How Brexit can mean Brexit

In order to regain control of our borders we must reject the single market and go for free trade with the EU instead. Johnson, Davis and Fox are the right people to get us where we need to be. It's happening. Britain is indeed leaving the EU

Brexit's on track
Ryan Fiske
On 22 July 2016 05:34

Prime Minister Theresa May’s new government has been established. For all the worries about this being a Remain-dominated Cabinet, for the moment at least, it looks as though these fears may have been misplaced. Time will tell.

All of the key positions relating to Brexit have gone to prominent Leave campaigners: Boris Johnson as Foreign Secretary, David Davis as Secretary of State for Brexit and Liam Fox as Secretary of State for International Trade. However, although Mrs May says “Brexit means Brexit”, we still don’t know what Mrs May actually means by Brexit or what it involves.

The first key question is about the Single Market. Some people are in favour of remaining in the Single Market, known as the European Economic Area (EEA) or the Norway option. Others suggest a new specific United Kingdom option.

What it is important to know about the EEA is that it does not mean an end to the free movement of people. We would not regain control of Britain’s borders. All EEA and, therefore, all EU citizens would continue to have the right to live and work in Britain, and there would be almost nothing our government could do to stop this.

As many European leaders, including Angela Merkel have said, there can be no compromise on free movement of people within the Single Market. We cannot in good democratic faith pursue the EEA option. To do so would be a betrayal of the British electorate.

When people complain of Brussels red tape, they mean the Single Market. When small businesses say they are being drowned in regulation despite not trading with the EU, it is the fault of the Single Market. Only 10 percent of British businesses trade with the EU, yet all businesses have to submit themselves to the EU's rules and regulations.

Estimates of the cost to the British economy of this excessive regulation vary, but it is significantly damaging. What do we get in return? Free movement of goods and services to the rest of the EU for a limited number of British businesses. This is a very low return for the cost of all the regulation.

Our trade with the EU is dwindling fast, with the UK currently trading more with the rest of the world than the EU.

The EU itself is declining in importance. Its share of the world economy has halved in just over 30 years, and looks set to be worth less than 15 percent of the global economy by the end of the decade. Leaving the EU was meant to be an economic release from the slowly sinking ship of the European economy.

To leave the EU and to remain inside the Single Market would be like putting on a lifejacket and then refusing to leave the ship. The new chancellor, Philip Hammond, as well as Trade Secretary Liam Fox have seemingly ruled out the Single Market option and this is an excellent decision.

What are our other options? There are two: negotiating a Free Trade Agreement (FTA) or relying on World Trade Organisation (WTO) rules.

An FTA is almost certainly the better of the two options, if it is negotiated properly. We do not need unrestricted access to the entirety of the Single Market, only the areas which matter to Britain. Financial Passporting rights are crucial. The EU can be very restrictive on financial activities by banks and insurance companies.

Their rules require a “financial passport” to be issued for institutions to be able to conduct financial activities within the EU. Without this the City of London could be reduced in scope and size. David Davis and Philip Hammond have both gone on record saying this is of the utmost importance to them, therefore it is likely to be a key part of their negotiations.

Other priorities are likely to be less specific, but they would include maintaining as much free movement of goods and services as possible. It may not be as complete access as full membership would be, but it would certainly be enough given the downsides of the EEA.

The added benefits of an FTA would mean Britain would only have to obey Single Market rules when exporting to the Single Market in the same way we have to obey American rules when we export to the USA, or Japanese rules when we export to Japan.

Many small businesses would be liberated from the regulatory burden of the EU. Additionally, an FTA does not mean free movement of people. The British government would be able to control immigration and Britain’s borders. This model would be the option most consistent with what the British people voted for: controls on immigration but maintaining a strong trading relationship with the EU.

We hope Theresa May’s government is capable enough to deliver this best option for the UK. Nicola Sturgeon may attempt to override the will of the British people and keep the UK in the Single Market at any cost. However, this cannot be allowed to happen and it is encouraging to see David Davis already pouring scorn on the idea of a Scottish veto.

But what if the only deal the EU will agree to is so awful we could never possibly accept it? This is where the WTO option would possibly need to be chosen. Falling back on the WTO option would mean the UK would have to pay the same tariffs to trade with the EU as everyone else, but the EU would also have to pay similar tariffs to export to us.

The tariffs EU countries would have to pay to the British government on the cars they export to us would cost £2billion alone. Given how dependent certain sectors of the European economy are on Britain, we think it is unlikely this option will happen as it would be in nobody’s interests for it to occur.

Hopefully the new Government will pick the right path for Britain. Brexiteers have indeed been put in charge of Brexit, but Theresa May will always hold the controlling hand and it is concerning to see she has already given up Britain’s Presidency of the Council of the EU next year, when it could have been a very strong negotiating hand.

Despite this, it already seems the Brexiteers have made it clear Brexit means leaving the Single Market and taking back control of Britain’s borders and immigration policy. This could lead us to a Free Trade Arrangement with the EU, but we will be keeping a keen eye on events as they unfold.

We require an agreement which gives us what we need, but puts us back in control of our own destiny. As long as they stay in charge of the Brexit process we have faith in Liam Fox, David Davis and Boris Johnson to be the politicians who finally Get Britain Out of the EU.​

Ryan Fiske is a Research Executive for the cross-party, grassroots, Eurosceptic campaign Get Britain Out

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