Join our community of smart investors
Opinion

Brexit: The Leave campaign relies on there being no bumps in the road

Brexit: The Leave campaign relies on there being no bumps in the road
May 3, 2016
Brexit: The Leave campaign relies on there being no bumps in the road

The three 'Leave' proponents on the panel hosted at Bloomberg's London offices made much of the fact that the European dream had become a "nightmare" and that the sluggish economy - "clearly an economic failure" - along with its "appallingly high youth unemployment" was an unnecessary drag on Britain's prospects. The view was that our lot could be greatly improved if we were to become untethered from our neighbours and thus masters of our own destiny.

Yes, there was acceptance from this camp - also featuring another former chancellor Lord Norman Lamont and venture capitalist Jon Moulton - that there would be risks but none so terrifying as to be part of a United States of Europe, which Lord Lawson claimed was the bloc's ultimate aim.

The pro 'Remain' panellists, featuring former Italian prime minister Mario Monti, chief executive of PR firm Publicis, Maurice Lévy and Confederation of British Industry (CBI) director Carolyn Fairbairn, warned about the potential difficulties the UK might face in terms of negotiating trade agreements.

"When speaking about leaving Europe, [the Leave camp] believes things will stay as they are," said Mr Levy.

"I think nothing could be more wrong than this."

Ms Fairbairn agreed: "Free trade deals are difficult to do. Our members are saying they have not heard what an alternative will look like. Why are [Leave campaigners] so confident there will be a blooming of free trade?"

This point is a good one. Nobody knows how easily trade agreements could be renegotiated and as the Financial Times's Martin Wolf pointed out recently, the share of UK trade done with the rest of the EU is far greater than the share of EU trade done with the UK, meaning the "idea that a departing UK could dictate terms is a fantasy".

But Lord Lawson countered Ms Fairbairn by saying the UK trades happily with the US in spite of there being no bilateral agreement, and he was supported by Lord Lamont who claimed that trade was important to everyone - the inference being that, of course, Europe would still want to trade with the UK on collegiate terms.

Examples such as Chile, Singapore and Korea were held up by the 'Leavers' as examples of countries which had successfully launched trade agreements with, among others, the EU. And as things would remain static, under Article 50, for two years in the event of a Brexit, there would be plenty of time to strike deals.

But for me, the 'Leave' argument put forward at this event felt a little old-fashioned, imperialist even. It relies on a traditional view of Britain which was justified in the days of the Empire, but which perhaps doesn't hold so much sway now with other nations.

A comment by Mr Monti chimed with this. He questioned whether the UK would have had the power, the will, or even the gall that European anti-trust authorities did back in the early 2000s to block the proposed merger between General Electric and Honeywell.

"Rolls Royce was most grateful for the EU intervention in this case," he said.

"Can you imagine London having the authority to block a merger which had been allowed by the Justice Department in the US?"

If you're not sure whether the answer to this question is yes - that we would have been able to block it - then perhaps this is a key point.

Can you be sure the Britain can be completely in control of its own destiny and get everything it wants if it quits the EU?

Whatever your view, make it known on 23 June.