Saturday, 7 May 2016

Market conditions outside the EU

A constant argument by those who want the UK to leave the EU is that we pay them £16bn every year, which could be better spent by us on the NHS, on agriculture and various other things depending on which speaker you are listening to. I feel certain that if you added up all that spending it would come to more than the claimed £16bn. It would certainly be more than the net figure (£3.8bn per year in the period 2007-2013).

Ah, but that is still £3.8bn too much, say the Brexiteers.
Remainers: That is the entry fee for our largest market which takes nearly half our exports. We get much more back in terms of profit on trade. If we left the EU, we would still have to pay into the EU budget as part of any deal we struck with them, as Norway and Switzerland must do.

But we are British, we don't have to make any special deals. The Europeans love us, especially as we are their largest market.
Remainers: The EU may be Britain's largest market, but Britain is only about 8% of the world-wide market to which EU exports go. So, they are not going to make any special arrangements for us. If we have no deal, all our exports will be subject to the Common Customs Tariff, which averages about 3%. That's the difference between our present slow recovery and returning to recession. And there are still a few goods which have high tariffs - so any manufacturer making those would be devastated.

We can still get rid of all that red tape.
Remainers: All imports into the EU have to comply with EU regulations, so most UK manufacturers would continue to abide by EU regulations in order to be able to export.

We would also be subject to WTO anti-dumping rules, so - for example - if we spent state money rescuing our steel industry, we could well be accused of dumping cheap UK steel on the EU, resulting in punitive tariffs or a quota.

For the Brexiteers to claim that we would continue to have access to the Single Market on similar terms, but without free movement, or contributing to the EU budget, or complying with all the regulations and standards, is pure fantasy. It would amount to a more favourable relationship with the Single Market than France or Germany has.

I am indebted to fellow Liberal Democrats Richard Gadsden and Richard Phillips for these squelches.

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