On Thursday as I was flying home from Brux, I bumped into my West Midlands colleague Malcolm Harbour in the airport lounge, and I asked him how his week had gone. He told me (with, I suspect, a certain satisfaction) that he had been meeting with Leon Brittan (or Lord Brittan, as he now is). They had been discussing the EU’s Single Market.
Of course we know Leon Brittan of old. He was a Conservative Minister under Margaret Thatcher, resigning over the Westland Affair. Later, he became the EU Trade Commissioner, and a Vice President of the Commission. Now he has been appointed a trade adviser to the Coalition government.
Our Deputy Prime Minister Nick Clegg cut his teeth in Brittan’s office. Both, of course, are egregious Europhiles. I first crossed swords with (then Sir) Leon Brittan in early 1999, when I visited Brussels as a candidate, before the 1999 elections.
Before I pursue this story any further, I should make it clear that I have a high regard for Malcolm Harbour – not least because having been a keen member of the EPP group, he has, unlike some, loyally followed Cameron’s plan to leave the EPP and to form the new ECR group, and has been doing his bit to ensure its success. More than that, he is an acknowledged expert on market and industry issues, especially on the automotive sector and on electronic commerce and the internet, and has made a major contribution to the creation of legislation in these areas, always looking to protect the interests and efficiency of British and European business. He is currently the Chairman of the parliament’s influential Internal Market Committee
Unfortunately he remains, like Clegg and Brittan, a committed Europhile.
Harbour, like many apologists for the European project both within the Conservative Party and beyond, regards the Single Market as an unalloyed good. They recognise, of course, that it is incomplete, especially in the services sector, and talk earnestly about the importance of completing it. But in principle, it is the best thing since sliced bread. Weighed in the balance, it makes all the minor irritations and costs and failures of EU membership worthwhile. It is up there with motherhood and apple pie. It is beyond reproach.
Let’s examine this idea. Those of us of a conservative turn of mind, those of us who favour classical liberal economics and respect the Austrian school, Von Mises, Hayek, Friedman, will agree that free trade is a good thing. Indeed the Conservative Party some time ago rightly declared an objective of global free trade in twenty years – though like so many long-term commitments by politicians, it was forgotten after the first few headlines. But does the Single Market promote free trade? Like the curate’s egg, it is good only in parts.
Certainly the Single Market delivers (broadly speaking) free trade within Europe. But the EU is a customs union, with a Common External Tariff, and conservative economists will bridle at that. The Single Market comes with complex and onerous regulatory structures, estimated by a former Industry Commissioner to cost around 5.5% of GDP – perhaps three times the benefit of “free” trade within the Single Market, estimated by a distinguished previous Trade Commissioner – Peter Mandelson –at 1.8%. The Single Market comes with a massive supra-national political and regulatory infrastructure, which many commentators believe is inimical to freedom.
The Single Market creates an inevitable focus on Europe at the expense of the rest of the world. This is particularly damaging for the UK, where as a result of historical, cultural and linguistic factors a disproportionate share of our trade is outside the EU.
And the Single Market promotes – or at least sustains – a highly protectionist approach to the rest of the world – most notably in agriculture – which damages EU consumers and third world farmers alike. Facing global economic problems, the EU proposes new and profoundly protectionist measures, to help EU businesses cope with the very EU regulations which are driving jobs, and business, and investment out of the EU altogether. Voices in Brussels are calling for special environmental duties on imports from countries with lower eco-standards. Some want controls on imports from jurisdictions with lower labour standards, or lower animal welfare standards.
If these voices prevail – and they are powerful – we could see the EU’s Single Market becoming a huge force for protectionism and isolationism in the world – and therefore a force for poverty and stagnation within Europe.
I cannot agree that the Single Market as it stands is a force for good. I should like to hear less about inward-looking, self-referential, protectionist, isolationist Europe, more about global free trade. As the Norwegian NO campaign slogan put it, Europe is too small for us.
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