Brexit: What would help save Britain? Rejoining the single market

Now five years on, we’re rejoining them to see how they got on – and oh dear me, things haven’t quite gone according to plan.

(Unfortunately there’s no off-switch on this one.)

Back in 2016, Michael Gove promised big post-Brexit trade deals. Here he is two months before the referendum: “The EU has failed to secure trade deals with the huge economies of India, China and America. Outside the EU we can cut those deals.”

And here’s Boris Johnson: “The only thing we have to fear is fear itself. I think there is a huge opportunity. Do free trade deals, believe in ourselves.”

Britain believed. So what’s happened since?

Well, now, let’s see.

Talks with India are due to start at some point.

The UK government isn’t pursuing a trade deal with China.

And the United States, the Holy Grail of post-Brexit agreements? It’s not happening. Not postponed, not delayed, but not happening. Barack Obama warned the British in 2016 they would be at the back of the queue for a trade deal, but it’s even worse than that. Joe Biden this week didn’t even commit to a deal in principle.

Democrat Representative Brendan Boyle, a member of Congress’s Ways and Means Committee that oversees trade deals, told the BBC that America’s priorities were trade with China and “our biggest trading partners, Canada and Mexico”.

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These apparently take precedence over talks with a daft northern European state that made the completely unforced error of abandoning its own biggest trading partner (I paraphrase).

The government’s approach to the Northern Ireland Protocol has made matters worse. It turns out you can’t strop about on the international stage without consequences.

The UK government, having had its nose pushed into a big plate of reality, is now talking about “incremental” changes to the US trading relationship or possibly trying to join the deal America is doing with Canada and Mexico (though this seems to have been dreamt up on the Amtrak to Washington; no one seems aware of it in Congress.)

Even if Britain did somehow join the deal, economists reckon it would boost GDP by less than 0.1 per cent and would probably require the UK to accept lower food and agricultural standards.

Meanwhile, the Americans are in serious talks with another important global player about expanding and deepening bilateral trade and developing compatible standards: the European Union.

The irony is too painful.

America has ended its ban on British lamb but that was Mr Johnson’s only trade win from Washington (there was an earlier victory on single malt tariffs which were suspended, though this was unrelated to trade talks). So we can put that on the mantelpiece next to the much-vaunted Australia trade deal, which places no requirement on Australia with its mega-farms and love of fossil fuels to meet Britain’s animal welfare or environmental standards. British farmers fear being undercut and “the slow, withering death of family farms”.

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We also have a new deal with Japan, but economists believe it isn’t any more advantageous to the UK than the EU’s deal with Japan, with some estimates suggesting it could be worth less.

The UK has applied to join the Trans Pacific Partnership, but it’s a long way from sealing a deal.

The government seems confident it can get away with all this because people are sick of Brexit. And people are sick of Brexit. But people are also sick of politicians over-promising. We were told that such riches awaited – such riches! – if we were bold enough to seize them.

But what’s happened so far tells a different story.

Brexit has been a major cause of labour shortages in food manufacturing, lorry driving, hospitality and the care sector. Rising prices for consumer goods are being fuelled in part by Brexit red tape. There was a “disastrous” drop worth £2bn in exports of food and drink to the EU in the first half of 2021 compared to the first half of 2019, says the Food and Drink Federation. The government’s own Northern Ireland Protocol has caused serious problems which are yet to be resolved.

It would be better if we’d never gone down this path: that’s what the British public think. In 53 out of 56 polls conducted since January 2020, excluding don’t knows, most people said leaving the EU had been a bad idea.

A fresh referendum may not be on the cards, but it doesn’t have to be all or nothing. There’s a third way: a closer relationship with Europe.

Being in the single market would mean free movement of goods, capital, services and people, putting a big dent in those labour shortages. It would be a boon to businesses, removing tariffs and reducing non-tariff barriers. It would require Britain to maintain common standards with the EU, which were popular anyway. Britain would have to pay into Europe’s coffers but single market members can do trade deals and avoid the Common Agricultural and Fisheries Policies.

Being in the customs union, meanwhile, would resolve much tension over Northern Ireland and allow control of immigration, though not tariffs.

So Britain has options. These options require compromise but look how much we gave up leaving the EU. Any new trade deals are likely to be just as contentious as our relationship with Europe – that’s if they happen at all.

Moving closer to Europe is favoured by the Lib Dems, Greens and the SNP (independence would be a sounder proposition if Britain had a closer relationship with Europe). It would require Labour buy-in to have a hope of becoming reality and Labour are currently reluctant to reopen that wound.

But times are changing. Benefit cuts and rising costs are likely to hammer low-income families this winter, making some reevaluate their support for the Tories. The smaller parties should start making the case for changing Britain’s relationship with Europe, in the interests of hard-pressed households, and in time, Labour can throw their weight behind the idea.

Our new relationship with Europe is not carved in Grampian granite. It can be changed “incrementally”.

Brexit may have battered the British economy but we don’t have to live with it.

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