David Paton: “Investment in the UK increased after the referendum”

  • David Paton Investment in the UK increased after the referendum

Kyiv: Britain is at a turning point: a recent rally of people for abandoning the Brexit plan, the constant requests from Prime Minister Theresa May for supporting the “Checkers” plan, which is based on a “free trade agreement” with the EU, a negative attitude to the EU’s plan to establish customs the border between Northern Ireland and the rest of the UK. And all this needs to be settled before March 29, 2019 - on this very day Britain finally leaves the union.

It is about the country's economy after leaving the EU and is it true that the Union gives members many trade privileges, talked to Front News International journalist with British professor David Paton, co-editor of the International Journal of Economics of Business and lecturer at the University of Nottingham Business School (Great Britain).

Front News International - At the time of May announcement on October 22 that Brexit was 95% ready, she asked cabinet members to support her plan for leaving the European Union. What is the likelihood of a cabinet riot after she last minute called on ministers to support her?

David Paton - The difficulty is that 5% is the hardest part. Obviously, there are several cabinet members with significant reservations to the Theresa May Brexit plan (the so-called checker plan in the UK). The main problem is that Ms. May returned to her previous plans for Brexit, in which the Single Market and the Customs Union took part. "Checkers" have very little support from the outside, so now there is pressure on her. The words that it will not yield to the EU aggravated the situation even more. Perhaps she will retain support among her comrades-in-arms, but it is very doubtful that the checkers' plan will be able to pass through the House of Commons, of which it is a member.

FNI - Many economists believe that membership in the European Union makes the British economy stronger. The EU supports the UK business, creates jobs and provides lower prices for consumers. Do you think EU membership is a privilege for Britain or is it a burden?

D.P. - “Membership in the European Union makes the British economy stronger” is a very controversial statement. Over a long period, growth rates in the EU tend to lag behind other developed countries. In fact, there is very little evidence that participation in the EU helped the UK economy. For the economy, there may be some benefits from participation in the EU, but there are also disadvantages: restrictions on independent economic policies, more complex trade with non-EU countries, an inappropriate regulation that affects the entire economy, and not just export firms. Whether the EU was profitable for us is a controversial issue. In addition, many EU countries (Spain, Greece, Italy) have one of the highest unemployment rates among all developed countries.

FNI - In the case of exit from the EU, investments will fall and millions will lose their jobs, as global manufacturers will transfer their operations to more profitable member countries of the European Union. How much can the level of the economy in the country fall and does Britain have any idea of supporting the economy outside the union?

D.P. - Turning to the topic of job losses, etc., it is worth noting that during the referendum, many economists and the British Ministry of Finance predicted that if we vote for leaving the EU, there will be an immediate blow to investment, unemployment and tax collection. In fact, investment in the UK increased after the referendum, government loans declined, and unemployment fell to record lows. After leaving the EU, there will undoubtedly be changes in the economy. Remember that the UK is experiencing a huge trade deficit in goods from the EU (the EU sells us $ 100 billion more goods than we sell them). Already, we see that companies are moving to the UK in order to provide access to the market in the absence of a trade deal with the EU.

Nadiia Yunatska, FNI

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