When Britain stands naked in front of the mirror does it see a country strong enough to prosper in a more integrated world dominated by closely integrated trading blocs? That’s the question asked by Ángel Gurría, the director general of the Organisation for Economic Co-operation and Development (OECD), and his answer was emphatically negative.
It’s not that the UK looks weak. It’s just not strong enough when faced with the major powers of the US, the EU and China, he said.
On a visit to London to promote the OECD’s cost/benefit analysis of Brexit, Gurría said his organisation had no axe to grind when it suggested that the effect of leaving was to impose a tax on the British for no benefit.
He dismissed the potentially positive contribution from a fall in the value of sterling on exports. Likewise, he brushed aside those who say Britain is swamped with EU migrants, putting pressure on housing, schools and other amenities.
The OECD argues that high immigration is not just a consequence of EU membership, but results as much from people outside the bloc arriving to work in the UK. Concerns about housing shortages should be directed at the UK regulations and tax structures that deter house building and favour speculative investment, it continues. If wages are the concern, there is nothing to stop Britain adopting a higher minimum wage.
The EU is not stopping the UK doing any of these things. As a bogeyman, it lacks the necessary powers.
Talking to Gurría, it’s not difficult to detect his exasperation. The OECD, a 34-member club that includes the world’s biggest economies, has dedicated itself to promoting cooperation and integration to achieve a higher level of efficiency and effectiveness.
Does this mean a loss of sovereignty? Not if the organisations that you join clearly enhance your prosperity, says the OECD chief. In the jargon, the country gains extra leverage from membership.
He added that it was bizarre to leave an organisation only to beg for all the privileges to be maintained seconds after quitting.
These are EU rules and regulations tailored to the UK’s needs, negotiated over the last four decades. If you like the access, remain inside. And why would the EU simply hand them back if Britain were no longer a member, he asked.
The OECD is clearly exasperated at the prospect of Brexit. Gurría said, if anything, the organisation’s report played down some of the nasty side-effects from a flight of investors, a loss of business confidence and higher trade barriers.
As a plucky outsider, the UK can clearly survive, but, the OECD is clear, the country will struggle to prosper.
