The Institute of Economic Affairs (IEA) is a right-wing think tank which usually pushes an extreme agenda and was a keen supporter of Brexit. Their latest report (HERE) argues that trading under WTO rules would not be a disaster at all (HERE). It relies mainly on a few basic principles and a lot of dogma. The economy should look after the interests of the consumer and not the producer they say. This is a good general principle that free traders, especially those not actually involved in trade, put a lot of faith in but it assumes these are two quite distinct and separate groups. This is obviously not true. We are all consumers and producers at different times and surely the aim should be to achieve a balance.
If a producer loses his job because of lower priced imports he cannot then be a consumer, at least not as much as he might want to be. And on the other hand, if a producer's goods or services are too expensive there will be fewer consumers, including eventually the producer himself.
Trying to keep this balance so that change occurs over a long period and is properly managed is precisely why trade deals take such a long time to conclude.
The author of the report is Kevin Dowd, one of the economists for Brexit along with Patrick Minford who before the referendum called for unilateral free trade without any tariffs or barriers - something Mr Minford said would have the unfortunate side effect of "eliminating manufacturing" in this country. I note Kevin Dowd does nor mention this in his latest report. Perhaps this is wise of him.
One of the greatest difficulties remainers had in the campaign was this problem of economic forecasting. Official treasury predictions were condemned as scaremongering and leavers like Economists for Brexit poured scorn on any hint that leaving the EU would have the slightest adverse impact on the UK's standard of living. There was no consensus.
Fourteen months on and there is still no consensus. The highly respected Institute for Government has also published a report (HERE) saying quite the opposite. To quote from it:
Leaving with no deal is a recipe for maximum disruption. That no major trading partner trades with the EU on World Trade Organization (WTO) terms alone indicates the unattractiveness of this option. It would mean document checks, testing and inspection at the border. Tariffs would damage the competitiveness of many sectors.
It is a serious piece of work (well worth a read) and shows how integrated we are with European supply chains. Leaving with no deal would be a serious dislocation from which it would take years to recover, if indeed we ever did.
Dr Thomas Samson at UK in a changing Europe (UKIACE) says the government should have carried out an impact assessment about the different trading options (HERE) and I think this will be seen in later years as contributing to the coming disaster. Impact assessments are mandatory even in minor planning matters but not apparently in things which affect the future of the entire nation. Without a comparative assessment which is authoritative we are left in the position we are at present with various bodies setting out wildly different outcomes from the same decision.
Interestingly the UKIACE report says either the government has done an IA and not published it or it hasn't and neither option is desirable.
