Lord Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, raised a question on Capx.com today - Utopian Brexiteers need to answer some basic questions.
Here goes. It is also in response to Mark Boleat of CityUK's piece in CityAM recently.
1. Does Brexit threaten investment?
Non-EU investment in the UK is not just ahead of investment from EU countries, it sits about 25% higher and is rising. One third of all investment in Europe in 2015 came to the UK - can it really be argued this would all move to the mainland if we left the EU?
While EU investment in the UK is declining, leaving the EU's tariffs, quotas and regulations would open Britain up to additional investment from outside the Union at a level not seen since before the Single European Act was signed in 1983.
The suggestion that investors would choose France or Germany, with corporation tax rates of around 30%, over Britain where corporation tax is 20% and has been decreased by the government every year for the past four years, is absurd.
2. Does Brexit threaten our financial stability?
We can be confident of what a post-Brexit Britain would look like. It is in the interests of both the UK and the EU to negotiate good trade deals, meaning our EU-trade wouldn't be badly damaged while allowing us to negotiate better deals with the rest of the world. These two combined factors mean Britain should become more, not less, stable.
Not only that, but the UK treasury will save £12 billion a year which it currently sends to the EU, while British businesses will be freed of the EU red tape (which are estimated to cost businesses £33.3bn each year).
In any case, Article 50 of the Lisbon Treaty outlines a two year procedure for a country leaving the EU - we aren't going to wake up on June 24th to financial collapse.
3. Does Brexit threaten our growth?
Why would opening the fourth largest economy in the world up to negotiate new trade deals with all of Europe and indeed the rest of the world threaten growth?
Why would scaling back EU regulations, which cost businesses £33bn a year, threaten growth? Why would stopping the flow of European workers into our over-saturated low-skill job market threaten growth?
The possibility of new trade deals across the globe would invigorate the economy, while scaling back EU regulation would create jobs and lead to stronger growth, not weaker.
4. Will prices increase?
Ending EU regulations, which cost businesses around £33 billion a year, are likely to lead to price decreases.
With the government saving £12bn a year from its EU budget, tax decreases might lead to price decreases too. The UK would also stop paying a portion of VAT revenue to the EU, which could have a knock-on effect on prices. Added to that getting rid of trade barriers with the rest of the world would mean lower food prices, we can get rid of VAT on energy prices and we can repeal regressive green taxes.
Finally, by opening up the whole British market up to the world again would lead companies into competition with each other to make the most sales - which will inevitably mean lower prices.
4. Is Britain already suffering from Brexit uncertainty?
Of course not. Entrepreneurs and market traders are always looking for gaps in the market. Should any gaps appear due to 'Brexit uncertainty', they'd be quickly filled by another trader. That's how business works.
As for questions regarding the uncertain pound sterling rate: the dollar has been growing stronger for several years now. The last two years have seen a fairly steady pattern where the pound has declined from approximately $1.70 to $1.40. Any drops experienced since the announcement of the EU referendum date are not irregular or occurring any faster than usual.
5. Will the pound lose 7% against the dollar if Brexit happens?
It might. Morgan Stanley predicted that in the worst case scenario following Brexit the pound will drop to $1.15 in 2017.
But it is important to note that: Morgan Stanley's Spring Global FX Outlook paper also predicts the pound falling to $1.25 in 2017 even if we stay.
The pound's relative strength isn't much to do with the UK's place in Europe, or to do with the absolute strength of the pound - it is entirely to do with the strength of the growth of the US dollar against the pound.
And remember, a weaker pounds equals cheaper exports.
6. Isn't the Internal Market our safest bet?
The short answer is no. Europe is declining. In 1991, when it contained just 12 countries, the EU constituted 24% of the global economy. In 2016, when it has grown to 28 countries, it constitutes just 15% of the global economy.
Forgetting even European decline, its importance to the UK is shrinking. In the last seventeen years, the proportion of UK goods going to the EU has dropped by 10% - not risen as you'd expect. The rate at which this is happening has also sped up since 2010, to 1% per year. Predictions suggest that this will continue until at least 2019.Suggest a correction