In a major contribution to the public debate on Brexit, Policy Exchange’s Chief Economic Advisor, Dr Gerard Lyons, and leading Telegraph economics commentator, Liam Halligan, have set out proposals for a ‘Clean Brexit’. Former Conservative Chancellor Lord Lawson and former Labour Foreign Secretary Lord Owen have written in support of the paper’s arguments.

Ahead of an expected speech on Brexit by the Prime Minister this week, the paper proposes key negotiating principles for the Government to set out before it triggers Article 50, including making it clear to the EU now that the United Kingdom will leave the Customs Union and the Single Market.

The authors say:

“We need key planks of the UK’s future relationship with the EU to be clear as soon as possible. Chief among those is that we must leave the Customs Union and the Single Market. Declaring ‘Clean Brexit’ now, and putting it at the forefront of our thinking, helps avoid a dramatic policy change overnight for which we are unprepared. It offers businesses greater certainty about the future. It also means we can walk away from the Article 50 negotiations if the EU does not offer us a good enough deal without endangering our economy.”

The paper urges the following measures:

• Explicitly rule out remaining in the EU’s Single Market and Customs Union
• Offer the other 27 EU nations a deal to carry on trading under existing tariff-free arrangements, but make clear we are also happy with World Trade Organisation (WTO) rules — and that if the EU imposes WTO tariffs on us, we will reciprocate
• Insist that the UK will negotiate free trade agreements with the rest of the world, even while we remain in the EU, to come into effect when we leave
• Put the ‘Great Repeal Bill’, highlighted by the Prime Minister, before Parliament now to ensure continuity for businesses

The Sunday Times comments that:

‘May will get a boost from a paper published today by the think tank Policy Exchange that recommends a “clean Brexit”. Written by the economists Gerard Lyons and Liam Halligan, it advises May to offer the EU tariff-free trade but prepare for failure, arguing that the UK will still prosper with tariffs set by the World Trade Organ­isation.’

The Sunday Telegraph comments that:

‘A report from the think tank Policy Exchange published on Monday endorses leaving the customs union, noting that 85 per cent of the world economy will soon be found outside the EU.’

The Sun on Sunday comments that:

‘The economic argument for quitting both EU trade groups was also backed by top economists Gerard Lyons and Liam Halligan. In a study for the Policy Exchange think tank, they warned long-winded talks over migration and single market access would lead to “a disastrous stalemate”.’