May should not turn her back on the option of membership of a reformed single market, writes Seema Malhotra MP
Theresa May’s speech at Lancaster House last week fired the starting gun on the Brexit. In her speech, she accepted many of the recommendations of the first Brexit select committee report that came out at the weekend. She outlined the broad direction of travel, the need for close cooperation on justice and security and confirmed parliament will have a vote on the deal. She left the door open on the custom’s union to a large extent, and called for tariff-free and barrier-free trade. She finally announced there will be a phased implementation – a proxy for transitional arrangements, which witnesses to the select committee saw as increasingly essential and Labour has repeatedly called for. She now needs to come forward formally with a white paper – maybe even an off-white paper – and do so soon.
In general the speech has a far more practical and pragmatic intent than we have been hearing from the more hard-line Brexiteers. The tone of partnership is vital for our relationship with the European Union’s 27 member states. We are leaving the EU, but we are not leaving Europe. Our European neighbours are our friends and our allies and their continued success is important not just for the EU 27’s prosperity but for the United Kingdom’s too. It is a tone which is long overdue, and one we need to hear consistently from government ministers if we want to genuinely overcome division, reverse the tide in race hate and steer a course that maintains our social fabric and social cohesion.
This path is not going to be without huge challenges. Leaving the EU will require major changes to the statute book. In addition to Article 50 and all that will follow as we negotiate our exit, we will also see in the next Queen’s speech the so-called great repeal bill. This will repeal the European Communities Act of (ECA) 1972 and incorporate EU law into domestic law, ‘wherever practical.’ The government intends that these legal changes within the bill will take effect on Brexit Day – the day we officially leave.
Two key issues struck me following her speech. The first is the deliverability of her plan. In the next two years she suggests that we will negotiate our exit, negotiate our future relationship with the EU, provide certainty for the economy about the rules under which we will be trading, agree a financial settlement with the EU, see through the great repeal bill, and still deliver all other areas of government policy across Whitehall. There is clearly set to be a capacity issue, and the costs of Brexit must not be borne through further cuts to public spending. She needs to plan realistically for what she can deliver, and to plan now.
Second, she must still keep open the option of membership of the single market with the promise of EU-wide reforms. EU member states have recognised the need for reform of rules around freedom of movement and we should not assume there will be no room for flexibility. Last July I co-wrote a piece for the New Statesman with Stephen Kinnock MP with a draft six point plan for Brexit. We outlined our view that the EU-UK settlement must balance the economic imperative of access to the single market and access to skills with the political imperative to respond to the level of public opinion to reduce immigration from the EU. Remaining in the single market, to the greatest possible extent is essential for our future prosperity as a country – a case powerfully outlined by Sadiq Khan last week. A large proportion of the £17bn of foreign direct investment that comes into the UK every year is linked to our tariff-free access to a market of 500 million consumers.
The select committee report highlighted that there is not absolute clarity over the definition of free movement of workers, and it is clear that free movement is more difficult in practice in some EU member states than in others. Carolyn Fairbairn, director-general of the Confederation of British Industry told us: ‘I would like to hope that there is scope for some negotiation about that, because I think that would make a lot of things possible.’ However we move forward on a new system for controlling EU migration, the government will need to take full account of the importance of workers from the EU for our economy and public services, including the highly skilled. Following the speech, Fairbairn also said, ‘ruling out membership of the single market has reduced options for maintaining a barrier-free trading relationship between the UK and the EU.’
Theresa May and David Davis have indicated that our goal is to make sure that we increase our future economic prosperity. This is indeed the right focus – the British people did not vote to be poorer.
If the government’s objectives are genuinely to be tariff-free, barrier-free trade with the EU and future economic prosperity and inclusive growth, it is an own goal for May and a high risk for Britain to make policy choices that could take us in the opposite direction.
Seema Malhotra MP is member of parliament for Feltham and Heston. She tweets @SeemaMalhotra1
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