“Brexit means Brexit”. But what does that really mean?
As we face the greatest economic challenge of our lifetimes in withdrawing from the European Union, we are also likely to see the unravelling of one of the biggest lies of the Leave campaign: that the UK could retain every benefit of the Single Market whilst at the same time not fulfilling its four key freedoms of movement in goods, services, capital and people.
Much discussion has been had in Wales over recent days around how the UK should continue its relationship with the Single Market.
Taking into account what happened in the weeks leading up to the referendum and the messages given to politicians when we spoke to voters on the doorstep, there are no easy answers. Clearly, immigration and the wish of people to “take back control”, were two of the key factors that delivered the vote to leave the EU. Equally, unrealistic expectations were fed by Boris Johnson, Michael Gove and others who claimed we could have our cake and eat it when it came to exactly what the end game of Brexit will look like.
There are three main Single Market options on the table and it is worth exploring each one in turn.
Firstly; ”full membership” of this single market, which no country outside of the EU has, is what we have now with tariff free trade, an active role in its decision making processes and an acceptance of the free movement of people to go with it. No other country in Europe has managed the task of securing full membership whilst simultaneously creating its own pick and mix menu of key commitments. Cherry picking parts of the existing deal and undermining the fundamental principles of the EU in the process is unlikely to go down well in the European Parliament nor with the other 27 Member States who have to agree with this deal.
Leading EU figures have already been crystal clear. Jean-Claude Juncker, President of the European Commission confirmed this when he said: "There is a clear interlink as we made clear at the very beginning between the access to the internal market and the basic principles of the internal market - namely the free movement of workers and we are sticking to that position. So I cannot see any possibility of compromising on that very issue.”
Secondly, there is what is termed as “full access” to the Single Market which could also be described as the Norway or Switzerland option whereby we could trade freely in goods (though not services) but remain unable to restrict EU migration into the UK. The drawback, of course, is that we would be paying into the system and living by rules set by other countries and yet, not have any say on what those rules are or how the Market will operate.
Similarly, negotiating an exit deal that leaves us with something almost identical to what we had before, is not going to be popular with the 52% of the electorate who voted to leave.
This is the difficult and unedifying dead end that the UK Government finds itself in the position of having to resolve.
Finally there is simply “access” to the Single Market and this is the basic “take it or leave it” option. Essentially, having access to the marketplace in the same way that every other country around the world does, leaving us open to the imposition of tariffs on our goods as well as other restrictions and regulatory burdens to which we would not be able to influence at all. A Free Trade Agreement (FTA) or World Trade organisation (WTO) deal would exclude services which make up 80% of our economy and probably agriculture and fisheries, putting these sectors in peril.
Politics is not just about catch phrases or sound bites, it is about finding a way to get the best for the people you serve.
I would prefer the UK to have full membership of the EU as any other deal will be a worse option but this clearly would require a second referendum.
Full access is not perfect but given the terms upon which the public made their decision, it is the most realistically achievable deal.
Any agreement will stand or fall on its approach on EU migration which, let’s not forget is a two way street with almost as many UK citizens now residing in other Member States as EU citizens living here. An attack on the free movement of people would also jeopardise the rights of those from the UK who have chosen to study, work or live elsewhere in the EU, again, a vital question which the UK Government has continued to avoid answering. It is also the case that migrants from the EU to the UK pay one third more in tax than they take out in benefits and enable us to sustain key public services, including the NHS, and many sectors of our economy. The problems with the UK economy and feelings of disenchantment felt by voters is not because of immigration, it is down to austerity policy which led to insecure jobs, a lack of housing and poor services.
The pressure is on and the clock is ticking.
Now is the time for politicians of all parties to be honest with voters. They must admit we can maintain the benefits of being part of a huge single market but that entails paying into the EU budget and accepting the rules including free movement. Or we can leave the single market and damage our economy and peoples living standards.
A second class Brexit deal, and perhaps, the prospect of no real deal at all, will cause great damage to the Welsh economy and our way of life. A false step at this stage has the potential to wreak havoc on our manufacturing industries (especially steel, agriculture and automotive), discourage inward investment, damage our tax base and, with that, our ability to invest in our public services.
The UK Government and all politicians must quit the rhetoric and be honest with voters about the options.