(Peter Lloyd is a runner-up in the TCW Brexit competition. We invited our readers to spell out the best trade and economic arrangements for Britain independent of the EU. We have had some splendid entries rebutting the pessimism of David Cameron’s Project Fear. The other runners-up and then the winner will be appearing over the next few days. Congratulations to Peter Lloyd. A bottle of TCW champagne is on its way to him.)
The EU’s economy has performed much less well than the rest of the world’s, particularly since the establishment of the Eurozone. If there are benefits of being in the EU they are not economic so long as we have a Free Trade Agreement (FTA). It is damaging and unnecessary for Britain to be part of the single market.
The EU is a drag on Britain’s performance. First, we thought we’d gain massively from single market access but factors affecting EU demand meant there was no net benefit. British companies were told to look to Europe when we would have been better off looking at the rest of the world and negotiating trade deals. Brexit means we can do that and not rely on Brussels, which finds them difficult to negotiate because of vested interests in member states.
To be worse off economically if we leave means a free trade deal would have to be unlikely. That is not a reasonable assumption. It is in the interests of the EU countries to continue to trade and in ours to do the same. Any short-lived political irritation in Brussels would not be enough to override Germany’s (and others’) express desire to have good business relations with the UK.
Access to the single market does not mean we have to accept free movement of people. No other non-European countries have such an arrangement. Immigration is welcome and best controlled with a points-based system.
Staying in, the situation is going to get worse. With twenty eight countries and more to come the decision making process under qualified majority voting (QMV) is slow and full of compromises which corrupt the process.
Worse, for the EU to succeed on its own terms, it has to progress to full Eurozone political, economic, financial and fiscal union as is planned, and outlined in the EU’s “Five Presidents Report”. Britain cannot accept this core membership and will automatically be a second class EU member in a two speed EU, with compromised institutions unsustainably trying to serve both the Eurozone and the non-euro states.
The City of London would safe be in our own hands, albeit working with all the global authorities to assure stability and fair rules.
Brexit will be a gradual process not an event. This is necessary because we will be unwinding forty four years of integration through nine major treaties. Britain can incorporate the whole body of EU law into our own temporarily, and continue to recognise all the external treaties she is party to as a member of the EU, with the ready-made presumption of continuity following the Vienna Convention on the Succession of States.
This enabled the Czech Republic and Slovakia to have a relatively trouble-free divorce.
The best mechanism is for Britain is to join EFTA with the EEA option potentially available. What matters most though is our economic power, goodwill and flexibility in negotiation.
Outside, we can have lower taxes, energy costs and food prices. It’s worth the effort.
Peter Lloyd works in Financial Markets Research and is Chairman of the Charity Age UK Wandsworth
(Image: Ozzy Delaney)