‘Project Fear was Project Delusion!’ Brexit ‘EXCEEDS’ expectation – strong growth forecast

Susanna Reid grills Kwasi Kwarteng on ‘Freedom Day’ delay

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The verdict of the senior cabinet minister has come in an article to mark the fifth anniversary of the historic EU referendum result on June 23 last week. It comes as a report by the Independent Business Network (IBN) chaired by former Brexit Party MEP John Longworth has concluded that the Remainer’s “Project Fear has proven to be Project Delusion”. It believes the UK is “on course for strong economic growth.”

Mr Kwarteng said that despite the covid pandemic “Britain is already reaping the rewards” of the vote in 2016 highlighting the success of the vaccine programme, shaking off EU state aid rules, using new powers to encourage research and development, and pointing to analysis which shows the UK is the top destination for overseas in investors in Europe.

He said: “Every step of the way, we’re doing everything we can to ensure the UK is the best place in the world to start and grow a business. To this end, we set up the Taskforce on Innovation, Growth and Regulatory Reform to help shine a light on how we can best use our new-found regulatory freedoms, and we will be responding to their proposals as soon as practicable.

“Our new Brexit Opportunities Unit will ensure we drive home these advantages, making the most of the economic and political opportunities of Brexit to enhance our dynamic, free enterprise economy that embraces the instincts and know-how of the private sector.

“We are laying the foundations so we can build back better from the pandemic – and the initial signs are positive.”

He also highlighted the 68 trade dals agreed since the start of last year with the latest one with Australia which has set the UK on the path for joining the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) with a £9 trillion GDP.

“We are making this country a truly Global Britain, and that fact is epitomised by our presidency of COP26 – driving forward our green industrial revolution globally as we look to eradicate our contribution to climate change.

“Again, this leadership means more opportunities for Brits – take the announcement from GE Renewable that they would be investing in offshore wind off Teesside, bringing up to 750 jobs to the area.

“This is just a taste of the progress we have made in the five years since we voted to take back control. Just think what we can hope for in the next fifty.”

Mr Kwarteng’s optimism is also backed up in a detailed report by Mr Longworth’s IBN group which has considered the different claims made by Remainers in the period during and after the referendum.

It noted in 2016, the International Monetary Fund’s June 2016 Country Report for the UK predicted that a lack of trade access would lead to firms relocating to the EU, especially financial services.  

However, the reality is that UK financial services “have gone from strength to strength” with In the most recent available data from the ONS, financial services remained the UK’s largest exporter of services, and in fact increased by more than £3 billion in the two years immediately after the vote.

Meanwhile, the OECD’s April 2016 report on the economic consequences of Brexit argued Brexit would make the UK a less attractive destination for investment.

But the report says the reality is the EY 2020 FDI Attractiveness Survey found the UK is the most attractive destination for investment this year.

Instead of losing 100,000 jobs in financial services, the IBN has found that the number of jobs has increased.

It also noted that TUC leader Frances O’Grady argued in a 2016 speech that jobs would go in manufacturing as a result of a vote to leave.

However, a 2020 House of Commons briefing paper found the number of jobs in manufacturing had increased by nearly 10,000 between 2016 and 2019.

Mr Longworth said: “The UK’s decision to leave the EU five years ago has proven to be the right one. The continued GDP growth has confounded all expectations of Remain, the ability to write our own regulations has allowed The City to remain the top destination in Europe for financial services investment, and we have made a great start on securing mutually beneficial trade deals with the rest of the world.”

Even the CBI, which supported Remain, has offered a positive outlook for Britain’s economy despite being involved in the Project Fear claims around the EU.

Its research among almost 600 firms suggested that in the three months to June, private sector activity grew at the fastest pace for six years.

Manufacturing and distribution activity grew at record rates while growth in business and professional services remained strong, but consumer services activity continued to fall, said the CBI.

Alpesh Paleja, CBI lead economist, said: “With much of the economy having now reopened, we’re seeing a boost in activity across the economy.

“With robust expectations for the months ahead, and real positivity in terms of vaccine uptake, CBI forecasts show that UK GDP is on course to return to pre-Covid levels by the end of the year.

“Where we need to remain vigilant is the emergence of a two-speed recovery.”

The CBI added that sectors such as manufacturing, distribution and business and professional services looked well on the road to recovery, while firms in industries such as travel needed greater support to prevent the loss of skilled jobs.

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