Some in the media and many in Parliament on the Opposition benches still seem very muddled over what has happened. The electorate voted to leave the EU. That is what it said on the ballot paper. They did so despite the Remain campaign telling them in no uncertain terms that they thought that meant the UK will be out of the single market, with damage to our economy as a result. Remainers told us there would be an immediate and major loss of confidence, triggering an early recession, falling house prices and rising unemployment. Many more voted to “Leave” than have ever voted for a major governing party in a General election.
Vote Leave made clear we did not accept Remain’s short-term economic forecasts. We agreed that the EU regards freedom of movement and budget contributions as part of the Single Market, so we would indeed leave the Single Market, but we should retain good access to it.
Now we are three months on from the vote we can see that in most respects Vote Leave was right about the short term economic out-turn, and Remain was wrong. Three months on and retail sales are up, the economy has grown, jobs have increased, car output and sales are up and house prices have been stable outside central London, where they had been falling since April owing to Stamp Duty changes. The only pessimistic forecast Remain were right about, is the pound has fallen. Vote Leave did not contest this forecast before the vote, pointing out that the pound has both risen and fallen within the EU and will doubtless do so outside as well. The pound now looks cheap and is stimulating exports.
The latest leaked Treasury long-term forecast of losses for the UK from leaving the EU internal market was clearly left over from Project Fear. As their short-term forecasts of recession were wrong, there is every reason to disbelieve this longer-term one as well.
The government has already made a number of crucial decisions to get on with leaving. It has ruled out a re-run of the referendum. It was a fair vote after a long and strongly contested campaign, with both sides making claims the other side disagreed with and countered. It has ruled out a second referendum on any term we may agree with the EU for life after departure. There would be no point, as we would be out and could not reverse that decision and action. Once you put in an Article 50 letter you are on the way out and cannot rescind it.
“You cannot negotiate taking back control. That is a contradiction.”The government will send the letter notifying them of our intention to leave no later than March 2017. That is the mandate of the referendum. It will also introduce a Repeal Bill to remove the powers of the European Institutions in the UK in the next session of Parliament. This Bill will also transfer all EU law into UK domestic law to provide continuity. In future we will be able to repeal or amend as necessary. This Bill will therefore guarantee all EU employment laws remain, as Labour wishes us to do.
There just remains the issue of what we talk about with our former partners, and what kind of future trade arrangements we might enjoy. You cannot negotiate over taking back control. That is a contradiction. As the government says, UK voters want their Parliament to be able to change laws, control borders and spend tax money as it wishes, as guided by electors and determined by elections. That means discussions with our former partners should be over issues of common concern like trade.
The UK should be generous and offer the rest of the EU tariff-free trade with no new barriers on service trade either, carrying on exactly as we do at the moment. That would be the best for both sides, especially for them as they sell us so much more than we sell onto the continent. If they want barriers, then we will have to revert to the WTO Most Favoured Nation tariff, which averages around 3.5 per cent but helps us more than them as more of our trade will be tariff free.
None of this need be either complicated or time consuming. Doubtless many lobby groups and officials will want to slow it all down and raise a whole series of problems which need not be problems. The UK government needs to press on with a full WTO tariff schedule as we remain founder members, just in case the rest of the EU turns down our generous and sensible offer that we carry on trading as we do at the moment. I am an optimist, as the continental politicians will have a lot of explaining to do to their electors if they insist on making exports to us more difficult.
