Continued membership of the single market would be membership of the EU under another name

Continued membership of the single market would be membership of the EU under another name

After losing the referendum, many Remainers have found it difficult to come to terms with the result. Some of them honestly think Parliament can reverse the referendum decision by refusing to trigger Article 50. This would simply make Britain a laughing stock throughout the world.

Even Kim Jong-Un, the North Korean dictator, would justifiably laugh at Britain’s pretensions to being a democracy, if Parliament overturned the referendum result. “Hang on a second”, he might say to himself, “these guys have just had a referendum but their Parliament has overruled the result because the political establishment didn’t like the people’s verdict”. “What a joke”, he might think. And he would be right.

More sophisticated Remainers, and this is probably the majority, accept that we have to leave the EU in some way. Yet they don’t really want to give up the substance of EU membership. The phrases might change, but in every serious detail they want everything to carry on as before. This is where the single market comes in.

Continued membership of the single market would basically be membership of the EU under another name. The European Court of Justice would be superior to our courts and Parliament. It is unlikely that we would retain full membership of the single market, and have any control over immigration from EU countries. Nothing would change, even though in a formal sense we would have “left” the EU. It was David Cameron, after all, who said that voting to leave would mean leaving the single market.

The single market, of course, started with the vision of Jacques Delors and Lord Cockfield, a trade minister under Margaret Thatcher. Cockfield resigned from Thatcher’s cabinet in September 1984 to become the European Commissioner for internal market, tax law and customs.

There was always a tension at the heart of the single market between the British concept, which essentially saw the single market as a free-trading zone, and Jacques Delors’ grand idea of “political cooperation, monetary union and movement towards a common foreign and security policy”.

Nobody now remembers the Lisbon Strategy, launched in March 2000, which hoped to make the EU “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion” by 2010. Needless to say, the single market, for various reasons, simply hasn’t delivered this vision.

Britain’s departure will leave a single market dominated by Eurozone countries. Countries using the Euro will make up 87.5% of the single market’s GDP. We all know that the Eurozone is a chronically under-performing area in the global economy. Many Eurozone countries have seen high youth unemployment rates, and low growth rates. Greece, Italy, Spain, Portugal and even France all show signs of economic sluggishness related to their adoption of the single currency.

We also tend to look at this whole debate from the perspective of producer interests – the farmers, manufacturers and some City firms. Car manufacturers are already putting out feelers for a deal with the UK government to compensate them for any tariffs imposed by the EU. What nobody ever mentions is that consumers could benefit from cheaper imports from around the world once we have left the customs union, the whole point of which is to impose tariffs on imports from the rest of the world.

Taken in the round the British economy, at roughly £2.5 trillion, will not be “devastated” on leaving the single market. The determinants of economic growth are a set of macro-economic policies that can stimulate demand, and, even more importantly, a strong set of supply-side policies: first-rate institutions; a highly-trained pool of labour; secure property rights and decent incentives to invest and work. Adam Smith’s old line about “peace, easy taxes and a tolerable administration of justice” leading to prosperity applies more than ever before.

Britain will therefore have to make itself more attractive to inward investment. George Osborne hit the right note when he suggested, after losing the referendum, that corporation tax could be cut to 15%. An elimination, or reduction, of the recent increases in stamp duty would also help investment.

We will have to ensure that any fiscal moves do not affect our ongoing deficit reduction plan. Corporation tax itself, however, is not a big revenue generator for the government. Some economists even believe that it should be scrapped altogether. It is striking that recent reductions have not seen falls in the revenue which corporation tax delivers to the Exchequer.

We can benefit from this exciting new challenge. Within the customs union and single market, we would not be able to do trade deals with other countries independently – this would make our newly-established Department for International Trade immediately obsolete. The doom-mongering and scare tactics of producer interests, EU partisans and lobbyists must not prevent us from making the most of this exciting opportunity.