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Four economic tests to gauge whether Brexit has been a success: Academics

JUSTIN TALLIS | AFP | Getty Images

Britain's divorce from the European Union (EU) must adhere to an objective framework of rules in order for investors to truly understand whether Brexit has been successful or not, according to a report published by an independent think tank.

The U.K. in a Changing Europe has launched a report titled 'A Successful Brexit: Four Economic Tests' on Monday. The report proposes an objective set of guidelines to help gauge whether negotiations between the U.K. and the EU are prosperous.

"To find out whether we are headed for a successful Brexit, we need to know not just what Brexit means, but what constitutes 'success' and what 'works'. For this, we need an agreed set of 'tests' against which we can evaluate the government's plan, the EU's position, and what emerges during the negotiations," the report said.

The group of academics consulted in the report agreed on four tests to decipher whether Brexit has been successful.

Firstly, a successful Brexit would improve the country's economic growth rate as well as bolstering the ability to finance its own public services. Secondly, fairness should be at the heart of negotiations to ensure the most disadvantaged are in a more prosperous position by 2019.

The third test would gauge whether Britain has a more open economy and society as a result of negotiations and lastly, whether Brexit allows the U.K. to genuinely increase democratic controls.


Train crash Brexit

Andrew Tyrie, MP and Treasury Committee chair, cautioned that if these four tests are not passed by the U.K. government then negotiations could result in a "train crash Brexit".

"To protect shareholders' interests, firms will jump off quite soon… and they can only do that by moving into the (remaining) EU countries before 2019," Tyrie added.

U.K. Prime Minister Theresa May has pledged to trigger the formal process of leaving the EU before the end of March. She is aiming to have her Brexit bill, also known as a white paper, passed through both houses of parliament in order to meet her self-imposed April deadline.

The Supreme Court ruled on January 24 that members of parliament must receive a vote on whether the British government can start the Brexit process with the bloc, which effectively bookends the Brexit negotiations with votes in parliament.

Several U.K. based banks are poised to announce at least part of their business operations are being moved from London to another European city, with countries on the continent scrambling to attract top financial officials.

UBS, HSBC and Goldman Sachs are among several of London's lenders which have warned jobs and parts of their respective business operations may have to move away from the city as a consequence of Brexit.