, just not the way the government is doing it;
Negotiating more trade deals with other countries; and
Taking advantage of our “freedom” to develop new wealth-creating industries.
The first pillar is built on decidedly shaky foundations. We know that the deal negotiated by Lord Frost for Boris Johnson has cost the British economy 4% or more of our GDP. Yet this report claims the reset will hit independence and prosperity – while offering little or no evidence as to how – and then states, “instead, the UK should negotiate for targeted improvements to the TCA… without compromising on regulatory autonomy, sovereignty, and trade independence.”
Its analysis is naive, starry-eyed and idealistically driven. These people think they are hardheaded realists when they are living in a fantasy world, which, like fairies in Peter Pan, we could all see too, if only we believed hard enough. How you would persuade the EU to give the UK all that it wanted while offering nothing in return, I find impossible to say.
Frost tried that and failed. Do we really want to try again and fail again?
Then we have the second pillar and the jewel in the crown – new trade deals with other countries, which will be an awfully big adventure, apparently. The report omits to mention that any combination of new trade deals would be mathematically incapable of replacing the benefits of membership of the single market. Funny, that.
Yet hope springs eternal at the Prosperity Institute, as is demonstrated by their claims about increased and better trade with America. The report explains we have negotiated a new “Economic Prosperity Deal with the USA, our main ally and the world’s largest economy”.
Yet this deal imposes a minimum 10% tariffs on our trade with Trumpland, and is therefore a massive step backwards, a huge blow to our economic prospects. It is also the exact opposite of what we were promised by Brexit supporters and a lousy base for any future deal. Trump loved Brexit so much that he started a trade war with us.
The third pillar is based on our newfound “sovereignty”, which apparently means that “The overwhelming majority of problems facing the British economy are related to domestic policy, not its trading relationship with the EU. Being outside the EU’s regulatory orbit means that the UK can address these problems in full, if it wishes.”
If that sounds familiar, that is because it boils down to the old “abolish all EU regulations and introduce fewer and better UK regulations” drivel. This was tried by the last four Tory PMs and failed miserably each and every time, but once again we are advised to:
Remove from British legislation any EU-imposed regulations that do not serve British economic interests (we tried that and got nowhere);
Create light-regulation innovation sandboxes and incubators in emerging technologies (I can’t see why we could not do that in the EU);
Set our own, lower standards for products (British industry is desperate to avoid this because it is bad for exports and for the British economy. But what do they know?);
Implement streamlined approval processes for innovative products which can be delivered more quickly and efficiently than the EU’s own assessment procedures (the old saw that we can cut corners and get ahead of the rest of Europe, which ignores the fact that to sell in Europe you need to align with their procedures).
The authors of this report also seem to think we can “negotiate high-trust mutual recognition agreements (MRAs) with partners such as the EU” while maintaining “regulatory divergence in high-growth sectors including digital services, biotechnology, and financial services, where the UK enjoys many existing competitive advantages.”
This is the cherry-picking that the EU has never accepted and will never accept. Why would it recognise our weaker rules as equivalent to theirs, especially when we are boasting that this would give us a huge advantage? They can read English, you know.
In short, this report is exactly the same tired old list of fantasy economics, special pleading, British exceptionalism, delusional hopes and ignorance that got us in this mess in the first place.
It fooled many people in the run-up to the referendum but didn’t last five minutes in the cold, hard reality of dealing with the EU in practice. Nothing has changed since. Except for the fact that the USA has now decided it hates free trade, just when we are staking it all on free trade.
The Brexiteers always claim that the Remoaners should just move on and accept the new world, but this report is not a “road to nowhere”. It is a road to Never-Never Land. It just does not exist.