THE BLOG

Taking Britain Out Of The Single Market Is Self-Harm, Not Statesmanship

17/01/2017 17:19 | Updated 18 January 2017
POOL New / Reuters

With the Prime Minister's speech on Brexit today, Britain took another important step down a historic road - out of the EU, destination unknown. It is the British public's bad luck that we are being driven by a Government which is voluntarily making its negotiating hand worse and enthusiastically talking up the prospect of its negotiation failing, publicly advertising a Plan B that would be catastrophic for working people and their families.

The British people, as the Chancellor has so rightly said, did not vote in the referendum to become poorer. Leave campaigners decried economic warnings made during that campaign as "scaremongering", and promised that the UK would remain part of a free trade area "stretching from Iceland to the Russian border". This implied membership of the Single Market. The Prime Minister herself, during the referendum campaign, said that preserving our place in the Single Market was the best option for growth and jobs in our country.

This is why it is so extraordinary that the Prime Minister today ruled out Single Market membership for Britain after we leave the EU. Europe buys 44% of everything we sell as a country, from services to cars and agricultural products. Leaving the Single Market will put up new barriers to trade that will damage businesses, cost jobs, and increase prices. Before she has even entered negotiations with our European partners, the Prime Minister has ruled out the best deal for our economy. This is self-harm, not statesmanship.

The Prime Minister's rationale is that this is the only way we can gain greater control over immigration. But there is much we could do to increase control over immigration without losing control over our economy. The EEA treaties - which allow membership of the Single Market while being outside the EU, like Norway - gives the countries involved greater power over migration. There are things we can do on a domestic level, like reinstating the Migration Impact Fund, which was so short-sightedly abolished by the Tories. And we can have a real Europe-wide debate about changing free movement, for which the appetite on the Continent is growing, as comments by senior figures like the Dutch Deputy Prime Minister have shown.

Even more incomprehensible than her rejection of the Single Market was the Prime Minister's blasé attitude towards negotiations breaking down, and Britain leaving the EU without any trading arrangement whatsoever. As I told the Brexit Secretary David Davis in the House of Commons today, such an outcome would be disastrous for jobs and growth. Every car we export to Europe would become 10% more expensive; every item of clothing, 12%; every joint of British lamb, 40%. UK goods would be priced out of competitiveness in the European market, leading to loss of market share and loss of jobs here at home. So the Government's number one priority must be to prevent this nightmare scenario from happening, rather than cheerfully admitting the possibility.

The Government would have us believe that they possess a cunning back-up plan. This would be, as Philip Hammond said recently, a total reimagining of our economic model - one that would put the top 1% of earners first, and working people last. A Britain of lower taxes for the super rich and less help for struggling families; of fewer rights for working people, and more tax breaks for multinational corporations. Right-wingers might salivate at the prospect of this country becoming Europe's off-shore tax haven, but it would be immensely harmful for working people, and would do nothing to rebalance our economy. Theresa May has rightly promised to protect and enhance workers' rights. She should stick to that, and reject Hammond's foolish plan.

It was sadly inevitable today that Theresa May would say nothing about the many promises made by her Leave campaign ministers in Government - spending £350 million for the NHS, abolishing VAT on fuel bills, spending more money on primary schools. Indeed, she admitted that Britain would continue to pay into some EU programmes after Brexit; the final death knell for the fictitious figure on Vote Leave's big red bus.

We need a pragmatic approach to Brexit that puts working peoples' living standards first, while making the changes to immigration that voters want. That means not throwing away our best chance for prosperity before negotiations have even begun. It means doing everything to reach a deal with the EU, not taking the massive gamble of walking away without one. And it means rejecting utterly the hard-right fantasy of a Britain with lower taxes for the rich and fewer rights at work for the poor. Only a pragmatic and smart approach can ensure that our country reaches its destination unscathed.

Chuka Umunna is the Labour MP for Streatham and chair of Vote Leave Watch

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