Sticking with the theme about no-deal and the need to argue that it is not a remotely conceivable option, a man named Gerard Lyons was on Channel 4 recently claiming that the impact of no deal was exaggerated and easily managed. He was debating with Carolyn Fairburn, Director General of the CBI who told him (rightly) his ideas were delusional. But many viewers will believe him. He was chief economic advisor to Boris Johnson when he was London Mayor and appears to have good credentials.
Lyons, who styles himself as an expert, co-wrote a paper with Liam
Halligan (another nutjob) for Policy Exchange in January 2017 (HERE) advocating a 'Clean
Brexit' which essentially means hurling yourself off a cliff edge - something virtually every other sentient
economist in the world (plus Sir Ivan Rogers as we know) believes would be
totally disastrous. Lyons' Wikipedia entry is so glowing one assumes it can hardly be independent. In fact a note at the top says this (stifle a laugh):
"A major contributor to this article appears to have a close connection with its subject.
In other words, he probably wrote it himself. This is someone that Channel 4 invite on to their programme to comment on Brexit and thought of as an 'expert' - in fact it's his own description of himself. He's an expert only in his own mind.
He also boasts in his Wikipedia entry that, in "The month before the financial crisis he was one of only two UK forecasters then
predicting an imminent deep recession" although I note there is no supporting link to any evidence at all that he forecast anything of the sort. It's the sort of 'forecast' anyone can make after the event.
I
then had a look at the Policy Exchange paper which I can now do with the benefit
of nearly two years of hindsight. First of all there is not a single mention of the Irish border at
all. This is probably the most difficult issue, the great stumbling block, which has created so many problems
and which may yet cause Brexit to fail. Lyons, the great forecaster and
'expert', didn't see that coming apparently. But never mind.
Among the things he asserts is:
Leaving the customs union and the single market was "clearly stated in
the referendum" (Page 3), but as we know everybody clearly stated just about everything
including that we would stay in them both.
We should advise the EU we are happy to continue trading with the EU
"tariff free" (Page 3) but on the next page he talks about striking FTAs
with non-EU countries. He does not seem to realise if we offer the EU
tariff free trade we must do the same with every other WTO member under
MFN rules, in which case why would anyone strike a FTA with us? They
would already have "tariff free" trade.
He says we already conduct around "half our trade" under WTO rules but
two thirds of our trade is with the EU or countries with whom we have an
EU negotiated FTA. Also, no country in the world trades solely under
WTO rules. The EU has many bilateral agreements with the USA already for
example.
He says "The scope for trade relating to sectors such as automobiles
and the City outside the Single Market and Customs Union should be
purposefully explored" - this is just nonsense and illegal under WTO rules.
What he was suggesting is a sort of 'Auto-Pact' that the US and Canada had between 1965 and 2001 but was "abolished in 2001 after a WTO ruling declared it illegal". Wikipedia describes it (HERE).
What he was suggesting is a sort of 'Auto-Pact' that the US and Canada had between 1965 and 2001 but was "abolished in 2001 after a WTO ruling declared it illegal". Wikipedia describes it (HERE).
You can find on-line the 431 page WTO panel judgement dated 11th February 2000 (HERE), concerning the Auto-pact, which in the conclusions, inter alia, says:
Canada acts inconsistently
with Article I:1 of the GATT 1994 by according the advantage of an
import duty exemption to motor vehicles originating in certain
countries, pursuant to the MVTO 1998 and the SROs, which advantage is
not accorded immediately and unconditionally to like products
originating in the territories of all other WTO Members.
Lyons does not seem to realise the policy he is advocating was declared illegal nearly twenty years ago!
The whole thing is full of holes, wrong statistics and wishful thinking.
The whole thing is full of holes, wrong statistics and wishful thinking.
He said our intra EU exports had fallen to 44% but in 2017 when he said it, our EU exports had actually risen to 48%. And he says being in the Single Market makes it 'impossible to negotiate
services-oriented free-trade agreements (FTAs) with countries outside
the EU' once we have left. But barely any FTAs include services anyway and in those that do, the services are just a small fraction of the trade involved. He is plain wrong.
The media should stop inviting these 'experts' on to pontificate about Brexit and giving them the same weight as official Treasury forecasts.
The media should stop inviting these 'experts' on to pontificate about Brexit and giving them the same weight as official Treasury forecasts.
