We are entering a period
where our Prime Minister is in danger of ‘playing at politics’ over what is a crucial
decision for the future of Britain and its people.
The prime minister after
repeated requests from the other 27 EU heads of state will at last formally
table his list of demands in relation to renegotiating Britain’s relationship
with the European Union (EU) and so it will mark the start of months of
detailed negotiations. If all goes well a referendum will follow in probably the second half of 2016. If not then David Cameron could indeed have placed in jeopardy not only our membership of the EU but the the UK Union itself.
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| Image by Ashley Morgan Photography |
The British demands include: getting out of the
commitment to an “ever closer union” in the EU treaties; greater protection for
non-Eurozone countries like Britain, to ensure other member states don’t gang
up against them; allowing Britain to cut welfare payments to EU migrants; and
giving national parliaments the power to block EU laws using a “red card”
system.
In addition to presenting
his demands David Cameron will also issue a warning to fellow EU leaders that
he may have to recommend a UK exit if they reject his
demands for reform. The status quo, he will stress, is not an acceptable option
and that Britain’s withdrawal may follow if the EU does not give substantial
ground. Such a statement is a major hostage to fortune and a worry for those of
us who strongly believe that our future firmly lies in Europe.
Also echoing the Prime
Minister’s comments is Philip Hammond the Foreign Secretary who has warned
that ‘‘the British people will not be fobbed off with a set of cosmetic
alterations to the way the EU works. This is about fundamental change in the
direction of travel of the European Union to make sure that it works for
Britain and that it is an effective organisation for all EU citizens’’.
The tone of both men’s comments
is clearly aimed at reassuring the Eurosceptics inside their party who fear
that should David Cameron not win in the key areas of the negotiations the
Prime Minister would continue to recommend to voters that the UK should remain
in the EU nonetheless.
So we are going to be in a
period where our Prime Minister will be in danger of ‘playing at politics’ over
what is a crucial decision for the future of Britain and its people. Already he
is doing this by making what seem to me quite diametrically opposing statements
obviously aimed at pleasing both sides of the In-Out debate. The truth is the Prime Minister will never be able to win UKIP nor some 50 Tory MPs over on to his side - its not re-negotiation they want but Out of the EU.
At this early stage in the proceedings
rather than attend to the Prime Minister’s set of demands I prefer to deal
with the more substantive point of what would be the options for Britain should
the Referendum result be a No and therefore exit from the EU will be set in
motion.
After all this is the
crucial matter that will have to occupy all our minds. How certain we are that
Britain will be able to thrive outside the EU? What will be the future outside
the EU when it comes to finance, investment and economic growth, the future for
businesses large and small including agriculture, the rural economy and so.
Platitudes and vague generalities will not do and Cameron, the Tory Eurosceptics
and Farage need to face up to a lot of scrutiny and start providing far more
concrete answers than hitherto.
Given that the EU will not
disappear as an institution or as a big trading market it will be inevitable
that a post-Brexit Britain will have to form a set of trading and institutional
relationships with it. Broadly there is one of five options for the country to
pursue.
Join the European EconomicArea (EEA) of Norway, Iceland and Liechtenstein which have full access to the
EU single market for goods and services without participating in the Common
Agricultural Policy or the common fisheries policy. But in return they have to
abide by all the EU’s rules without any say in drawing them up.
Norway is also a member of
the Schengen area and is obliged to accept free movement of people from the EU
and because of this it has a higher level of per head immigration than Britain
has. Also despite not being a member of the EU, Norway contributes almost as
much per person as Britain does – roughly about 90%. Not much of a deal is
it.
The second option would be to reach an
agreement similar to that which Switzerland has with the EU. It is not in the
EEA but has over 20 major and 100 minor bilateral agreements with the EU which
gives the Swiss partial access to the single market. But any changes to the rules have to be separately
negotiated each time and there is no procedure for adjudicating disputes and no
provision for sanctions. Crucially the Swiss do not have free access to the EU
in relation to financial services. Yet part of the price for even this limited
access they have to accept the free movement of People from the EU. Also like
Norway they have to contribute to the EU budget for this limited access.
The third option could be the one that
Turkey has with the EU and that is a Customs Union. Turkey’s service sector is
excluded from the agreement but like Norway and the others it has to comply
with all EU trade arrangements and most of the single-market directives and
regulations. In addition the tariffs and other trade rules that are applied to third
countries are set in Brussels without any Turkish input.
So the Tory Eurosceptics and UKIP need
to catch up with reality and realise that Britain will not get something for
nothing. To negotiate entry into this vast market there will of necessity be a
big price to pay. There is little doubt that the deeper and the more
comprehensive Britain’s deal will be with the EU the more that the latter would
probably insist on full compliance with single market rules and regulations.
The fourth option for Britain will be
to apply the normal trading rules of the World Trade Organisation as most other
countries do with the EU. The advantages should keep UKIP and the Tory
euro-sceptics happy – we would not be obliged to implement EU rules and
regulations or to accept the free
movement of people, nor would it have to pay into the EU budget or be part of
the Common Agricultural and Fisheries policies. So far so good. But financial services would not be included
and the EU would impose tariffs on the importing of cars, car components, food,
clothing and others of between 5% and 15%.
At the debate I had with an UKIP MEP
last week none of the above options appealed to him. Where once UKIP was pointing
to the success of Norway, Switzerland and even Iceland being outside the EU the
party it seems no longer wishes to have such arrangements with the EU having understood
the realities which would face Britain as I have outlined above.
UKIP’s new position seems to be that because
of Britain’s size and importance to the EU we will be able to negotiate a
special deal. I am afraid there is far too much ‘misty eyes’ talk about
Britain’s size, importance and influence in the modern world. Currently on the
world stage our influence has clearly diminished when for example world leaders
are grappling with the problems of Syria and the Ukraine – Britain is just not at
the conference table.
The Tory Eurosceptics too argue that
Britain can go it alone and would be able to negotiate a variant of the EEA
agreement; one that will allow full access to the single market but without
observing all of the EU’s rules or contributing too much to its budget. I just
wonder whether anyone has sought the views of the other countries of the EU on
this possible arrangement. It will be too late to find out after we have voted
to leave! Indeed even if such a deal might be possible, going by the Swiss
experience since the 1990’s, it could take many years to negotiate.
UKIP keeps on mentioning the
opportunities that there will be to trade with the Commonwealth countries again,
but those countries have moved on during the last quarter of a century or so and have some seven regional trading groupings. A
lot of their trade is in the Americas, Africa and Asia and Britain's current trade with the Commonwealth countries is under 5% of our imports/exports.