Resist, rebel, and remain: the nation deserves and demands a second chance – John Van Reenen

MIT Sloan Professor John Van Reenen

From Vox

Members of Parliament will vote on Prime Minister’s Theresa May’s Brexit deal to on 11 December. Without hesitation, they should vote it down.

More and more people have realised that Brexit was built on a fantasy that we could keep all the benefits of being in the European club without paying any of the membership fees – what leading Brexiter Boris Johnson called the ‘Have Your Cake and Eat It Strategy’. Well, it turns out that having a cake after you have already eaten it once is not so tasty after all. Theresa May has brought back an unpalatable deal that no one likes because it crystallises the reality of what leaving the European Union (EU) actually means. To get easy access to European markets you have to play by the rules of the club – and once a country leaves the club, it no longer gets a vote on what those rules are. So much for taking back control.

The argument for remaining in the EU is fundamentally moral and political, not economic. However, it is important for lawmakers to know that Brexit will make their constituents poorer. Whereas the wealthier can ride this out, it is families on middle incomes and the less well off who will feel the financial pain most sharply. The economics of Brexit are very simple. Being outside the EU inevitably means higher costs of doing business with our nearest neighbours – so there will be less trade, and less trade will make us poorer. The more distant a relationship we have with the EU, the bigger will be our pay cut. This will be hugely painful if there is a disorderly ‘No Deal’; it will hurt to a lesser degree with a softer approach. The formal amounts that the UK pays into the EU disappear in the rounding error compared with these economic losses. (The section at the end of this blog goes into the gory economic details for the truly dedicated reader).

Oh, why EU?

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