The single market was never about opening up markets, but imposing rigid anti-competitive standards

The single market was never about opening up markets, but imposing rigid anti-competitive standards

Richard Patient writes here in response to this week’s discussion about the single market, following pieces by Douglas Carswell MP and Iain Anderson.

The night of 23rd June was a special one for me. I was holed up in the Vote Leave ‘green room’ in Manchester Town Hall with a small band of people, amongst whom were Gisela Stuart MP, Matthew Elliott and Conservatives for Britain chairman, Steve Baker MP. We were there to witness a very special moment in our history, when the Establishment finally began recognising that sovereignty of our country was quite a big issue.

Of course, the morning of 24th June was exciting. Now down in London in the Vote Leave HQ, there were no celebrations, just a realisation that this was a new era for the UK. That people could be motivated to vote if their voice was heard. That we could now ask our MP to do something, and he or she couldn’t hide behind the “sorry, the EU prevents it” excuse. And that UK politics now meant something.

Of course, that morning was also the start of something horrific: the Remoaners, as The Times has called them, those people who can’t or won’t accept the outcome or who can’t see anything positive in the vote.

I wouldn’t dare call Iain Anderson, who wrote here yesterday, a Remoaner. He’s accepted we’re leaving after all. He’s accepted membership of the Single Market is different to access to the single market. He’s accepted the need for doers – not remainers and leavers – to work together collaboratively to achieve the best Brexit.

And yet, and yet. So many of my Remain friends, including it seems Iain, accept the old thinking. They come at it from a starting point of the old orthodoxy, of the old assumptions.

My friends. That’s why you lost. You weren’t providing leadership, as some keep saying. You were going along with groupthink.

Now, let’s build those assumptions up again from basics, using evidence where possible.

Let’s take one of Iain’s groupthink assumptions: “Single market membership is highly desirable for the UK economy”; and “for financial services the single market remains utterly vital”. Iain provides no evidence for this, just an assertion.

First of all, there are plenty of businesses whose owners voted Leave to get out of the single market. Dyson volubly complained when single market regulations imposed a power output for vacuum cleaners that helped his German competitors and didn’t do anything to help consumers. The tech firm Ghost voted with their feet, and moved to Singapore, as a direct result of the new single market VATMOSS regulation. And all the SMEs who waded through (or more than likely just ignored and got caught later) the 2,500 single market regulations every year will tell you that the single market is neither ‘highly desirable’ nor ‘utterly vital’.

In truth, the single market was always a misnomer. It should have been called the Single Protectionist Zone or the Single Regulatory Regime. The single market was never about opening up markets, it was always about imposing rigid common, anti-competitive, standards.

And in the services sector, the single market was unfinished at best, and not really helpful at worst.

Take the City. Ruth Lea, a very well respected economist who defied many others in her profession in the referendum, tells us that the City will not just survive but prosper. The EU already has ‘regulatory equivalence regimes’ to allow non-EU financial services firms to trade in the UK, similar to the passport mechanism. This is set to be expanded under the new MiFID II regulation, due to come in at the start of 2018. Given the UK already complies with EU financial regulations, ‘regulatory equivalence’ should be all but automatic for Britain. And that’s before taking into account the EU requiring access to markets in the City as well.

Why should we not just go along with single market regulation, just in case it is ‘utterly vital’? Well, because that will stop the main prize being won – proper deregulation and a stance against protectionism. The Open Europe research, showing a net increase of 1.6% of GDP, is still the best estimate of what we would gain from liberal trade arrangements with the both the EU and the world, as well as deregulation at home.

I come at this argument from the basis that the single market is probably bad. Iain comes at it from the assumption that it is ‘utterly vital’. One of us can’t be right. So my hope is that people put away their assumptions, their groupthink and their old orthodoxies, and start to look again. That means testing their assumptions by going back to basics. By looking again at the evidence, which I hope businesses, large and small, will start to provide.

So let’s think big. Let’s not rule anything out, but also let’s not think we have to get an outcome that will be both bad for our economy and stunt our ability to take back control.

The search for evidence starts now.