Brexit now hangs in the balance. A majority of MPs apparently believe that a no-deal Brexit would be some sort of disaster and are prepared to see the UK remain in the EU or, failing that, in an arrangement that amounts to something very similar.
Roger Bootle
21 JANUARY 2019 • 10:13AM
Roger Bootle
21 JANUARY 2019 • 10:13AM
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| Freight containers at Southampton docks; a free-trade deal with the EU is still possible even in the event of no-deal Brexit CREDIT: JASON ALDEN/BLOOMBERG NEWS |
Moreover, the biggest deal potentially on offer is a free-trade agreement (FTA) with the EU. Remarkably, Mrs May’s capitulation of a “deal” does not include anything substantive on the future trading relationship between the UK and the EU. This remains to be negotiated. We can negotiate an FTA from outside the EU. And, of course, we can negotiate FTAs with countries outside the EU.
There are also a whole series of other issues on which the EU and the UK could forge a close relationship. These include citizens’ rights, the position of EU nationals in relation to nationals from elsewhere within the UK’s new immigration policy, as well as membership of joint bodies on such issues as the environment and academic and research institutions.
So Remainers could get their teeth into this agenda, arguing for as close a relationship with the EU as possible on these various issues, consistent with a full exit from the EU.
They are not taking this position because they must believe there are important elements of belonging to the EU that the above agenda would not match.
But what are they? I think there are ten key things that differentiate the “multi-deal” option from continued EU membership. This list may prove helpful in considering any alternative EU/UK arrangements that might be put forward in coming weeks, as well as helping to flush out the true sources of your friends’/relatives’/spouse’s/MP’s Remainerisim. Where are they on this list of ten arguments for staying in?
1. Continued contributions to the EU budget
Yes, I know this seems incredible but some Remainers do actually think this is a good idea because of the benefits that EU spending brings to Europe.
2. Continued membership of the Common Agricultural Policy (CAP) and/or the Common Fisheries Policy (CFP)
Remarkably, some Remainers believe that, left to our own devices, our agricultural and fisheries policies would be worse.
3. Remaining under the jurisdiction of the European Court of Justice (ECJ)
And again, remarkably, some Remainers do believe that this is more than a necessary evil.)
4. Continued single market membership because of its supposed importance for trade
This is the argument about border “frictions”. Yet Remainers have greatly exaggerated their importance. There have been lots of statements from leading business people to the effect that border frictions are a minor issue.
Moreover, the evidence from international trade backs this up. If border frictions are so significant how is it that countries from all over the world manage to export into the single market so successfully without being members of it?
5. Continued single market membership because it gives unrestricted access to a large pool of European labour
Yet we would continue to have controlled access to EU workers and we would have better access than now to workers from outside the EU.
6. Continued single market membership because it enables people to live and work anywhere within the EU
(Surely, this is nice to have but hardly earth-shattering.)
7. Continued customs union membership because of concern over tariffs on EU imports and EU tariffs on our exports
Yet the average EU tariff on manufactured goods is only about 4pc. Moreover, the British government has the ability to return customs revenues to British consumers by either a reduction in VAT or a unilateral reduction in tariffs on certain goods. Meanwhile, British exporters are well used to facing tariffs when exporting to the rest of the world.
8. Continued customs union membership because the UK would find it difficult to negotiate its own trade deals
Yet, as I have pointed out many times before, the EU’s record in negotiating trade deals is poor. As a smaller entity, not having to get the agreement of 27 other countries, we would be much more nimble.
9. Security
Remainers may believe that inside the EU’s embrace the UK is more secure. Yet the EU directly contributes very little to either our military defence or our intelligence resources. By contrast, it is Nato that protects us and the main element in Nato is the United States.
10. The EU’s future
Remainers may value the opportunity to shape the EU’s future from within – despite the evidence that it regularly steamrollers us. Even so, they may be enthusiastic about the prospect of further integration, including fiscal and political union.
In that case, of course, no other set of arrangements between the EU and the UK could possibly fit the bill. Yet why any British person should support EU membership because they pine for full European Union is beyond me. Increasing numbers of people on the continent want to go in the other direction.
This point 10 is in a league of its own. In essence it represents a quasi-religious belief. Yet if you don’t adhere to any of points 1-9, but you want to stay in the EU, this is what your support for continued membership of the EU rests upon. Good luck with that one.
Roger Bootle is chairman of Capital Economics. roger.bootle@capitaleconomics.com
