The UK pays the EU £13 billion a year to be a member. Not being a member of the EU would save the UK £13 billion a year.
If the UK went to World Trade Organisation rules after March 2019, the UK would pay tariffs on goods and services it exported into the EU, but since the UK would pay ‘most favoured nation’ rates, that would prohibit either side imposing punitive duties and sparking a trade war. These WTO tariffs range from 32 per cent on wine, to 4.1 per cent on liquefied natural gas, with items like cars (9.8 per cent) and wheat products (12.8 per cent) somewhere in between.
Martin Beck of Oxford Economics pointed out that the 10 per cent plunge in the value of sterling since the Brexit vote cushioned the loss of competitiveness that would result from facing EU tariffs on goods.
“EU tariffs would represent a burden to UK exporters, but to put it in context, a cost of £4bn or so is only around half of the UK’s net contribution to the EU budget and could be adjusted to through relatively modest movements in taxes on companies, wages and the exchange rate” he said.
By leaving the EU, the UK would save £13 billion a year in membership fees and raise £12 billion a year in tariffs on EU imports. That is a total of £25 billion a year.
UK exporters to EU would pay £5 billion a year in tariffs.
The net gain to the UK would be £20 billion a year.
It would then be for the UK to compensate the losers from Brexit. Farmers would lose CAP payments and exporters may need assistance adjusting to the new situation and help in finding new markets.