Does Brexit really mean leaving the single market?

This article originally appeared on United Politics on 05/12/2016

“Brexit means Brexit.” If there’s one soundbite that exemplifies Theresa May’s premiership thus far it’s that. Once a reassuring riposte to those that seek to subvert our democracy by ignoring the referendum result, or in true EU fashion, making us vote again until we get the ‘right’ answer, it has quickly become a source of frustration. Yes, Brexit must mean Brexit, but what exactly does that entail, besides an increasingly infuriating ouroborus-like argument?

Different leave voters checked that particular box for varying reasons, and varying priorities. Although Brexit does indeed mean different things to different people, there are a few broad areas almost all Brexiteers agree on. We wish to repatriate our trade policy and regain the freedom to strike trade deals with whomever may want one. We wish to see an end to the jurisdiction of the European Court of Justice over UK affairs. We wish to have far greater control over immigration than we currently enjoy, and we wish to see an end to obligatory EU budget contributions.

The main point of contention it seems is whether or not we can achieve these various goals by remaining in the single market, otherwise known as the European Economic Area (EEA). This debate is an incredibly important one and has been completely undermined by an unholy combination of hard-headed Brexiteers, Remainers in denial, and clueless politicians.

One point of confusion is the difference between the EEA and the customs union. Far too many politicians and commentators are either wilfully conflating the two or are completely unaware of the differences, or even who is involved in each one.

It’s now been five months since the referendum result, and over a year and a half since the Tories won the general election thus ensuring that a referendum was coming. Despite this, only last week the Guardian has incorrectly reported that Switzerland is a member of the EEA and the BBC erroneously asserted that members of the single market cannot strike their own trade deals. It is no wonder confusion is the order of the day when our media is so woefully uninformed.

Switzerland of course, whilst a member of the European Free Trade Area (EFTA) is not a member of the EEA, and instead has a series of bilateral trade deals with the EU. Meanwhile the remaining EFTA members, Norway, Iceland, and Lichtenstein, are also members of the EEA, yet remain outside the customs union. This gives them maneuverability in pursuing their own trade agreements with the rest of the world.

There is an assumption amongst some politicians that remaining in the customs union is essential to ensure that barriers to trade and customs checks are not erected between the UK and the EU. This too is wrong. The customs union, following the signing of the Treaty of Rome was fully established by 1968, yet internal border checks between member states were still commonplace until the 1980s.

It was the establishment of the single market, and the signing of the Single European Act in 1985, that eliminated these internal border checks, and thus continued EEA membership, not participation in the customs union, is what ensures smooth trade post-brexit.

Furthermore, it is not the customs union that limits our ability to pursue our own trade deals, but rather the EU’s common commercial policy. It is possible to remain in the former and outside the latter, as these areas are covered separately in the Treaty of the Functioning of the European Union (TFEU) by Articles 28 and 206/207 respectively, and therefore not reliant on each other.

Turkey of course has an arrangement of this nature, participating in the customs union whilst remaining outside the EU, and having the freedom to pursue it’s own trading arrangements with third parties. Rules Of Origin regulations mean that the duty is collected once the goods move to another member of the customs union.

But this scenario, post-Brexit, would merely serve to add further complications when negotiating trade deals elsewhere. With internal customs checks covered by the single market, there is no discernible advantage to remaining in the customs union, so leaving it must be a part of Brexit.

Turning to the EEA, much of the misinformation can ironically be traced back to Remain advocates trashing this option prior to the referendum. It was commonplace to hear Remainers, including David Cameron, preface their economic doom-mongering with ‘if we leave the single market…’. It was a cunning strawman argument, and a key part of Project Fear, but ultimately irrelevant.

The false conflation of the EU and EEA was the most erroneous aspect of the entire campaign and anyone who did so was rarely pulled up on it. This dishonesty (as well as the voices seeking to usurp the result) has of course now come back to haunt them as they try to make the case for continued membership of the EEA.

Given that the EEA agreement, to which the UK is a signatory, is separate from the EU treaties, it is entirely possible that even if we reached the end of Article 50 negotiations with no deal, we would still remain members of the EEA. Withdrawal could require the separate triggering of Article 127 of the EEA agreement, which can only be done unilaterally. There is no precedent for a country remaining a member of the EEA whilst not also a member of either EFTA or the EU, but it nevertheless remains somewhat of a legal grey area.

These issues would be best overcome by the UK applying to rejoin EFTA. Whilst a contracting party to the EEA agreement moving from the EU side of the two pillar structure to the EFTA side has yet to be done, Austria, Finland, and Sweden all moved in the opposite direction without the need to reapply to join the EEA. The UK could easily pull the same trick in reverse, assuming the other EFTA states were on board. We should be exploring this alongside Article 50 negotiations, and fortunately there has already been some encouragement from the other members.

On a related note, countries that have joined the EU do not automatically become members of the EEA. They must apply to the EEA to acquire contracting status and ratify the agreement accordingly. These differentiations alone technically means that leaving the EU doesn’t equate to leaving the EEA, but let’s explore it further.

Opposition to the EEA option is predicated, primarily, on the desire to limit immigration and the belief that this can’t be done whilst remaining a member. On the contrary, the precedent set by Lichtenstein demonstrates that members can have quantitative restrictions on freedom of movement whilst remaining party to the EEA agreement. By utilising the safeguard measures set out in Article 112, the principality has limited the number of migrants crossing it’s borders since it joined the EEA in 1995.

Moreover Iceland utilised the same safeguard measures in the wake of the 2008 financial crash to restrict the flow of capital. These instances give lie to the notion that the ‘four freedoms’ are non-negotiable, despite what Merkel and EU officials may assert.

Similarly, remaining in the EEA does not mean continued subordination to the ECJ. As the EFTA site points out: “the EEA EFTA States have not transferred any legislative competencies to the EEA institutions and they are unable, constitutionally, to accept direct decisions by the Commission or the European Court of Justice.” This could not be clearer and should be proof that EEA membership is perfectly compatible with the re-establishing of British sovereignty, the number one issue for Leave voters.

What’s more, arbitration for EEA/EFTA states is conducted by the EFTA Court, and unlike the ECJ, it’s rulings are advisory rather than binding, given the UK further flexibility when it comes to single market regulations.

The EFTA site also describes how EEA/EFTA states take decisions relating to EEA legislation by consensus, rather than by majority vote as in the EU, meaning the UK could have a greater say over single market regulations than it currently does, enjoying a de-facto veto at the EEA Joint Committee.

Coupled with regaining an independent voice and veto on global regulatory bodies such as the WTO, UNECE, Codex Alimentarius and a whole host of other industry specific institutions from which the EU increasingly takes it’s cues, the threat of having no say over the rules is an empty one.

This just leaves the matter of budgetary contributions. As well as having no say in the rules, it was often claimed by advocates of the EU that Norway still paid into the EU budget. Like the ‘no say’ assertion, the ‘still pay’ one is also wildly inaccurate.

Norway’s expenditure relating to the EEA consists of several factors. Firstly there is the ‘Norway Grants’, aid paid by Norway as a form economic rehabilitation of post-Communist countries. There are also the EEA grants, for which Norway currently provides 95% of the funding. Crucially, not a cent of these grants goes into EU coffers.

Norway does participate in several EU programmes, including Horizon 2020 and the Erasmus research programmes, and pays towards the specific budgets for these programmes. These costs though are essentially for services rendered, and nor is the funding one way.

A thorough breakdown of what Norway contributes, and what similar arrangements for the UK would be, can be found here, but scaled up, total UK expenditure with relation to single market participation would equate to around £8billion. This is still a substantial haircut on the £13bn we paid last year.

Hard Brexiteers may cry foul at this, but participation in any market does not come free.
Customs co-operation costs money and the various decentralised agencies that facilitate the free movement of goods across our continent and with our closest neighbours are essential. Any money saved by extracting ourselves from those arrangements would have to be spent on duplicating them here, as well as beefing up our own border and customs controls. This is as nonsensical as it is inefficient.

The point that the likes of Canada don’t pay for access to the market is also a red herring as they do not co-operate in these customs agencies. Both the US and Canada both spend huge amounts of money on customs co-operation with each other to smooth the movement of goods across their border. This is for exactly the same reason the EU does.

Article 50 gives us two years in which to negotiate our withdrawal settlement from the EU. Given the vast complications that have arisen after 40 years of political and economic integration, a bespoke deal cannot be constructed within that time frame. This is why an interim option, maintaining single market membership for the time being, is a sensible one.

The reticence from some Brexiteers for this option is based upon the fear that there would be attempts to keep us in the EU via the back door, rejoining fully further down the line. The egregious attempts to subvert the largest vote for anything in British history is incredibly troubling. The little faith the public has in it’s politicians, and politics in general, would be wiped out with lord knows what consequences, were the likes of David Lammy successful.

This is why we should have a longer term plan, perhaps based on the Swiss model, for our relations with the EU. The beauty of the EEA option is that it gives us the time and breathing room to evolve our position, whilst freeing us up to pursue trade with the rest of the world, reducing our budget contributions and repatriating multiple policy areas including home affairs, employment, justice, foreign, and defence, as well as ditching the appalling Common Agricultural and Common Fisheries policies, ditching ECJ jurisdiction in the process.

The main goals of Brexiteers of all stripes can be achieved whilst remaining in the single market. The confusion stems from the repeated false conflation of the EU and EEA during the referendum campaign by Remainers.

Those that called that nonsense out at the time, now find themselves making the exact same arguments to Brexiteers who are rightly sceptical. They see the same dishonest people who wanted us to remain in the EU, now make similar statements about leaving the single market, against a backdrop of anti-democratic MPs, commentators, petitions and demonstrations calling for the decision to be overturned.

But provided Theresa May’s government continues to honour the referendum decision, we can trigger article 50, leave the EU, and take back control whilst still remaining party to the EEA agreement. Leavers should not characterise this as a betrayal, but as proof positive that Project Fear’s central tenant – that the EU and the single market were one and the same – was as false as they always claimed it was.

A final plea on polling day

Today, Britain will go to the polls and decide whether or not we will leave the European Union. The past few months have been one hell of an interesting affair, with wild claims being bandied about on both sides of the argument. There are few people I pity more than those who have been relying solely on the official campaigns for their information, the level of debate has been almost farcical at times and the media spin on all sides has only muddied the issue further still. Given this, I can understand some people making the argument that it's far too complex an issue to be decided by a referendum and that it should be down to our elected representatives to decide. That said, the reason we are having a referendum in the first place is because our elected representatives have ceded power and sovereignty to the EU over the last four decades without once consulting the public, be that in a referendum or making explicit manifesto pledges to do so at a general election.

Fortunately we live in the age of the internet. Of smart phones and social media. This has made it easier to proliferate some of the more questionable claims from both camps, but equally has also made it easier to counter them. Whilst I have been blogging here about the various reasons for leaving as I see them, as well as trying to counter some of the misinformation propagated by both campaigns, I've also spent an inordinate amount of time on social media making the case for a progressive Brexit and countering any misconceptions I've come across. It's felt a little like beating my head against a wall at times (if I see the 'still pay, no say' fallacy about the Norway option one more time I shall need to be escorted to a room with cushioned walls wearing a jacket with extra long sleeves) but by and large the debate has been overwhelmingly civil and some have said that I've helped them understand things they were previously unsure about. It's been humbling, I'm by no means an expert, but I've done as much reading as I can (often hiding out during my day job to peruse articles on global regulatory mechanisms and the various characteristics of the EEA agreement), I feel I've learnt a lot, and I've tried to make a positive, informed case. Before we go to the polls, allow me to briefly summarise it for you.

The EU is an outdated construct. It was formed in an era when trade blocs seemed to be the way forward. But in the modern age of globalisation and the internet, geographical proximity has never mattered less for trade. There is a global single market emerging, with a whole host of regulatory bodies that we do not have an independent vote and veto on thanks to the EU, and indeed our position is often undermined because of our membership. As the 5th largest economy in the world, and using our ties to countries across the globe to build coalitions, we could wield significant influence in the shaping of trade regulations before they get anywhere near the EU, and push for regulatory harmonisation at a global level, facilitating free trade across the world. Freed from the confines of the common external tariff, we can pursue trade deals with the rest of the global markets that are growing exponentially, the benefits of which will be reaped both at home, and world wide. Offering free trade to African farmers for example, will help push down food prices here whilst allowing them to export their way out of poverty, rather than leaving them impoverished by virtue of being unable to compete with European farmers, thanks to the tariffs the EU places on their goods. By removing ourselves from the tariffs the EU imposes on Chinese solar panels, we can more effectively and more cheaply pursue greener energy sources here at home, again driving down the cost of living. Engaging with the world gives us a myriad of these possibilities.

Not that we have to choose between the EU and the world. Because Article 50 only allows for two years in which to negotiate a deal to leave, the only feasible route out is the so called 'Norway option'. This step to the EEA via EFTA maintains full access to the single market, and ensures an economically neutral exit, and a secure platform from which to start disentangling ourselves from the EU. Brexit is a process, not an event, and we cannot undo 40 years of political integration overnight. Contrary to what the Remain side will tell you, this does not mean that we still pay without having a say over the rules. The EEA agreement itself disproves this:

"According to the principle of unanimity applied in the EEA Joint Committee, all the EFTA states must agree in order for new EU legislation to be integrated into the EEA Agreement and for it to apply to cooperation between the EFTA states and the EU. If one EFTA state opposes integration, this also affects the other EFTA states in that the rules will not apply to them either, neither in the individual states nor between the EFTA states themselves nor in their relations with the EU. This possibility that each EFTA state has to object to new rules that lie within the scope of the EEA Agreement becoming applicable to the EFTA pillar is often referred to as these parties’ right of veto.

So far, this right has not been exercised. This is partly because when EU legislation is to be integrated into the EEA Agreement it is submitted to the EEA Joint Committee at the final stage of an extensive process of information and consultation between the contracting parties. The purpose of this process is to ensure that agreement is reached on such decisions. During the negotiations on the EEA Agreement, compromises were found if a state had constitutional objections to the content or could invoke fundamental national interests. Even though constitutional problems are unlikely to arise in the day-to-day EEA work, the will to reach necessary compromises must still be regarded as a basic condition for cooperation." So Norway is consulted regularly via the EEA Joint Committee on any regulations pertaining to the single market and even has access to the EFTA veto.

Nor are their payments anything like as much as ours. Norway's expenditure relating to the EEA consists of several factors. Firstly there is the 'Norway Grants', aid paid by Norway as a form economic rehabilitation of post-Communist countries. These amounted to around €804 million from 2009 to 2014. Most importantly, this money is not paid to the EU.
There are also EEA grants, for which Norway provides 95% of the funding. This brings the total to €1.8 billion for that 5 year period. EFTA contribution to EU programmes affecting the EEA amounted to €1.7 billion, with Norway providing roughly 96% of the cost. Norway also participates in several EU programmes, including Horizon 2020 and the Erasmus research programmes, as well as participating in 26 EU agencies, relating to health, research, and education amongst others.

Norway's contributions are the price paid for a service, and funding is not one way. Norway's net contribution over the period was €620 million, or €90 million per year. Applying this on a pro-rata basis to the UK upon rejoining the EFTA, we would contribute approximately €2.5 billion a year. A large part of this would be for continued participation in many of the same programmes and agencies that we currently enjoy. Finally Norway pays roughly £7 million a year towards the EFTA budget. The UK's contribution in total then, on a pro-rata basis, would be roughly £2.36 billion a year. A saving of nearly £6 billion a year on our current contributions. So whilst being a member of the EEA does involve costs, it still represents a potential 75% haircut on our current financial obligations.
The EEA agreement does maintain free movement - something I'm inherently in favour of, and would like to see an independent UK sign more free movement accords with other countries - but it does offer greater protections than we have now. Article 112 of the EEA agreement gives us access to an 'emergency brake', and Lichtenstein, through various protocols and addendums to the EEA agreement, have set a precedent for quantative restrictions on free movement. Moreover, pursuing independent policies outside of the EU, gives us greater scope to address the push factors that ultimately contribute more to migration.

Leaving the EU does not mean turning our back on Europe. We will still continue to trade with our neighbours on the continent, and co-operate with our friends and allies to tackle the challenges we all face. But we can do so as an ally, as an equal, not as a subordinate to a supranational institution that itself is pursuing all the trappings of statehood. Because make no mistake, the EU is not standing still. The Five Presidents report explicitly sets out future plans for further political and economic integration, including common EU taxation and harmonisation of welfare systems. Even if you believe that Cameron's opt out of 'ever closer union' is meaningful, the only consequence will be increasing marginalisation within an EU pushing forward with federalisation. As the EU expands, welcoming new countries into it's ranks, our influence will be diluted further still. We are on two fundamentally different paths. Far better to get out now and work alongside the EU as a constructive partner.

But ultimately, the economic arguments, and debate about immigration are secondary to the one of democratic accountability. The EU Commission is the sole legislative arm of the EU, and we do not elect the people that comprise it. There's a fundamental democratic principle that laws should not be passed nor taxes raised except by our elected representatives. At the EU level they would be our MEPs but they have no power to introduce, nor repeal legislation. That is the sole purview of the Commission. There are those that argue that we should stay inside the EU and seek to reform it. I admire their optimism, but even when faced with the potential exit of one of it's most important members, it refused to offer any meaningful concessions. Only yesterday Jean Claude Juncker has said that: "British voters have to know there will be no kind of any negotiation. We have concluded a deal with the prime minister. He got the maximum he could receive, and we gave the maximum we could give, so there will be no kind of renegotiation." I don't see how that can be any clearer. The EU just does not do reform. By restoring the supremacy of the UK parliament we have the chance to reinvigorate our democracy. Our government will no longer be able to shrug at a problem and say it's out of their hands, they will have to get to the real business of actually governing us. Knowing that their votes count for more, people will begin to engage once again. One of the positives of this referendum is just the sheer number of people who appear to be engaged with the issue. If it matters, people will care. Leaving the EU could be the first step in revolutionising our democracy. There is an appetite as a result of this referendum, for greater democratic control and we can tap into that and pursue real reform, in the way we elect our representatives, in the make-up of the House of Lords, and beyond.

Far from being an inward looking, isolationist choice, Brexit is the outward, global option. It has the potential for us to pursue a truly global agenda, pushing for real change both at home and on the world stage, and most importantly, it gives us the ability to vote for a government that will do it. Vote Leave.

Why Vote Leave - Part 7: Costs

In the run up to the referendum I intend to post a blog each Sunday detailing the reasons why Britain will be better off outside the European Union. These posts will cover the following topics: the economy, influence, democracy, security, the environment, cost, and reform.

One of the most prevalent issues pertaining to the UK's membership of the EU is the cost of that membership and whether or not it represents good value for money. This debate has been muddied exponentially between the various use of gross and net figures, the amount of EU expenditure in the UK, the fact that as a net contributor we fund that expenditure, the cost of regulation, what's seen as EU waste and so on. It's difficult therefore to cut through the hyperbole and come to a conclusion as to whether the vast sums we send each year to Brussels constitute value for money.

Let's start with UK budgetary contributions. Vote Leave's headline grabbing figure of £350 million a week is only partially accurate. It is based off of the UK's gross contribution to the EU budget which, last year, was £17,8 billion. However, this does not take into account the UK's rebate, worth £4.9 billion last year, or public sector receipts worth a further £4.4 billion. So the actual cost of UK membership in 2015 was £8.5 billion. This itself is no small sum, but it's indicative of Vote Leave's incompetence that they opted for the gross figure, leaving themselves open to accusations of being misleading, rather than the net figure which few would argue was inconsequential. The UK's net contribution to the EU budget for the period of 2009 to 2014, taking into account rebates and receipts, was £48.6 billion.

So whilst Vote Leave's figure is somewhat misleading, there's no denying that we are a substantial contributor to the EU budget.

Now, opponents of the Norway option claim that despite not being in the EU, Norway still pays around the same for access to the single market. This is just as inaccurate as Vote Leave's £350 million claim, if not more so. Norway's expenditure relating to the EEA consists of several factors. Firstly there is the 'Norway Grants', aid paid by Norway as a form economic rehabilitation of post-Communist countries. These amounted to around €804 million from 2009 to 2014. Most importantly, this money is not paid to the EU.

There are also EEA grants, for which Norway provides 95% of the funding. This brings the total to €1.8 billion for that 5 year period. EFTA contribution to EU programmes affecting the EEA amounted to €1.7 billion, with Norway providing roughly 96% of the cost. Norway also participates in several EU programmes, including Horizon 2020 and the Erasmus research programmes, as well as participating in 26 EU agencies, relating to health, research, and eduction amongst others.

Norway's contributions are the price paid for a service, and funding is not one way. Norway's net contribution over the period was €620 million, or €90 million per year. Applying this on a pro-rata basis to the UK upon rejoining the EFTA, we would contribute approximately €2.5 billion a year. A large part of this would be for continued participation in many of the same programmes and agencies that we currently enjoy. Finally Norway pays roughly £7 million a year towards the EFTA budget. The UK's contribution in total then, on a pro-rata basis, would be roughly £2.36 billion a year. A saving of nearly £6 billion a year on our current contributions. So whilst being a member of the EEA does involve costs, it still represents a potential 75% haircut on our current financial obligations. Especially with news today that the EU could well be looking to increase our contributions after a Remain vote.

But it's not just the UK's contributions to consider when evaluating how the EU handles it's finances. The EU itself is extremely wasteful, and incredibly opaque when it comes to it's expenditure. Take for example MEP's expenses. European Parliament members can garner huge sums, tax free and without proper scrutiny, on top of their £60k salary in the form of grants and allowances. This doesn't even take into consideration the amount that can be claimed in expenses.

Then there's the travelling circus that once month sees the European Parliament decamp from Brussels to Strasbourg at a cost of around £130 million. This includes loading 5 trucks up full of plastic trunks, that once contained files and papers, but have now been rendered obsolete by email and the internet. It's a perfect example of the EU's general inertia and reluctance to reform it's procedures.

So not only will leaving the EU mean we will pay significantly less for market access, whilst still having - arguably a larger - say over the rules, it will also mean that we can spend money much more wisely, giving greater value to taxpayers.

The Government's EU Leaflet Dissected.

I finally received the Government's pro-EU leaflet today (our delivery was postponed here in Wales so as not to interfere with the Welsh Assembly elections). I've already admonished the sending of this leaflet, but this post will take a look at each of it's claims. I must admit that the earlier description of this pamphlet as propaganda may have been somewhat hyperbolic but having read it, it's actually spot on. It's entirely one sided and is often more notable for the information it omits, rather than that which it claims to provide. Regardless, let's get started:

Page 1 - An important decision for the UK

"On Thursday, 23rd June there will be a referendum. It's your opportunity to decide if the UK remains in the European Union (EU).

It's a big decision. One that will affect you, your family and your children for decades to come. 

The UK has secured a special status in a reformed EU:

- we will not join the euro

-we will keep our own border controls

- the UK will not be part of further European political integration

- there will be tough new restrictions on access to our welfare system for new EU migrants

- we have a commitment to reduce EU red tape

The Government believes the UK should remain in the EU.

This leaflet sets out the facts, and explains why the Government believes a vote to remain in the EU is in the best interests of the people of the UK. It shows some of the choices the UK would face if there were a vote to leave.

If you would like further information, please visit the Government's EU referendum website at EUReferendum.gov.uk"

It starts off well, each of the 4 opening sentences are entirely factually accurate. Sentence 5 however is where it starts to fall down. The myth of the UK's 'special status in a reformed EU' is presumably based on Cameron's renegotiation, though it's curious that this renegotiation isn't mentioned specifically anywhere within this leaflet. Cameron's renegotiation goal was pitiful in scope, and the PM achieved even less than that. What meagre reforms he did manage to get an agreement on, have yet to come into effect and - despite lying to parliament about it - are not legally binding. 

The UK not joining the euro is a given. That's an option that we've had since the Maastricht Treaty in 1992, and despite some Europhiles thinking, inexplicably, that it would still be in our long term interests to join at some point, a political party's chances of getting the support of the electorate with that on their manifesto are akin to a cat's chances on the River Styx.

We do indeed keep our border controls, but this in no way exempts us from the freedom of movement that is a necessary part of our EU membership. It's technically true, but is clever wording, omits the fact we're still subject to freedom of movement laws, and is pure spin. A reoccurring theme throughout this pamphlet.

I'm not entirely sure what the claim that the UK will not be part of further integration is based on. Again, it could be alluding to Cameron's claim to have secured an opt-out of 'ever closer union' during his renegotiation, but as these 'reforms' are not legally binding, and amount to nothing more than the tweaking of some wording anyway, it's an entirely fatuous claim. Similarly the 'tough new restrictions' on migrant welfare claims are dependant on the sham renegotiations, and the commitment to reduce red tape is something the EU has been saying it will do for years and yet hasn't managed to do so.

The claim that this leaflet sets out the facts is as accurate as a claim, were it to make one, that it is in fact a banana.




Page 2 - A stronger economy

"The EU is by far the UK's biggest trading partner. EU countries buy 44% of everything we sell abroad, from cars to insurance. Remaining inside the EU guarantees our full access to it's single market. By contrast, leaving creates uncertainty and risk.

The EU's Single Market has over 500 million customers and an economy over five times bigger than the UK's. The Single Market makes it easier and cheaper for UK companies t sell their products outside the UK, creating jobs as a result.

Being inside the EU also makes it more attractive for companies to invest in the UK, meaning more jobs. Over the last decade, foreign companies have invested £540 billion in the UK, equivalent to £148 million every day."

This section, like every argument about the economy when it comes to our EU membership, wrongly conflates that membership with access to the Single Market. It is not necessary to be a member of the EU in order to have access to that market, which runs from non-EU Iceland to non-EU Turkey, encompassing every European country bar Belarus and Russia.

It's true that 44% of our exports go to the EU. It's also true that ten years ago this was 55%. Our exports to the EU are declining whilst our exports to the rest of the world are growing, though of course the leaflet neglects to mention this fact. This is precisely why, in a time when globalisation is only increasing, we should leave the EU and rejoin the top tables of world trade. Shackled as we are to the EU's declining share of global commerce, we cannot fully engage on the world stage where our economic growth will come from. I've already expanded on this point in a previous post.

Maintaining access to the Single Market whilst freeing ourselves up to pursue trade agreements elsewhere means that that £540 billion of foreign investment could increase exponentially. This is why I, and many others, advocate the EEA via EFTA exit route, genuinely affording us the best of both worlds.

Page 3 - Improving our lives

"Cost of living

If the UK voted to leave the EU, the resulting economic shock would put pressure on the value of the pound, which would risk higher prices of some household goods and damage living standards.

Losing our full access to the EU's Single Market would make exporting to Europe harder and increase costs.

Travel abroad

Millions of UK citizens travel to Europe each year. The EU has made this easier and cheaper.

EU reforms in the 1990s have resulted in a drop in fares of over 40% for lower cost flights.

From next year, mobile phone roaming charges will be abolished across the EU, saving UK customers up to 38p per minute on calls.

EU membership also gives UK citizens travelling in other European countries the right to access free or cheaper public healthcare.

Some argue little would change if we left the EU. But there are no guarantees UK customers would keep these benefits if we left."

Once again, the leaflet conflates EU membership with access to the single market, leaving the EU using the Norway model as an interim measure negates any possibility of economic shock. Though were there a weakening of the pound this would make UK exports more attractive thus somewhat negating the 'harder to trade outside' argument. As for the higher prices of household items, this is pure speculation again. What isn't speculation is that, thanks to the Common Agricultural Policy, food prices within the EU are roughly 17% higher than they otherwise would be under market conditions. The EU is not just a free trade area but a protectionist customs union. The high tariffs it places on imports from outside the market, keep African farmers (for example) from exporting their produce to Europe at a competitive rate, keeping them impoverished and our food prices higher.

It's true that the EU has made it easier to travel between the continent's various nations, though there is no need to be in political union in order to achieve this. Visa-free arrangements between nations have existed for far longer than the EU has and there is no reason why, outside the EU, we could not seek similar arrangements with our allies across the world. Some have even speculated on a free trade area with free movement in the Anglosphere.

The reduction in flight costs across the continent is down to the Single European Sky initiative, which includes the 28 EU nations as well as non-EU members such as Norway and Switzerland, and is also observed by other nations such as Egypt, Tunisia and Albania. The suggestion that leaving the EU means a hike in air fare then, is nonsense.

As I discussed in an earlier blog post, the removal of mobile roaming charges is down to global initiatives instigated by the International Telephone Users Group and the OECD, not the EU. Far from an argument for continued EU membership, the fact that such regulations are being increasingly made at a global level indicates the importance of our leaving in order to shape these regulations at the top tables before they are implemented by the EU. Furthermore, these being global regulations means that these benefits are indeed guaranteed in the event of a Leave vote.

The European Health Insurance card actually doesn't offer as many benefits as traditional travel insurance, and anyone who has been on holiday to a non-EU country knows that getting such insurance isn't quite as taxing as performing cranial surgery. Though once again, the EEA/EFTA option keeps this benefit in place.

Page 4 - What happens if we leave?

"Voting to leave the EU would create years of uncertainty and potential economic disruption. This would reduce investment and cost jobs.

The Government judges it could result in 10 years or more of uncertainty as the UK unpicks our relationship with the EU and renegotiates new arrangements with the EU and over 50 other countries around the world.

Some argue that we could strike a good deal quickly with the EU because they want to keep access to our market.

But the Government's judgement is that it would be much harder than that - less than 8% of EU exports come to the UK while 44% of UK exports go to the EU.

No other country has managed to secure significant access to the Single Market, without having to:

- follow EU rules over which they have no real say

- pay into the EU

- accept EU citizens living and working in their country

A more limited trade deal with the EU would give the UK less access to the Single Market than we have now - including for services, which make up almost 80% of the UK economy. For example, Canada's deal with the EU will give limited access for services, it has so far been seven years in the making and is still not in force."

As I've already stated, leaving the EU via the EFTA/EEA route eliminates any uncertainty and 'potential' economic disruption. Though it's worth mentioning that Article 50 of the Lisbon Treaty states that any member state leaving the union enters a period of negotiation lasting two years. So where the Government has pulled the '10 years (of uncertainty) or more' from I confess I haven't the foggiest of ideas. Any negotiations post-Brexit would need to be completed as quickly as possible to minimise any economic disruption, both to the UK and to the EU. The eurozone is still pretty much stagnant, whilst the UK economy is growing so both sides will be keen to minimise any economic disruption caused by Brexit. This incidentally, is another argument in favour of the Flexcit model.

The leaflet tries to downplay the importance of the UK to the European economy by contrasting the 44% of UK exports (down from 55% a decade ago you'll recall) to the 8% of EU exports to the UK. That 8% that the Government so summarily dismisses is equivalent to somewhere in the region of £60 billion a year. With Greece crippled and in danger of losing it's debt relief, and Italy on it's knees, the EU cannot afford to take a hit of that size by engaging in a trade war with a post-Brexit UK. Both sides will want to secure trade arrangements quickly, regardless of the figures involved.

The text in bold is an attempt to refute the so-called 'Norway option' that I've advocated elsewhere in this post, however it is again misleading due to it's omission of crucial information. The claim of having no say over the rules of the single market in this instance is entirely false. Norway does in fact have input into the rules and regulations of the EEA, but this is increasingly inconsequential. EU regulations are increasingly decided by global trading bodies that Norway has access to. The UK is subject to EU collectivism at these top tables of global trade and so ultimately has less say over the rules. There is an emerging global Single Market in which the EU is an increasingly redundant middleman. We should be taking a lead role in the formation of these regulations, not having our influence undermined by the EU.

Of course, it's worth mentioning that Norway actually only adopts 9% of EU legislation, according to the EFTA Secretariat. For non-EU, single market accessing Switzerland it's precisely 0%. They have to abide by those regulations when exporting to the EU of course, just as they must abide by Indian regulations when exporting to India, yet not having a say over those rules doesn't stop it being the Swiss' second largest export market after Germany.

Norway does not, as the leaflet claims, 'pay into the EU'. It does participate in various EU schemes voluntarily which it pays into, as any intergovernmental scheme would require. However, this is more likely a false conflation of the EEA grants to which Norway is a party, with the UK's own EU membership fee. This money does not go to the EU. You can read more about it here.

Finally on this section, the Government implies that there is a Single Market for services, which there isn't, and then goes on to say that Canada's deal with the EU has limited access for services despite not yet being in effect after seven years of negotiations. Why the failure to secure a comprehensive trade agreement after seven years is an argument for EU membership I haven't the faintest idea.




Page 5 - Controlling immigration and securing our borders

"Securing our borders

The UK is not part of the EU's border-free zone - we control our own borders which gives us the right to check everyone, including EU nationals, arriving from continental Europe.

Immigration

The Government has negotiated a deal that will make our benefits system less of a draw for EU citizens. In future, new EU migrants will not have full access to certain benefits until they have worked here for up to four years. The Government will have greater powers to take action where there is abuse of our immigration system.

Some argue that leaving the EU would give us more freedom to limit immigration. But in return for the economic benefits of access to the EU's Single Market, non-EU countries - such as Norway - have had to accept the right of all EU citizens to live and work in their country.

Keeping us safer

EU membership means UK police can use law enforcement intelligence from 27 EU countries, and will have access to fingerprint and DNA information.

EU cooperation makes it easier to keep criminals and terrorists out of the UK. Since 2004, using the European Arrest Warrant, over 1,000 suspects have faced justice in UK courts and over 7,000 have been extradited."

Again the Government asserts that we control our own borders meaning we have the right to check everyone who arrives, which is true, but doesn't state that we have no right to refuse any EU nationals entry, as is the case.

I've already covered how the Government's renegotiation is a sham and not legally binding so I won't flog that particular deceased equine any more. What can be said however, is that the restriction to in work benefits for EU migrants is such a minor issue that I genuinely can't think of single person, including the most Kippery of Ukippers mentioning it before Cameron made it the flagship goal of his pitiful new deal. As has been well documented, immigration into this country, leaving aside the social aspects for the moment, has been of huge benefit. Migrants take out far less than they put into the system. Moreover, the stronger UK economy and (now even higher) minimum wage act as infinitely stronger pull factors than any in-work benefits migrants may or may not be eligible for. What the 'greater powers to take action where there is abuse of our immigration system' are, I'll be damned if I know. It takes the, hotly contested title, of most unqualified statement within the leaflet.

The European Arrest Warrant is a spectacularly illiberal piece of legislation, allowing for the deportation and imprisonment of citizens without due process. Take the story of Andrew Symeou for example, wrongly extradited to Greece on suspicion of murder to spend a year in a maximum security prison before being cleared of all charges. You can read a more detailed explanation of the problems with the EAW here. Moreover, this fails to acknowledge the role Interpol plays in the cross-border policing of crime. There's also a conspicuous absence of any mention of cross border intelligence sharing. This is presumably due to the ineffectiveness of  the EU's own intelligence service, and the important role that non-EU institutions such as the Five Eyes intelligence sharing service has played in countering international terrorism. There's also no mention of the role NATO has played in securing peace on the continent, something else often falsely attributed to the EU. The EU's freedom of movement rules have also been criticised for facilitating terrorism on the continent.

Page 6 - The benefits of EU membership

"The UK is part of the EU, a group of 28 countries which exists to promote economic security, peace and stability. The EU operates as a single, free-trading market, without taxes between borders.

The UK has secured a special status in the EU. The UK has kept the pound, will not join the euro and has kept control of UK borders. We have ensured that no UK powers can be transferred to the EU in the future without a referendum. The UK will keep full access to the Single Market, with a say on its rules. For every £1 paid in tax, a little over 1p goes to the EU. The Government judges that what the UK gets back in opportunities, job creation and economic security from EU membership far outweighs the cost.

Opportunities for you and your children

EU membership means you and your family have the right to live, work or study abroad in any of the 27 other member countries. It also guarantees many employment rights.

The UK as a leading force in the world

The UK is a strong, independent nation. Our EU membership magnifies the UK's ability to get its way on the issues we care about. EU action helped prevent Iran from obtaining nuclear weapons; and the EU is leading the world on tackling climate change."

Once again we are given the 'special status' myth as well as the disingenuous statement of controlling our borders. We have indeed kept the pound, going against the advice of many of the same people who are currently advocating for our continued EU membership. As I've mentioned, taking the EFTA/EEA route out of the EU ensures we maintain full access to the single market, giving us a say over EEA rules, a right of reservation on the implementation of those rules, and crucially, a say in the formation of those rules at the global level before the EU sets about implementing them. As for cost Norway's EEA grants and so on amount to £134 per head per annum. The UK figure is £252, meaning the EFTA/EEA route offers the same benefits whilst potentially offering a substantial saving in fees. The freedom of movement of UK citizens would also be maintained by the Flexit model. 

Employment rights, like many, many others, are guaranteed by a plethora of ILO conventions to which the UK is a signatory. This is yet another example of regulations being made at the global, not EU, level.

The UK is indeed a strong nation, we're the 5th largest economy in the world, the 4th military power, a member of the G7 and G20, a member of NATO, a nuclear power, and one of 5 permanent seat holders on the UN Security Council. It is because of this strength that those who wish for us to leave the EU believe we will be more than capable of conducting ourselves satisfactorily on the world stage. The assertion that we are currently independent though, would be hilarious if it weren't so risible. The fact Cameron had to go around Europe with a begging bowl in an attempt to secure his measly reforms puts that idea to bed. We have outsourced our trade policy to the European Commission and, far from having our influence magnified, are increasingly marginalised at the global level because of that.

Page 7 - A once in a generation decision

"The referendum on Thursday, 23rd June is your chance to decide if we should remain in or leave the European Union.

The Government believes it is in the best interests of the UK to remain in the EU.

This is the way to protect jobs, provide security, and strengthen the UK's economy for every family in this country - a clear path into the future, in contrast to the uncertainty of leaving.

This is your decision. The Government will implement what you decide.

If you're aged 18 or over by 23rd June and are entitled to vote, this is your chance to decide.

Registration ends on 7th June. Find out how to register at Aboutmyvote.co.uk and register online at Gov.uk/register-to-vote"

The Eurozone is stagnating and if Greece and Italy's woes continue, could well be plunged back into recession. Schengen, the migrant crisis, and the spread of ISIS has rendered Europe less secure than it has been in decades. The UK economy is best strengthened by turning our heads towards emerging global markets rather than remaining fixated on an economy that is the same size now as it was in 2006. There is indeed a clear path into the future of our EU membership, as set out in the Five President's report. This report sets the tone for the next stage of EU integration, aiming for "deeper integration of national labour markets", "coordination of social security systems", and harmonising "insolvency law", "company law" and "property rights". Despite being rubbished as a 'dangerous fantasy' by Nick Clegg just two years ago, there are now open calls for a combined EU army and foreign policy. A vote to remain is not a vote for the status quo but to continue along the path of further political integration. The UK will be much better served by forging her own path, co-operating with her neighbours and allies on the continent, but not bound to the goal of a federal Europe. Remaining is the far riskier option.

Why Vote Leave - Part 2: The Economic Argument.

In the run up to the referendum I intend to post a blog each Sunday detailing the reasons why Britain will be better off outside the European Union. These posts will cover the following topics: the economy, influence, democracy, security, the environment, cost, and reform.

"Its's the economy, stupid", to paraphrase Bill Clinton's campaign strategist. Just like a general election, of all the arguments in the referendum debate, of sovereignty, of influence, of immigration, the economy trumps all. Will they be better or worse off will ultimately be the deciding factor for many people when they enter the polling booth on June 23rd, so it's important to set out why leaving the EU is economically sound. This argument takes two forms. Firstly, how do we mitigate any possible negative economic shocks from leaving, and secondly will we ultimately be better off longer term as an independent nation, or as part of a federal EU acting as a global trading bloc.

Every argument you hear about jobs and investment from the remain camp makes the same false conflation of EU membership with access to the single market. There are 28 members of the EU yet 32 nations are members of the single market. This single trade area runs right the way across the continent, encompassing both EU and non-EU countries alike. It cannot be repeated enough, one does not need to be in political union in order to trade with Europe. By rejoining the EFTA we maintain access to the single market, thereby eliminating any potential short term damage leaving the EU may cause to the economy. This is detailed to a much greater extent in the excellent Flexcit document from the Leave Alliance, and pursuing this 'off the shelf' path as an interim measure is easily accomplished within the two year time frame allowed by Article 50 of the Lisbon treaty for negotiations with members leaving the EU. Commonly referred to as the 'Norway option' it allows us to continue trading with other members of the single market in the exact same way as we do now, but crucially frees us up to pursue our own trade deals elsewhere in the world, without being bound by the EU's common trade policy. It's worth stating that contrary to what the In camp would have you believe, this does not mean a loss of influence over the rules. Norway, by virtue of being an independent nation, has access to the actual top tables of global regulation, allowing it to exert it's influence where it really matters, before those regulations are adopted by the EU. Whilst repatriating the whole of current EU regulations ensures stability in the short term, before adjusting, repealing or indeed strengthening as necessary further down the line, it also means we're not bound by any excessive regulation that comes from Brussels from the moment of our joining the EFTA onwards. Norway for example adopts only 1 in 5 of all EU laws. I shall, however, address the issue of influence in more detail next week.

So having ensured we maintain access to the single market, what positives can be derived from our new status as a non-EU country? Well, by repatriating our trade policy we can pursue agreements with the rest of the world. Although on the face of it being part of a large trade bloc lends more weight to negotiations, it can offer just as many obstacles as benefits. The common position of the EU, acting as it does not as a free-trade area but an increasingly protectionist customs union, must accommodate all of the various wishes of it's member states. The much hyped Canadian trade deal is now under threat of being vetoed by Romania over arguments about visa restrictions. The TTIP deal with the US has gone from being massively flawed to practically dead in the water after major components of it have been removed to satiate histrionics this side of the Atlantic. It's unlikely Congress will ratify it, or indeed, if it will pass here. Italy is blocking a deal with Australia and after 9 years of negotiations, talks with India have been shelved. Having to secure the agreement of all 28 members, each with their own, often disparate agendas, renders the EU next to useless in trade negotiations. It's not beyond the realms of reason to suggest that giving our historical links with each of these countries, and the fact that as the 5th largest economy in the world we're an important market, we would have had trade deals in place with each of them years, if not decades ago were it not for our EU membership. The UK rejoining the EFTA would mean that trade bloc would become the 4th largest in the world, meaning we could still benefit from collective clout whilst enjoying the freedom to pursue our own arrangements as and when it suited. It really would be the best of both worlds.

And it is to the world we should be looking. At a time when technology has made geographical proximity meaningless, it's backwards to be locked in a common position with our neighbours on the continent. Especially when you consider the EU's declining position in the world. It's a stagnant market, growing at a much slower pace compared to giants such as the US and rapidly expanding markets like India and China. Our exports to the EU have dropped by roughly 10% over the last 10 years, now accounting for less than half our total, whilst exports to the rest of the world have climbed by the same margin. Furthermore we run a huge trade deficit with the EU, buying far more from them than they do from us, whereas we sell more to the rest of the world than we buy. It's these global markets where our future prosperity lies but only by shaking off the shackles of EU membership can we fully engage with them. Given our links across the world and the relative wealth of our country, we should have no trouble at all striking up deals of various scope with all players in the global market. If Iceland with it's population of 320,000 is capable of negotiating and securing a deal with China, then the 70m strong, newly independent UK should have no problem at all.

Upon fully extracting ourselves, whilst we shall still have to meet EU standards when selling to Europe - just as we would have to meet Japanese standards when selling to Japan - crucially we shall have no need to apply these standards to our domestic market. EU VAT laws for example, have crippled small digital businesses across the continent and freeing ourselves of that sort of convoluted regulation will contribute to our economic growth post-Brexit

It's important to remember that Brexit is not an event but a process. Little will change overnight, but our long term prosperity is far better served engaging with the rapidly expanding global marketplace, whilst maintaining single market access, than remaining trapped in a protectionist customs union.