Simplistic Soundbites: Single Market

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New growth? Pull the other one (as my old mother used to say)

The Remain Campaign makes much of the Single Market.  It is vital for the UK’s trade that we remain in the Single Market.  They still claim that outside the EU we should lose 3½ million jobs.  Trade would falter.  Inward investment would dry up.  So we must stay in the EU – or at the very least find some associate status like Norway that gives us “access to the Single Market” (but leaves us subject to the EU’s “free movement” and a lot of the other bad things that eurosceptics are desperate to get out of).

Casting my mind back to my early days as an MEP, fifteen years ago, I recall that when I was challenged to find something good to say about the EU, I would fall back on “Well, the Single Market is a clear benefit” – and also (I am ashamed to admit) – I went on to claim that it was “a great Conservative achievement”.  But the realisation gradually dawned on me that perhaps it wasn’t quite all it was cracked up to be.  Recently I’ve been saying that “The Single Market is an old-fashioned Customs Union overlaid by a mountain of excessive regulation”.

I want to tackle head-on the pro-EU argument that the Single Market is vital (or at least important) for UK trade and inward investment.  And I must draw attention to a brilliant article earlier this week from Roger Bootle “The danger of thinking in slogans on Europe”

If we believe that being in the Single Market offers us substantial benefits, we need to look at countries outside the Single Market and see if they are disadvantaged.  And the news is, they are not.  The three biggest countries exporting to the EU are Russia, China and the USA.  Not only are they not EU members – none currently has any special trade deal with the EU at all.  Yet they are hugely successful in exporting to the EU.  They clearly have access to the Single Market.  Roger Bootle draws attention to  recent paper from Civitas with a self-explanatory title: “The Single Market has benefited non-members more than Britain and other founding signatories”.   The author Michael Burrows looked at non-EU countries and found that their exports into the Single Market had broadly speaking grown faster that the UK’s trade with the EU.

This is absolute empirical proof that membership of the Single Market is not essential – or even, arguably, helpful – to trade with it.  Why on earth do we let the pro-EU camp suggest that membership of the Single Market is essential for trade and investment, when clearly it is not?

Let’s take an obvious example – the car industry.  Does anyone suppose that those smart guys in Munich are going to say “Good Heavens! Those Brits have finally left the EU!  Let’s punish them by refusing to sell our cars in the UK!”.  Of course not.  On the contrary, German car-makers (and French wine makers, and many other industries) will be queueing up to demand that the Commission do everything in its power to promote and maintain cross-channel trade.  It’s worth recalling that Ford used to have a commercial vehicle factory, making vans, in Southampton.  A few years ago they closed it and moved it to Turkey – outside the EU.  So never believe the hype that auto makers only come to the UK because we’re in the EU.  Ford decided that they could service the EU market better from a non-EU country than from the UK.

Digby Jones is a former head of the CBI and trade adviser to the then Labour government. He says that after Brexit, we’ll have a trade deal with Brussels in twenty-four hours.  Why?  Because of the enormous commercial benefits to both sides of such a deal, and because of the UK’s strong negotiating position.  We are a huge net customer of the EU.  We buy nearly twice as much from them as they buy from us.  They need us.  And after Brexit, the UK will be the remnant-EU’s largest export customer in the world.  Bar none.

But imagine, if you will, a worst-case scenario, which would be trade as an arms’ length third country with no trade deal.  We should have to pay the duty – the EU’s Common External tariff – on exports into the EU.  WTO rules mean that they could not increase those rates, or seek to “punish” the UK with inflated duties.  In this case, the annual duty payable on those exports would be around £3½ billion.  That’s way less than half our net annual budget contributions.  Even in these simplistic, worst-case terms we are Better Off Out.

But of course we will have a free trade agreement, because it is in the overwhelming economic interests of both sides to have one – and even more in their interests than ours.

So every time the europhiles bang on about the importance of the Single Market, we have to put them right, because they simply don’t know what they’re talking about.

 

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12 Responses to Simplistic Soundbites: Single Market

  1. B Hough says:

    Why would any prime minister of a country be in fervent favour of handing the major decisions for the running of his country over to another power?
    I can only assume it is for his own personal gain at some later stage as with other prime and senior ministers in the past.
    I also note that no mention is made on the media about the annual cost of our membership, this would be quite a blow to the loafers that I see in the Euro parliament, since it may, if we leave, lead to either pay cuts or loss of cushy jobs for some of them.
    I am proud to say that UKIP members of this EU are patriotic enough to be willing to sacrifice this for their country.
    We do not control fully our borders, our power industry, our health and safety rules, our climate commitments, our overseas aid etc. etc. etc.
    I only hope that the SNP don`t use this as an excuse for another referendum on Scotland.
    How would they cope with getting all the immigration numbers problems, the payment to the EU, and everything that goes with it on their own?
    If we remain a member the future will most likely see the end of our Royal Family, the end of our special relationship with America, and total reliance on German & French industry for just about everything we need to meet the rules that the EU dictate to us.
    Our governments also adheres to everything the EU policy makers decide on, notice not the EU parliament, they only follow instructions from the select few of a higher power, whover they are?

  2. John Poynton says:

    Wee done, Roger. This is perhaps the single most important myth we must debunk. You may also like my post at https://jepoynton.com/2015/09/24/why-the-single-market-is-a-bad-idea

  3. Terry Knight says:

    I totally agree: Roger Bootle’s article gave me a new perspective on the Common Market, which surprised me. As a long-standing anti-EU advocate and a UKIP member for nearly 16 years, I thought that I understood all the pros and cons. However, it was the section that said “the single market’s advantage to us derives, not from the fact that we are in it, but rather from the fact that they [the other 27 EU states] are in it”. His analysis is brilliant and also emphasises the danger to the Out campaign if the Remain campaign’s soundbites go unchallenged, as our Roger is valiantly doing.

  4. Jane Davies says:

    I’m at a disadvantage, not living in old blighty at the moment, so forgive my ignorance but I really hope all the points above are being strenuously put across on all the media available. I’m hearing on the news here in Canada that UKIP is the “UK party that is against immigration” and I have to say if I hear Nigel talk about the Australian points system yet again any time soon I will implode. I know the constant airing of his comments on video are out of his control but it’s all we seem to hear about here across the pond!

    • Ex-expat Colin says:

      Lucky you…I live in a region of Germany called England…or will be fairly soon. Amazing really, having lived in Germany I never detected a need for them to want this troublesome dump! Perhaps more strikes might put them off, as that was the style here earlier on. Oh…illegal immigrants won’t want strikes will they…and the rest!

  5. Alan Wheatley says:

    Re the “worst case scenario”, if we had to pay the EU’s external tariff to export to them, then would not they have to pay the same tariff to export to us? Given the trade imbalance, is that not plus 3.1/2Billion to us?

    • Ex-expat Colin says:

      One thing is for sure and not debated is that the VAT/Duty charges will likely fly off the handle for individuals on Brexit. Unless of course somebody of influence somewhere chops this kind of taxation. Protectionism….not adequately debated.

      The EU at present is a borders tax mess. Spain and the Canaries I think is but one. The Isle of Man and the Channel Islands. Think the word is inconsistent for the ordinary man/woman or gender between. Had to be inclusive there.

  6. Ex-expat Colin says:

    Somewhat worrying the other day was that the US military are about to quadruple their military spending in Europe. Its that Russia thing….what else?

    That alone tells me that the Govt (EU) is way past its remit. So, yes its about the right time to dump Trident…sensible stuff on the surface but completely confused in reality. All the wrong signals from each and every direction.

  7. catweazle666 says:

    How are Airbus going to explain the billions of euros’ worth of contracts they’ll have to renege on when they cant buy RR engines from Derby or wings from Filton?

  8. Ex-expat Colin says:

    H/T Old Holborn:
    “Guy Verhofstadt ALDE – would be a huge mistake if UK left the EU. Britain is a dwarf – Belgians are, we know – but Britain will find out”.

    unter das Vierte Reich…..its a whole bunch of dwarves!

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