Brexit victory! Australia trade deal 'will boost UK economy by £69billion'

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Tory leadership hopefuls are trying to win over party members as Liz Truss and Rishi Sunak fight it out as the final two. Ms Truss spoke about her economic plan this week, and was asked to name a single economist who would endorse her tax policies. The Foreign Secretary claimed that the Brexiteers’ favourite economist, Patrick Minford, would be supportive of her economic vision. He is famed for being an advocate of tax cuts, and his name popped up on more than one occasion during the Brexit debate.

A professor at Cardiff University, Mr Minford argued in a report for Civitas in February that the trade deal between Britain and Australia will boost the UK economy by £69billion.

This would represent a 3 percent boost for the British economy, but the Government’s own figures forecast just 0.08 percent boost.

In the report, Mr Minford accuses the UK of putting up “miserably low” predictions for what the Australia deal could do for the country.

He said: “Why are UK officials indulging in miserably low predictions from Free Trade Agreements?

“Official calculations are biased towards nearby countries, or the European Union in other words, when benefits from deals outside the EU are huge.

“Looking at the recent Australia agreement which was struck over Christmas, officials predict a trivial gain to the UK economy of less than 0.08 per cent or £1.9billion.

Using a new model which looks at potential for trade with the rest of the world based on comparative advantage, the benefit of this agreement alone is likely to be £69billion, some 37 times higher than government figures.

“There is a culture of ‘misberalism’ at the heart of government modelling and we need to overhaul these methods urgently.

“We need an urgent reset to recognise the big gains to be made with becoming a trading superpower with the rest of the world. Government figures look way off the mark and underestimate the benefits of our new global Free Trade Agreements.”

The trade deal was signed in December but has divided opinion.

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In the end, the UK left with a deal, and other economists continue to paint a bleak picture in the aftermath.

The Centre for European Reform (CER) released a study in June which claimed the results of Brexit on the UK economy are “troubling”.

CER’s Deputy Director John Springford said in his “sobering” conclusion that in the final quarter of 2021, the UK’s GDP was five percent smaller.

He added: “It should trouble Labour and the Conservatives that the economy is lagging so far behind its peers.”