UK can expect £135bn windfall after Brexit, say Economists for Free Trade

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The Government can look forward to a post-Brexit windfall worth £135 billion after the UK leaves the European Union, a new report is claiming.

The Economists for Free Trade (EFT) group says Brexit will be "overwhelmingly positive" for the British economy provided the Government adopts the right policies.

The findings are sharply at odds with most mainstream economists who have warned the UK faces lower growth and more pressure on the public finances as a result of the vote to leave.

But at the report's launch on Tuesday, the pro-Brexit Tory MP Jacob Rees-Mogg will say official forecasts are based on "false assumptions" of the Treasury and that the outlook for the public finances is "much better" than the Office for Budget Responsibility (OBR) is predicting.

Conservative MP Jacob Rees-Mogg
Conservative MP Jacob Rees-Mogg (Yui Mok/PA)

The EFT - headed by Professor Patrick Minford - says the priority for the Government should be to bring down trade barriers with the rest of the world once Britain has left the EU while reducing the burden of regulation and taxation on firms and individuals.

It argues a "dynamic stimulus from classic free trade" combined with continued restraint in public spending could provide "post-Brexit fiscal freedom" worth £135 billion between 2020 and 2025, with a further £40 billion a year from 2025 - including £10 billion a year saved by no longer having to pay into EU budgets

In his speech, Mr Rees-Mogg will say: "This is a free trade approach that focuses on consumers, not producers; one that will generate gains to consumers seven times the cost to producers.

"This is a classical view of the world that has economic history and the latest economic modelling on its side.

"This is a free trade approach to Government which believes Britain's greatest days lie before it and not behind it."

He will say the report's recommendations would lead to an intensification of competition in the UK economy, resulting in a stronger performance than the latest OBR forecasts are expected to show when they are released alongside the Budget on November 22.

"It (the OBR) does its work worthily and reputably, but on the basis of false assumptions given to it by the Treasury," he will say.