Samir’s Selection 04/01/2017 (p.m.)
What has the EU done for the UK? >>>
Many economists contend what matters most is not funds transferred between Brussels and London, or even claims of jobs created or destroyed. Instead, the central issue is how EU membership has changed the shape of the British economy — its competitiveness and openness to other markets — through the impact on thousands of companies such as Nifco. “Competition forced these guys to improve or exit,” said Professor Nick Bloom of Stanford University. “The single European market increased competition and forced British firms to increase the level of innovation.”
Daniel Vernazza of UniCredit has shown that UK trade with EU partners grew faster after 1973 than it did with the remaining countries in the European Free Trade Association, the grouping to which Britain previously belonged. His work underlines that harmonising regulations — an effort at the heart of the EU endeavour — was often much more effective in boosting trade than was lowering tariffs…
Professor Nick Crafts of Warwick University, Britain’s pre-eminent economic historian, adds that opening to trade allowed the UK to bounce back after falling behind its neighbours. “Britain’s really, really big problem in the 1960s was very weak competition,” he said. “Trade liberalisation was a major factor in improving competition . . . It removed weak firms, made management better and improved industrial relations — more than Thatcher.” Data compiled by Rebecca Driver of the consultancy Analytically Driven highlight a causal link between Britain’s greater openness to trade since 1973 and its subsequent specialisation in high productivity sectors, including finance, high-tech manufacturing and business services. Ms Driver said the 11 per cent of British companies that trade internationally are responsible for 60 per cent of the UK’s productivity gains…
leaving the union could jeopardise the UK’s gains from increased openness and competition — the contributions economists overwhelmingly say the EU has made to British prosperity. Even economists backing Brexit rarely argue that the EU has had an overall negative effect. Arbuthnot Securities’ Ms Lea describes the bloc’s economic impact as “fairly negligible”. Patrick Minford, long one of the most outspoken economists backing Brexit, said in late February that EU membership had benefited the British economy by freeing trade.
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