The Munk Debates Podcast - Be it resolved: Britain will boom beyond Brexit

Episode Date: January 6, 2021

It was a nail-biter, but just days before the UK formally severed its forty-seven-year long membership with the European Union, negotiators finally landed a trade deal that takes some of the sting out of Brexit. But critics of Prime Minister Boris Johnson say that Britain will never recover from its decision to go it alone, even with an EU trade deal to soften the impact. The loss of seamless access to the world's single largest trading bloc is bound to lead to declining exports and foreign investment in the UK and a brain drain of human talent that will impact every aspect of British life. They argue that the isolationary Brexit mindset and uncertainty around the terms of the new relationship with the European Common Market is the opposite of what the UK and world need to tackle the challenges of the post COVID global reality. Brexit supporters are much more optimistic. They argue that regaining control of British sovereignty, including national laws and regulations, trade, and international borders, will lead to a surge in economic activity in the post Brexit era. Freed of stifling bureaucracy and the sclerotic economic realities of present day Europe, Britain can and will return to its roots of being one of the world's great trading nations.  Arguing for the motion is Patrick Minford, professor of Applied Economics at Cardiff University in Wales and chair of Economists for Free Trade. He is a former adviser to Prime Minister Margaret Thatcher and the author of After Brexit, What Next? Trade, Regulation and Economic Growth.  Arguing against the motion is Ian Goldin, former Vice-President of the World Bank, advisor to Nelson Mandela, and a professor at Oxford University. He is the author of many books about globalisation, most recently Terra Incognita: One hundred maps to survive the next 100 years. Sources: ABC, France 24, BBC, Sky News, KPIX CBS, Bloomberg The host of the Munk Debates is Rudyard Griffiths - @rudyardg.   For detailed show notes on the episode, head to https://munkdebates.com/podcast. Tweet your comments about this episode to @munkdebate or comment on our Facebook page https://www.facebook.com/munkdebates/ To sign up for a weekly email reminder for this podcast, send an email to [e-mail].   To support civil and substantive debate on the big questions of the day, consider becoming a Munk Member at https://munkdebates.com/membership Members receive access to our 10+ year library of great debates in HD video, a free Munk Debates book, newsletter and ticketing privileges at our live events. This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue - https://munkdebates.com/ The Munk Debates podcast is produced by Antica, Canada's largest private audio production company - https://www.anticaproductions.com/   Executive Producer: Stuart Coxe, CEO Antica Productions Senior Producer: Christina Campbell Editor: Kieran Lynch Producer: Marilyn Mazurek Associate Producer: Abhi RahejaBecome a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

I think it's time for this toxic binary zero-sum madness to stop. We're not an imperial power. We're a revolutionary power. We are no longer in a world where you can plot out moves statesmen to statesmen like a chessboard. You don't know anything about my background to where I came from. It doesn't matter to you because fundamentally I'm a mean white man. We can't do this to the next generation because America will cease to exist. Welcome to the Monk DeB. Every episode we provide you with a civil and substantive debate on the big issues of the day. Free of spin, focused on the facts and animated by smart conversation.

To arm you, the listener, with enough information to make up your own mind. Today's debate, be it resolved, Britain will boom beyond Brexit. The global aftershocks after that vote in Britain. and for so many around the world a stunning result, deciding to leave the European Union to go alone. The United Kingdom and European Union together barreling towards the end of the year without a comprehensive deal on how their relationship is going to be working as of January 1st. A post-Brexit trade deal has finally been agreed four and a half years after the UK voted to leave the European Union.

Negotiators finally reached agreement this afternoon with just a week to go before the deadline ends. Hello, I'm your moderator, Rudyard Griffith. Well, it was a nail-biter, but just days before the UK formally severed its 47-year membership in the European Union, negotiators landed a trade deal that takes some of the sting out of Brexit. Here's Boris Johnson presenting the deal on Christmas Day. Here it is. Glad tidings of great joy, because this is a deal, a deal to give certainty to business and travelers and all investments. in our country from the 1st of January, a deal with our friends and partners in the EU.

Critics of Prime Minister Boris Johnson say there's not much to be happy about. The loss of seamless access to the world's largest single trading block is bound to lead to declining exports and foreign investment in the UK, all the while a brain drain sucks human talent out of the United Kingdom impacting every aspect of British life. Critics argue that the isolationary British mindset and continuing uncertainty about the ultimate terms within which Britain would be able to trade with Europe is the opposite of what the world needs to tackle the challenges of a post-COVID-19 global reality. Here's the leader of the British Labour Party.

Let me be absolutely clear and say directly to the government, up against no deal, we accept this deal. but the consequences of it are yours and yours alone, and we will hold you to account for it. Brexit supporters are much more optimistic. They argue that we're gaining control of British sovereignty, including national laws and regulations, trade and international borders will lead to a surge in economic activity in the post-Brexit era. A Britain freed of the stifling bureaucracy and sclerotic economic reality as a present-day Europe, can and will return to its roots as one of the world's great trading nations. For me, the economic vision of Brexit, well, number one, it was global

because, you know, let's face it, the Eurozone is only 15% of the world's GDP and it goes down 1% every year. So the future for trade is they going to be outside Europe? I think we can legislate smarter and better and make this country far more competitive. On this installment of the Monk debates, we challenge the essence of these arguments by debating the motion, be it resolved, Britain will boom beyond Brexit. Speaking for the motion is Patrick Minford, Professor of Applied Economics at Cardiff University in Wales, and chair of Economist for Free Trade. He's a former advisor to Prime Minister Margaret Thatcher. Arguing against the motion is Ian Golden, former Vice President of the World Bank, advisor to Nelson Mandela, and a professor at Oxford, University. He's the author of many important books on globalization, including the recently published

Terra Incognita 100 Maps to Survive the Next 100 Years. Patrick, Ian, welcome to the Monk Debates. It's a pleasure to be with you. Pleasure to join you. I'm really looking forward to today's conversation and debate with you both. I mean, this is not just a topical issue this week. It is the culmination now of a multi-year process for the United Kingdom to leave the European community. This is happening. It's happening now. It has big ramifications for the UK. It has big ramifications for globalization and how we kind of think about the future of prosperity and economic trade in a world that is coping now with the aftershocks of the COVID-19 pandemic. So to have both of you hear to provide your considered opinions, your analysis and insights is a real privilege for our

listening audience. Our motion today is a simple one. It's be it resolved. Britain will boom beyond Brexit. Patrick, you're speaking in favor of the motion, so I'm going to put two minutes on the clock for your opening remarks. Take us away. Thank you, Radyard. Yes, I think that Britain is going to do well from Brexit. Let me just put a bit of back. first of all, of course, there was a political incompatibility, really, between the aims of the EU that we were in, which was to go towards a federal union. And I think it was really more in sorrow than in anger that the UK decided finally to leave because of this great incompatibility politically. There were also incompatibilities economically, which I'm going to focus on now, because we're talking about the future and how the economy. will do. So having now reached a trade agreement with the EU, which is very welcome,

we now look forward, I think, in the UK to signing free trade agreements around the world and getting away from what I see as damaging EU protectionism of its kind of two main industries, manufacturing and agriculture, which has never really been in the interests of the UK, which has interest in world free trade. And of course, nearly 60% of our trade is with the non-EU rest of the world. That will bring prices down to competitive levels, world competitive levels, as we get rid of the barriers against the rest of the world, and it will raise productivity in our economy

as we move into areas where we have greater comparative advantage. So those changes will be very beneficial to the economy, according to the models that I've been estimating and pursuing. So that's the first big element. And the second big element is on regulation, where for a long time there has been quite a lot of dissatisfaction in Britain with the regulatory methods and approaches of the EU. And so we're really looking forward to moving towards our own free market style of regulation

in areas like the labor market, the city, energy, and generally in innovation, where the EU has pursued a very precautionary approach, which is damaging to innovation, in my view, and other Brexiteers. So that's the kind of second major area. And then the other two areas are kind of well understood, really. We want to control our borders, migration, make sure that we have a skill-biased immigration policy,

which is what the government's committed to, and also, of course, stop paying large amounts of money to the EU for budgetary aims that we really don't have an interest in. It will, by, I think, stimulating the economy through free trade and better regulation, lead to more revenues available to the Treasury. So that's, I think, the prospect ahead of us, a post-Brexit world and in which post-COVID, too, we can use the government's newfound policies to stimulate the economy quite substantially. Thank you, Patrick, for those opening remarks.

Ian, I'm now going to turn the microphone over to you. You're arguing against our motion. Be it resolved, Britain will boom beyond Brexit. Let's hear your opening bid in this debate. Far from Brexit leading to a boom, if there is going to be a sound, it's going to be a sad whimper. This is the greatest act of self-harm the UK has ever undertaken against its own economy, against its own people, and significantly against the whole idea of Great Britain being a united kingdom with Scotland, Wales and Northern Ireland as part of it. It has already dramatically undermined growth and productivity.

There's a universal consensus amongst all economists except Patrick on this matter. It's a really cost more to the British economy since it was pursued than all the contributions to the European Union over 47 years. And it will continue to escalate in costs as we have to build our own custom services, regulatory institutions and so forth. So the idea of the cost saving is a total fantasy. It's been estimated by the independent, Office of Budget Responsibility that will contract the economy by about 4%. This is a universally agreed number, virtually everyone except Patrick, the OECD, the IMF, the World Bank,

the UK's own Treasury, the UK's own Parliament, and all other August institutions have said it would lead to an economic loss. It's only Patrick's toy model, which is used in undergraduate studies and which has been severely criticised by the Centre for Economic Performance at LSC, That gives you any prospect of positive growth, and that's based on all sorts of very spurious assumptions. And of course, it's been a massive distraction to the UK at a time when it's needed to focus on COVID. It's increased the cost of COVID. It's certainly made recruiting nurses and doctors that we in desperately short supply of and care workers more difficult. And it really

beggars belief to me that economists can come up with the idea that this is going to be beneficial economically. That was Patrick's first point. The second, that will lead to a downward reduction in regulations, to the extent that's true, by diluting labor laws or environmental laws or health and safety safeguards. It's not desirable. The third point about borders and migration, of course, was not prevented by the EU. The EU has a very robust external border in terms of internal movement. there's a massive short supply in critical areas in the UK of skilled workers that's going to be further aggravated by this. And the fourth point he made is that it's going to save large amounts of money. Well, it's already been proved to be totally fallacious.

So I'm afraid that Professor Minfit is a maverick in this, like they are mavericks in health, they're mavericks in economics. But that would be fine if it was just part of a debate and an economic discussion. We need a wide sense of views and opinions to be able to have this. But that has informed and been the primary basis of informing government opinion is the tragedy that is Brexit. And I think it's going to be something that generations to come will regret very deeply. Thank you, Ian. Now the opportunity for us to hear your respective rebuttals.

You both clearly have sharply different views on our resolution before us, be it resolved, Britain, will boom after Brexit. That's terrific. We enjoy that clash of ideas. So Patrick, over to you first, two minutes on the clock to rebut some of Ian's key attacks on your argument. Yes, well, of course, Ian is right. The vast majority of economists in the UK and in government and the whole political community really was heavily against Brexit and was what we call Rema. And this is for a variety of reasons. But the main one, I think, that we've got to focus on is the clash of this consensus with a much older consensus on free trade, which fundamentally this new consensus has become quite protectionist and has embraced what's known as the gravity model of trade, in which the only

trade that really matters is the trade with your neighbors, which arises through just being neighbours. And that's been the argument of Remainers throughout this debate, whereas if you look at trade models generally, we find free trade is advocated by models that think that trade relationships are broadly created around the world in competitive world markets. And they don't particularly depend on neighborliness. And these models that actually support free trade are much better at fitting the facts of the UK. The UK's trade is very far flung.

A lot of it is services, of course, where there's no real neighborly element at all. The trading goods is also far flung around, of course, the Commonwealth and the old trading partners that arose out of the process of. of imperial connections following trade. And it turns out that this is a key disagreement among economists. And frankly, I think they're going to discover that they're very badly wrong, as has happened in previous consensus, where the great consensus of the British economic profession

opposed all Mrs. Thatcher's policies and said they would reduce inflation and they wouldn't increase growth. and that, of course, turned out to be totally wrong. They've done the same with Brexit. So I think that this is a great tragedy in British economic opinion. Ian, two minutes on the clock for you to rebut what you've heard from Patrick so far in this debate. Well, the idea that Patrick has insights that the IMF and the Bank of England and the Treasury and all of the rest of us economists don't have on trade modeling is simply spurious.

I mean, I've written books and books on modeling and trade. gravity is important, just like Canada wouldn't want to sever its links with the US and forego its well fought for trade patterns with the US. So for the UK to sever by far its greatest trading partner, about 50% of trade with Europe. We have a free trade agreement with Europe. We also, incidentally through Europe, have it with many others because Europe has signed agreements with the US, with Latin America, with many countries around the world. And of course, it's just signed a big agreement with China. So the idea that somehow we are substituting heavily protectionist trade environment for a free one is a complete fantasy. We have free trade on about half our goods and services,

including amazingly. And this was fought for by Patrick and Margaret Thatcher, which I find the deepest irony of all of this, the internal markets for financial services, for other movements. And, of course, many, many other agreements. What we've put in place of that is a highly, highly regulated environment, 1,246 pages of red tape now with Europe. Already we've seen many European firms saying they're not going to go. We've seen a third of British firms that are global, saying they want to relocate to Europe or elsewhere as a result of Brexit. We've seen a mass movement out of Britain of investment. Why would that be happening if the prospects were improving? If Patrick is right, good luck to him, but I would not want to bet Britain's future on his hypothesis

being the more accurate one than that of the vast consensus of not only British economists, but those all around the world, including in the foremost economic institutions. It's betting the future of Britain on his hunches. Thank you, Ian. Let's move into the middle of this debate where we get to think about the topics and ideas that are most on our listeners' minds. And maybe, Patrick, to come back to you first and to build on what we just heard from Ian, I think our listeners would like to hear a little bit more about why you think Britain will boom, having severed its seamless access into the European Common Market in favor of this trade agreement, which does have regulations.

And it does have an implied threat, Patrick, does it not embedded in it, that if Britain doesn't continue to conform to European standards, then tariffs will emerge. Terrorists will be the result of British divergence from Europe, which if I understand your argument correctly, you think that divergence is essential to the future prosperity of the UK. Well, let me say that we are not severing free trade with the EU. What we are doing is leaving the single market with its regulations. And indeed, it's true that Mrs. Satcher was instrumental in pushing a single market within the EU. But later, when it led to qualified majority of voting on a variety of areas where EU ideas on regulation, which were quite contrary to what was expected at the beginning when the single market was set out, but, as you know, Mrs. Thatcher felt betrayed by the way in which the EU operated the single market, and she made a famous speech of Bruges. We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level, with a European super state exercising a new dominance from Brussels.

Essentially, that speech underlines how there was a great divergence. of philosophy with the EU. The EU is a very interventionist organization. I'm surprised that Ian says the EU is not protectionist. The calculations we have of tariff and non-tariff protectionism in food and manufacturers are 20% on each, which is a very high average tariff or trade barrier and pushes up our costs in the UK at the price level by about 8% according to our calculations. And so the EU is highly protectionist. And this is why it's never been able to trade with America on a free trade basis, because it keeps out American food and it keeps out American manufacturers through these tariff barriers.

And so this is the background. The EU as an essentially socialist and interventionist organization passing all sorts of protectionist policies, and policies on regulation in the labor market, very pro-union, as strongly against the union laws that we promulgated in the UK. And it's not just divergence that it's not just that the existing level of regulations the EU is generating at the moment that concerns me, but also where it will go in the future and where it might go. And yes, of course,

In our treaty that we've signed with the EU, there are kind of threats that if interests, if the changes of standards are deemed to undermine or damage trade, there could be retaliation through tariffs. But that is mediated through an adjudication panel, and there has to be demonstration of damage. And this is most implausible, frankly. The sorts of regulatory changes that we're going to make, which will be to permit greater innovation in all sorts of areas, as well as prevent any greater union powers, for example, those sorts of things, it would be impossible to show that they cause damage in the EU. Hi there, Rudyard Griffiths, the moderator of the monk debates. Look, this we know. Our society is becoming dangerously polarized. We don't listen to each other. We don't search out of

opposing views. Instead, too many of us live in tribes, convinced that we are right and they are wrong. It's time to put a stop to polarization before it wrecks our democracy. This is what the monk debates charity is all about, ending polarization, searching for common ground. We do this by producing the world's only weekly debate radio program through our monk dialogue series and through mainstage debates on the big topics of the day. Support civil and substantive public debate by becoming a monk member. As a member, you get access to our 10-plus-year online library of great debates in streaming high-definition video, a free monk debate book of your choice, ticketing privileges, and so much more. 30% off when you use the promotional code, Monk, 2021, at our website,

monkdebates.com. Again, that promotional code, Monk-M-U-N-K-21 at monkdebates.com. Join now and help fight the polarization of our democracy. Now back to our program. I think a key argument that's been on my mind, and I know a lot of our listeners too, Ian, which is Europe was moving in a certain direction. We know what that direction was. Tighter integration, an assumption that states would give up not only economic freedom, but increasingly elements of their shared political sovereignty. why wasn't it the right call for the Brexiteers to say, look, we know where Europe is headed. It's headed into a place where British sovereignty, autonomy, is going to be curtailed. It's certainly not the premise that Britain entered into the European community on.

So I want to hear you kind of rebut that argument which has emerged throughout this debate and is informing a lot of the conversation around why some people think, like Patrick, that Britain will boom after Brexit. Well, it's very interesting me that Patrick's recourse is basically ideological. You know, let's use this to smash the trade unions. The Europe is a socialist project. These ideas are a real sense that he's trapped in the 1970s. Tell it to Angela Merkel, tell the Dutch, tell Poland or Hungary that they're socialist

and see what response you get. The idea that Europe is somehow a socialist enterprise. is really an ideologically very extreme position which has no evidence in it. And it's an ideology trumping economics. Boris Johnson hasn't said that the reason for Brexit is to smash the unions. But it's very interesting that Patrick's coming out with this to lower standards. And that's, of course, what people have feared. The standards that Europe has imposed, whether it's environmental,

whether it's on non-tariff barriers like not allowing chlorinated chickens from the US into European markets. The way many chickens are processed here in the U.S. is holding up a trade deal with Europe. What don't the Europeans like? The chlorine. These standards are things that European consumers want, as the UK consumers want.

And they also want labor laws that protect them, and health and safety that protect them. So, yes, there are certain restrictions when you're part of a group like Europe. And there's always, when one agrees to things, some curtailment of sovereignty. But it's very interesting that the biggest threat to UK sovereignty comes from Brexit. Scotland's willingness to leave the UK has increased greatly as a result of Brexit. And I think it's just a question of time until Northern Ireland leaves the UK as well. So it's a great,

great irony to me that in the name of sovereignty, Patrick and the fellow Brexiteers are destroying the sovereignty of the UK. Patrick, come back on that. And come back, I, I think on this point around the new push for Scottish independence. I mean, is Britain going to boom now if it's embroiled in another divisive referendum in Scotland with the threat of the breakup of the United Kingdom as the new debate that will now consume the country for the next number of years? Well, I don't think we have to deal with that yet because at the moment, there is no demand for Scotland for a new referendum and it's not really going to be granted anyway because this was, we've already had a referendum and it was once in a generation event. Northern Ireland, of course,

has got, this is why we have this arrangement with the EU where it's effectively obeying agricultural regulations in the EU because it's integration with Ireland. So I don't think that one's going to really be a problem. Ian is just checking around all sorts of assumptions about Scotland leaving, which I think are completely, have no base. And he also is kind of quite insulting about, you know, the evidence base for what I'm saying, but I've written books about this and have got a lot of modeling and a lot of evidence. And what annoys me about these remainers is that they don't actually confront the evidence from modern modeling on how, what trade models fit the facts.

Now, I can't help the fact that there's a great consensus in the trade theory profession at the moment in favor of gravity models, there are great fashions possible in economics, as we know, and often these fashions are wrong. So, Patrick, let me have Ian respond to that because it's been a key part of this debate. And Ian, I think it probably goes to the listener out there who's thinking to themselves, well, why isn't it in the UK's interest now that it has the freedom to strike its own agreements with different countries based on its interests, not. necessarily on the interests of French dairy farmers or German auto manufacturers or Italian shipbuilders.

Why just inherently don't you get better trade, more efficient trade agreements that are more advantageous for both countries when they're based on the specialized interests of those individual countries? Let me just deal with a couple of the things that have been raised. Firstly, on Scotland, I think one just needs to point to the opinion polls, which have swung very, very, very sharply in favor of independence. Yes, I think it's right that this government's likely to veto new referendum, but that doesn't take it off the table. That just postpones it. And we're also seeing swings in opinion polls in Northern Ireland, which Redis is unexpected, but effectively a barrier has been created in the Irish Sea. So Northern Ireland is increasingly integrated with iron. On trade deals and trade modelling, I don't want to bore your listeners with the details, but I suggest

they look at the London School of Economics, critique of Patrick's model, I've written many books on different types of modelling. Proximity and size of economies, relative economies, make an enormous difference for very, very obvious reasons, as does history and the inertia of history, the way that countries are set up, where their ports are, how they orient themselves, and what their comparative advantages are. So the UK, of course, will attempt to strike new deals with everyone else, and it's doing so. But trade deals typically take between two and 20 years to negotiate. Australia is still negotiating with the European Union after 25 years. So the UK will negotiate trade deals with others, but by far its biggest interest is in making sure it has good

trade with Europe, because it's 50% of trade, just like it's in Canada's interest to make sure it has good trade deals with the US. It could strike, Canada could strike a trade deal, with Australia as it has and other places, but it will never be as significant and never be as a substitute for a group, which is six times the size of your economy on your doorstep, 26 miles away. And so that becomes important.

In the EU trade deal, it says that if you undermine that, there will be various penalties to play. So nothing will be better than free trade with Europe. What free trade deal could be better than the free trade deal you already have? There will be increased regulations

customs, stoppages, checks, and balances, and that's why the cost already has been greater than 47 years of membership of the European Union. So, Patrick, the skeptics out there about whether Britain will boom after Brexit are saying to themselves, you know, the world is a very different place from, let's say, Thatcher's time. You have a United States that seems to have retreated from the previous consensus around global trade and a steadfast support for the United Kingdom and its interests. You have a China that is ascendant with incredible economic power and heft. Are you so sure, Patrick, that the UK pulled out of the European community on its own as a much smaller economy can strike efficient and effective free trade agreements when the world has just so fundamentally reshaped itself, forget even COVID and its impact.

we're just living in a very different geopolitical order. Well, of course we are, the geopolitical order is changing. I completely accept. But the facts remain that Ian said it's taken umpteen years for Australia to negotiate anything with the EU. And the simple reason for that is that there's massive protection of agriculture in the EU, because that is in one of the main members' interests. And the same is true of manufacturing. There's massive protection of manufacturing in the EU because that is in the main interests of Germany, of course.

So you've got France and Germany, both highly protectionist of their particular interests. And, you know, in terms of regulation, that led to substantial intervention in city regulation by the EU because it wasn't an interest of the EU. what we want to do is to sign tree trade agreements with agricultural economies like Australia and the United States, which would bring down the cost of food in the UK. And that's very important to poor people who spend a lot of money on food. And of course, it's all very well for middle-class opinion to be against chlorinated chicken and all these great pandangos that get blown up hugely.

but GM foods are now accepted as completely safe. And they are banned basically by the EU out of its market as part of its protectionist barriers. And so I think we will be able to sign these trade agreements because we would like to have cheap food, frankly, from the US and from Canada and from Australia and New Zealand. It would be good for people here who buy this stuff. But I think the core point is that there's a great gain from getting rid of. this protectionism that is being created by European special interests. And in terms of our barriers against, you know, that are being talked about, that these great border controls, they're illegal under WTO rules, which the EU is signed up to.

Gentlemen, I'm conscious of our time here. So, Ian, I'm going to let you have one more proverbial kick at the can here before we go to closing statements. Is there something you want to specifically address, from what Patrick just said. Yes, absolutely. The first point is that the UK is increasingly a services economy. Over two-thirds of our economy, services, finance is very significant.

If, as Patrick says, it was so much in the interests of finance, why has there been a universal criticism of Brexit from finance and from manufacturing? Over 1.2 trillion pounds have left the UK since Brexit was announced. J.P. Morgan is shifting about 200 billion euros in assets from the UK to Frankfurt because of Brexit. That's just under 10% of the bank's total balance sheet. The move could make J.P. Morgan, Germany's sixth biggest lender. And increasing numbers of bankers, jobs and others are going to Europe because they recognize this. So it's clearly not that the city was against Europe.

They always niggle on their regulations. That's the nature of the game. but they would much rather be part of that because that's one of the reasons they hear. They're here to provide a bridge for the world to Europe. And that is true of many headquarters of many manufacturing jobs. The focus that Patrick's given to food is quite bizarre because it is an increasingly small part of our economy. It's about 2% of employment, increasingly small part of our expenditure. And of course, in terms of growth prospects for the UK, it's absolutely insignificant.

The future of Britain is in services. And there we are going to face increased burdens. The idea that there are no border controls in a free market is absolute nonsense. If that's the case, why is the UK investing massively in new customs facilities and all sorts of inspections, agencies and things? All countries insist on some standards, some customs checks, etc., except when you're part of a free trade agreement as we are with Europe. We were until the 1st of January. So before we go to closing statements, Patrick, yeah, let's have you. reply to that. If I just add for the listening audiences benefit, two key features here

out of this agreement. One, it seems that British accounting firms no longer have standing in Europe under this agreement. And second, financial services haven't been dealt with in the agreement. This is something that still will need to be negotiated. Does this concern you at all in terms of your analysis about why Britain will boom when it seems that two major sources, service industries here, accounting and finance, have at best an uncertain path forward. Well, this is obsessing with the European market, but the city is a global financial center. It's the number two financial center in the world. Its transactions are all over the world, and the EU is simply a small part of it.

So I'm not particularly bothered. I think it's very massively in the EU's interest to have access and equivalence. to the city. Let me just also pick up another point about the borders that Ian made. It is a fact that between developed countries, 97% of border traffic goes uninspected because it's all cleared in advance through computer notification. And so this is the sense in which WTO rules about seamlessness of borders kicks in, and it kicks in with our border with the EU, A40RI, which is obviously one. where there's huge scope for pre-notification.

So a lot of these things that Ian and other Remainers bring up the whole time about how everything will be made difficult with Europe are basically not cognizant of WTO laws and rules that the EU is fully signed up to. Okay, Patrick, we're going to go to closing statements. So two minutes on the clock for you to wrap up this debate, underline any of your key arguments. Thank you, Radyard. Well, I think the first point to make is that there was a political necessity for Brexit

due to the determination of the EU to become a federal state. And I think that mustn't be lost sight of in this argument. So there is a political background as well as an economic background. And when it comes to the economic background, the big problem, I think, with the EU was that it was using its powers in a very interventionist way that was inimical to the progress of the city, which it was hostile to. It was inimical in terms of the labour market

where the EU has proposed over a long period a social market philosophy of intervention in labour markets to give more power to unions in the regulation of business. And this is a big departure from the sort of way in which the UK wants its economy to be organized. I mean, since Mrs. Stature introduced free market policies in the UK, it's been important, really, to get those back on track, even though the EU has derailed them to quite a large extent. and we will have free trade with the EU, which Remainers said we couldn't get, but we have,

and we will have free trade with the rest of the world, which is an enormous boon to our consumers. And it's from those traditional free market policies that I think we will see a boom in the UK, because free markets have always led to booms in the past. And so if we can underline that the UK is a free market economy, it will boom. Investors will come here. Factories will be set up. The north will do well, become more competitive. And we will get innovation and entrepreneurship and indeed lead to, I think, what will be a very good decade or two to come.

Thank you, Patrick. in two minutes on the clock for you to wrap up this debate today, be it resolved. Britain will boom beyond Brexit. Conclude this debate for us. Well, on the economics, Patrick's in a minority of one against thousands of economists around the world in all the big institutions who are unanimous in arguing that this will be very bad for the UK. negative ranges from 1 to 10% over the coming decades. There is not an argument to be made for boom. There's a hope to the best.

His toy model is not the basis for guiding government policies. It's a sort of thing that students do. You do not guide government policy on the basis of something with those assumptions. In terms of the regulatory environment, if there's no regulation, why are there massive queues of lorries backed up? Why is there 1,200 and more pages of regulation? Why is the EU telling us that if we bend the rules, we will no longer have access?

So this is wish. It is not the reality. So economically, it's a disaster. Politically, in terms of domestics, it's a disaster. It will make the poor, much poorer. It will widen regional inequalities within the UK. it really increases the risk of the UK breaking up. It will make us globally a small island that is becoming much smaller.

We will lose all leverage in Europe. And through that, we punched well above our weight in terms of global politics, in relations with Russia in many other debates. We lose all of that. We gain nothing. We will fall out of the top 10 economies in the world soon. And we'll certainly fall out of the top 10 politically as well. our influence will decline greatly.

So I cannot see a prospect of this. I believe in everything that Patrick has said has reinforced my view and for Bushney, I was hoping he would convince me differently because we have to live with this, that this is an ideological process. It's some old fear of Europe and of trade unions and of protection for workers' rights. And those are things that I all think and believe are good.

They've been fought for by consumers. they will continue to be fought for by consumers in the UK. And there is nothing but bad things coming out of Brexit. So far from a boom, it will lead the UK to decline more rapidly than it would of if it had stayed in Europe. Thank you. This, you know, is such a contentious, difficult issue that has over the last number of years, you know, elicited a debate that's often been incoherent, uncivil and unsubstantive. And I think today has been a bit of an antidote to that. I think if there's something to be optimistic about,

it's the fact that both of you have engaged with each other with real civility and with a willingness to look across the aisle, the proverbial aisle, to hear a different argument and to respond in kind. So on behalf of the Monk Debates community, thank you for coming on the program today. It's a pleasure. It's a pleasure. Thank you, Radia.

Well, that wraps up today's debate. I want to thank our participants. Patrick Minford and Ian Golden, they certainly gave us a lot to think about. While the Monk Debates podcast is that special place for civil and substantive debate on the big issues of the day, to listen to more debates on everything from climate change to religion to geopolitics to the future of human progress, visit our website, monkdebates.com. You can also find show notes on today's debate. Thank you for helping us bring back the art of public debate, one conversation. at a time. I'm your moderator, Rudyard Griffiths.

The Monk Debates are produced by Antica Productions and supported by the Monk Foundation. Redyard Griffiths, Marilyn Missouri, and Christina Campbell are the producers. Abbey Rojasia is the associate producer. The Monk Debates podcast is mixed by Kieran Lynch. The president of Antica Productions is Stuart Cox. Be sure to download and subscribe wherever you get your your podcasts. And if you like us, feel free to give us a five-star rating. Thanks again for listening.