The UK will vote for the first time in more than 40 years Thursday whether to remain or leave the EU. The polls are still close to call, but betting markets are drifting towards a remain vote.
The Institute of Economic Affairs (IEA) published a blueprint Wednesday setting out the two best paths for the UK to take whether it votes to remain or leave the EU.
“If we leave, the promotion of international free trade must be paramount. If we remain, the focus should be on proposing a radical reform plan for the EU,” says the IEA.
If the UK votes to leave, the IEA’s position is that the government should move toward free trade on a global basis instead of trying to secure a series of bi-lateral agreements. Such a move would mean unilateral free trade, with the intention of cutting prices for consumers and reorienting the economy towards its strengths and enhancing productivity.
The UK would also have an opportunity to revise its attitude towards regulation. The IEA recommends a more “organic” approach to regulation instead of top-down diktats in areas including financial services, employment, and energy. (RELATED: UK A Great Investment If Brexit Wins, Says World-Leading Bank)
Clashing with one of the central messages of the official “Leave” campaign, the IEA concludes the UK should have a liberal immigration policy, securing free movement of people with EU and relaxing immigration controls with the rest of the world.
The IEA warn that leaving the EU will not automatically lead to a more free market economy because the UK government can be just as hostile to free enterprise as the EU.
If the UK votes to remain in the EU, the IEA says there needs to be mutual recognition of member states’ regulatory frameworks, with the EU having the power to strike down regulations that inhibit trade.
The EU should also adopt a policy of competitive federalism, to reduce the power of vested interests in Brussels. This would allow the nations of Europe to develop their own policies on regulation, which would then be subject to intense competition from across the continent.
To limit the EU’s power, the IEA suggests a second chamber of the European Parliament consisting of members from the all the national parliaments with the power to veto centralizing regulation and a second court to ensure the EU only intervenes if lower levels of government aren’t capable of acting.
“In its current form, the European Union goes way beyond the proper role desirable for a supranational body designed to promote economic freedom. The EU has a centralizing agenda that makes it easier to lobby for different sectional interests. Furthermore, high levels of external protection raise prices for UK consumers,” said Philip Booth, co-author and Academic and Research Director at the IEA.
“In the event of a vote to leave, the UK should pursue broadly liberal policies in order to achieve an international free trade. In the event of a vote to remain, the UK should bring forward a radical vision of reform for the EU, both constitutionally and ideologically. This may not be welcomed within the EU, but the EU needs reform and there are no prizes for not trying.”
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