Brexit and access to the Single Market

Brexiteers have suggested that even though the UK will leave the EU, the UK will still have access to the Single Market. Is this correct?

The Single Market came into effect in the EU in 1993 and is a trading environment in which businesses may trade with each other and consumers without national restrictions or tariffs. Perhaps the most impressive characteristic of the EU’s Single Market is the sheer size of it. Before a Brexit, it includes within it 500 million consumers, making it the largest market in the world.

I studied European Law for my Masters although I never pursued a career in it. Given recent events I’m rather glad that I didn’t! We were taught that the European Union was underpinned by four freedoms, those being :

1. Free Movement of Goods 

2. Free Movement for Workers

3. Right of Establishment and Freedom to Provide Services

4. Free Movement of Capital

It doesn’t take much reflection to realise how important all four are if you are going to have a Single Market – it can’t really be that if businesses and individuals cannot exercise these freedoms.

We were taught that not only were these four freedoms important, they were in fact enshrined by the EU as underlying principles on which everything is based. They are not mere guidelines, they are the four cornerstones on which the Single Market is based. Access to the Single Market must, the EU has said, involve agreeing to all four. You cannot pick and choose.

The Free Movement of Workers is the controversial point here. Even if the UK leaves the EU, it will still be greatly in the interests of the UK to have access to the Single Market. 

Yet how will this be tempered by having to accept, to some degree, the Free Movement of Workers? Many who voted Leave will be thinking that the government will swiftly bring in marked reductions in immigration. But, in my view, having to accept the Free Movement of Workers will mean this simply won’t happen. We might have more control than we do now. But it will be a lot less control than many who voted Leave will be expecting.

The other alternative is to not include access to the Single Market as part of the deal the UK makes on leaving the EU. This would, it seems, be very damaging to the UK economy. Are we really going to cut our nose off to spite our face? Maybe we are.

At some point, this issue will boil over again. Many of those who voted Leave are unlikely to fully accept the compromise that is going to have to be reached on this point.

A guess at our Brexit future

Predicting the future is an exercise generally in getting everything wrong, but it is worth trying as a way of considering what might happen and what the implications might be. With that disclaimer, here are some ideas:

July 2016

Jeremy Corbyn eventually resigns after an extraordinary amount of pressure is put on him by the Parliamentary Labour Party.

August 2016

After a highly charged and bruising leadership contest, Tom Watson is elected by its membership as leader of the Labour party.

September 2016

After a highly charged and bruising leadership contest, Boris Johnson is chosen by the Conservative party to be its leader. His charisma and success in the referendum swing the balance, although Theresa May is a very close second place.

December 2016

Boris sends a letter to the European Council which amounts to the Article 50 notice for the UK to leave the European Union. By this point, it is clear the EU is completely fed up with the UK. Although he would prefer to delay doing so further, it is clear the EU will make the "departure deal" worse for the UK if there is any additional procrastination.

February 2017

Prime Minister Boris calls for a general election, earlier than required under the fixed term legislation. A motion for a general election is passed by the House of Commons due to the Fixed-term Parliaments Act 2011 but this succeeds without difficulty as due to the state of national politics, everyone agrees this is needed.

April 2017

Prime Minister Boris wins the general election. Labour is very weak and the SNP enhance their hold in Scotland. UKIP now has two seats and the Greens lose theirs in Brighton. PM Boris is popular with many following his successful Brexit campaign.

Over the next year, interest rates rise slowly. Some companies relocate from the UK, but not as many as might be feared. This is principally due to London's power as a centre for finance and commerce throughout the world. Unemployment rises and the economy weakens.

This might be characterised as a "phoney war" period as we are still in the EU despite negotiations continuing for us to leave it.

December 2018

With increasing threats from other countries that they will leave the EU, especially Austria, the EU is putting more and more pressure on the UK to conclude the difficult and protracted negotiations for it to leave the EU.

Nevertheless, the EU grants the UK a further six month extension as the UK markets are still an important customer for the EU.

Late 2019

Eventually the UK formally and legally withdraws from membership of the EU. It now has a rather unique trade agreement with the EU. It still has access to the single market, but at an increased cost and this is offset by some acceptance of free movement of workers. Many of the most strident Leave voters are dismayed at this betrayal, as they see it, and UKIP is still as vociferous as ever. Even this level of involvement with Europe is unacceptable to many.

The UK has in the meantime been able to enter into further trade agreements and arrangements with many other nations and in particular has developed more trade links with China and India, the two fastest growing economies in the world. Although it has left the EU, the UK has embraced further globalisation through these links.

Over the following years, the changes to the UK economy have lead the richer parts of the UK to become richer and the poorer even worse. This, coupled with the sense of betrayal over the results of Brexit, make Boris very unpopular. The work force is more flexible due to the reduction of worker's rights.

April 2022

The Conservatives lose this general election and the Labour leader, Tom Watson, becomes Prime Minister. The SNP have held their hold on Scotland, though this has been reduced.

Tom Watson agrees to a further Scottish referendum with Nicola Sturgeon. This time, the vote is a win for the nationalists and Scotland becomes an independent nation. The kingdom of Scotland (as they still retain the Monarchy) applies to become a member of the European Union.

In the following years, Northern Ireland has a similar referendum and becomes unified with the Republic of Ireland. England and Wales retain the name of the United Kingdom.

Brexit and the UK’s Future - some thoughts.

A key lesson from the general election of 2015 and the recent Brexit referendum is how wrong even the most experienced and knowledgeable experts can be in predicting the future. At the 2015 election, the pundits had suggested it was going to be very close and there was much speculation about a hung Parliament and the technicalities that might arise as a result. In the end, within about ten minutes of the polls closing, the exit polls strongly hinted at a win for the Conservatives and ultimately the magnitude of their victory was a surprise to many people and not something that the pollsters had contemplated.

Similarly, the recent vote to leave the European Union has been something of a shock to many people. The predictions before the result was announced were that Remain would win and no one, not even Nigel Farage, seemed to think Leave would be victorious. Again, predictive power failed to select the right result.

Nevertheless, predicting future events is useful as it at least gives you some ideas about what might happen and the implications that might arise. It’s also an interesting exercise; like writing an alternative history of the future.

So, with these disclaimers in mind, here are some thoughts on the future course of events given the enormous implications of the Brexit vote.

1. Now that we have voted, we are out. It is only a question of time. There isn’t going to be any second referendum. There is no precedent for a government ignoring or not implementing the result of a referendum. Whilst the scale of the victory is not large, it is clear and so professional politicians will be working to put into practise.

2. Now that we’ve decided, the EU will want us out as soon as possible. We’ve humiliated them and our vote is the single most serious challenge to the EU’s existence that it has ever faced. The EU leaders have already referred to wanting the period of uncertainty created by our exit to be as short as possible. More painfully, our vote will only inflame the Euro-scepticism lurking in other member States and the longer this goes on, the greater this effect will be. The EU will put the UK under increasing pressure to get on with it and activate Article 50. The threat they can start intimating is that the longer this goes on, the less attractive the deal the UK will get on leaving. The UK does not have a lot of negotiating strength here. We may be an important trading partner of the EU even when out of it, but we have threatened their very existence. The only way they have to contain our contagious Euro-scepticism is to get rid of us as soon as they can.

3. The UK seems to take the view that we can take our time with all of us, that there is no rush. This is not the way the EU will see it. It is not just a question of what the UK wants anymore. The 27 other member States are going to be working to their own agenda and we are now just a problem to them that needs to be resolved.

4. Similarly, the EU will be in no mood to grant us any kind of favours or kindness on our way out. We have stuck our fingers up at them – now they will return the gesture.

5. The negotiations to leave will be complicated and heavy going. EU law is inextricably bound up in our own domestic legislation. At this stage it is part and parcel of how we as a country operate. Withdrawing from all that is a complex task and will require the employment of a large number of civil servants and government resources. A whole new section of government will have to be created to accomplish this task. The expense of this will lessen any possible savings from leaving the EU for some time.

6. Leaving the EU seriously undermines the UK’s position on the world stage. Our most important international role has been bringing the EU and the USA, the two major components of Euro-Atlantic relations, together. Our role as the Euro-Atlantic “bridge” could have been an exciting and important future for the UK in which our diplomatic significance far outstrips our economic or military contribution. That’s gone. Instead, we will be a disappointment to both and of lessening interest to all concerned.

7. We will be of far less interest and significance to the Americans diplomatically as a result. We’re no longer bringing anything as directly useful to the table. The USA will turn even more to the Pacific, especially as China asserts itself more and more in that arena.

8. Russia and China will see this as a key weakness for the West. We have fractured an important element of the security structure of the West. NATO is the military structure but the EU has always played an important civic component of the structure involved in keeping us all together as an alliance. Before Brexit, the current leader of NATO, Jens Stoltenberg, was very clear that the UK should remain in the EU. He has no axe to grind in this issue; he was speaking purely from the point of view of maximising NATO strength. In these times of increased Russian aggression, this is far and away the single most important point. We have weakened ourselves.