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The IEA Brexit Prize – a timely and necessary development

Ruh LeaRuth Lea is an economist and is a former Director of the Centre for Policy Studies.

There is no question that the Prime Minister’s Bloomberg speech in January, promising the British people an in-out referendum on membership of the EU, was of the utmost significance. The speech was a game-changer despite the caveats attached to the promised referendum. Mr Cameron’s proposed timing was after the next General Election, by the end of 2017, which would require a Conservative victory in 2015. And he would allow the referendum after renegotiating the repatriation of certain powers from the EU, which many regard as something of a smokescreen. But, no matter, a firing pistol of sorts has been fired.

The referendum debate is gathering momentum. James Wharton MP’s European Union (Referendum) Bill was overwhelmingly supported (304-0) on second reading on 5 July, though it is likely to fall at future hurdles in the legislative process. And the pressures on Ed Miliband to provide a referendum can only increase. He will not want to be seen as the party leader who denies the electorate a democratic choice on Europe even though there are clear dangers for him. If he is the Prime Minister after the 2015 election, an “out” result in an EU referendum could be highly problematic, though it would, obviously, depend how he handled it.

The intensification of the referendum debate is, of course, inextricably associated with the sense of growing impatience with the EU in the country. UKIP’s successes in the local elections were highly significant in this respect, and I’m perfectly aware that many of those who voted UKIP were not primarily motivated by the desire to leave the EU. The fact is that they voted for UKIP, presumably without embarrassment. Brexit sentiment was, moreover, boosted when a succession of eminent politicians, including Lord Lawson, supported the leaving option. And I was struck by the very existence of a recent debate held by the Centre for the Study of Financial Innovation (CSFI). The topic was the impact of Brexit on the financial services. Such a debate would have been almost unthinkable two years ago. And, even though the outcome of the debate was somewhat inconclusive, there was much support for some serious and detailed thinking about the economic implications of a Brexit.

There has, of course, already been extensive research into alternative options for the UK. Lord Blackwell and I co-founded Global Vision back in 2007 in order to explore the alternatives in the context of rapidly changing global economy and, specifically, a relatively declining EU. We concluded that a Swiss-style option of free trade and mutually beneficial bilateral arrangements outside the EU’s political structures was the way forward. The relevance of the work we did then has become all the sharper with the enfolding and on-going crisis in the Eurozone. Whilst this is not the place to analyse the disaster of the Eurozone in any detail, it is worth reflecting that the EU’s politicians collectively seem quite incapable of resolving the currency bloc’s existential problems. And, under these circumstances, the Eurozone can only continue to decline.

But what has been missing has been a serious and comprehensive analysis of the process of withdrawal and its economic and political consequences in the round. And this is why I’m delighted to support the IEA’s Brexit Prize which is being launched today. I feel honoured to be on the panel of judges, with the chairman Lord Lawson. The IEA competition, with a first prize of €100,000, is “designed to examine the process of withdrawal and, more importantly, how the UK might fit into the fresh geo-political and economic landscape that would follow”.

The competition starts from that premise that a referendum has resulted in an “out” vote and Her Majesty’s Government has triggered Article 50 of the Lisbon Treaty. It is against this background, that competitors are invited to compose a Blueprint for Britain outside the EU. The Blueprint should cover, firstly, “the legal and constitutional process necessary for the UK to leave the EU and set up, if desired, alternative international relationships”. And, secondly, it should cover “the negotiation of the UK’s post-EU-exit position to settle the UK’s relationships with the remaining EU and other interested parties and, crucially, with the rest of the world”. Submissions are invited from individuals, groups of individuals, academia and corporate bodies such as consultancy firms, law firms, accounting firms, think-tanks and investment banks. Further details are available on the IEA’s Brexit website.

I urge you to support the IEA competition. It couldn’t be more timely or necessary. The time for dreaming about freedom from the shackles of the EU is over – it’s now time for some serious hard work. Quite simply, the IEA competition couldn’t be more important for the future of this country.


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