The New Trade Route: The Story of the IEA, Brexit and the UK's New Approach to Global Trade

Abstract

This paper sets out a personal view of how, in the years immediately following the Brexit referendum, a group of researchers at the Institute of Economic Affairs worked to explain the need for the restoration of Parliamentary sovereignty and the return of free trade following Brexit. The ideas of these researchers, the IEA’s International Trade and Competition Unit (ITCU), became central to the great debate on the future of the United Kingdom, eventually helping to shape the new ‘free trade settlement’ that emerged. The ITCU researchers were inspired by the early campaigns for free trade in Britain, in particular the Victorian campaigns against the Corn Laws and their relationship to the development of democratic culture amid the widening of the franchise. Working in Westminster through the tumultuous years immediately following the referendum, their work included the most-reported paper ever published by a UK think tank, a paper which met fierce opposition and was controversially suppressed by a state regulator. Yet the IEA emerged victorious from these battles, and ITCU’s work, quoted by Prime Minister Boris Johnson in his first major speech on trade, has become central to the new independent trading nation that is emerging. In the 1980s the IEA was uniquely associated with the free market Thatcherite revolution; today, with the United Kingdom having once more taken its place as an independent trading nation and a force for liberalisation, IEA researchers have been at the heart of helping create the new Brexit Britain. This paper begins by reminding readers of the roots of free trade in the thinking of such classical economists as Adam Smith and David Ricardo, and explains how these ideas were associated with the anti-Corn Law movement, which in turn helped to build modern Parliamentary democracy. It then goes on to describe the events surrounding the 2016 Brexit vote, and the political options faced by the United Kingdom, which echo in some ways the choices facing nineteenth-century Britons. The IEA’s role in this is described, and the main part of the paper focuses on the development of ‘Plan A+’, which set out a path towards free trade in the twenty-first century. Despite the political opposition which Plan A+ provoked, and the attentions of the Charity Commission, which (as pointed out in detail later) I believe to have wrongly forced the IEA to withdraw the paper and censor it before it could be re-released, the ITCU researchers ultimately saw much of their analysis and many of their proposals taken up by the new Johnson administration. If the years to come see the government’s trade liberalisation ambitions come to fruition, it will have been in no small measure because of the efforts of the IEA group.