For the last three years, we at the UK in a Changing Europe, in collaboration with the Mile End Institute at Queen Mary, University of London have carried out a survey of MPs focussed on their attitudes to Brexit. The findings this year have been fascinating, not only around preferences concerning Brexit itself, but also on what it might do to, and for, the country.
In the short term, there is a distinct lack of optimism concerning our economic prospects. Only 19% of MPs believe the economy will improve in the year ahead. Even among Conservative MPs, just 37% expect an uptick in the economic picture.
However, when it comes to the longer term, there is a yawning chasm between Conservative and Labour MPs. Conservatives are strikingly upbeat about the long-term future of the economy, with 89% believing it will get better over the next decade. In contrast, a plurality of Labour MPs (44%) believe the economy will get worse while only 23% forecast an improved economic situation.
The Conservative numbers are all the more striking given that there is strong support among their ranks for leaving the single market. Only 23% of Conservative Members of Parliament believe that remaining within that market wold be fully consistent with the referendum result. And fully 80% favour leaving the single market and negotiating a bespoke trading deal with the EU.
Partly, this enthusiasm is down to optimism about the trade deals Britain can sign when once out of the EU. MPs are divided roughly 50:50 over whether future trade agreements can compensate for any loss of trade with the EU.
Yet there is a very clear party split: 83% of Labour MPs are pessimistic that future trade deals will be equally, or more, economically beneficial. 85% of Conservative MPs believe that future trade deals will be as good as if not better than the current situation when it comes to compensating for lost trade with the EU.
Whether these numbers represent genuine hope or blind loyalty to a party line, it is impossible to tell. What is clear is that the thinking on Conservative benches is in sharp contrast to the consensus amongst professional economists.
Here, we find a different logic entirely. Leaving the single market and the customs union will make trade with the EU much more costly – even if a post-Brexit EU-UK FTA means we avoid the hardest of hard Brexits. Swati Dhingra estimates that non-tariff barriers in services have an ad valoram equivalent of between 8.5 and 47.3% when it comes to services trade between the EU and the US.
Outside the single market, the UK will be liable to at least some of these costs. In aggregate terms, she estimates that a hard Brexit would directly reduce GDP by about 3% per year due to higher trade barriers – with potential indirect costs that could double or triple this figure.
Given that economists continue to insist that there is a relationship between trade and geography, they struggle to see how deals with more distant states can make up for this impact. And while some Conservative MPs may prefer the contrasting views of Patrick Minford of Economists for Brexit, who claims that if the UK were to unilaterally remove all tariffs and trade barriers after Brexit the result might be a 4% boost to GDP, his estimates have almost no credibility among the vast majority of trade economists.
That the governing majority is out of step with “experts”, particularly those representing the “dismal science”, will surprise few people, though the gulf in expectations is remarkable.
In a sense, it matters not a jot when it comes to the Brexit debate. After all, the impacts mentioned above (in the event that professional economists prove better able to forecast economic developments than Tory MPs) will only be felt once the UK has left the EU and any transitional period is over.
What really matters now from the perspective of an academic observer of Brexit is that we are able to actually track the impact of Brexit, so, eventually, we can reflect on who got it right, and why and learn from the experience.
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.