The Single Market, the Customs Union and the European Economic Area: Some Clear Thinking


FOR MANY years, I have held the view that a large number of political journalists, especially those working in the broadcast media, are more interested in gossip than issues.

A good political journalist, especially one working in the broadcast sphere where there is a regulatory requirement for impartiality, should include nothing other than facts and balanced analysis in their reports, with pictures to fit the story.

David Davis 1
Brexit Secretary David Davis

Since political reporters spend so much time in the Westminster bubble, they all too often lose sight of the fact that Mrs Jones, watching the evening news from her council house in Treherbert, isn’t especially interested in whether David Davis and Michel Barnier are getting along this week, but she does care about whether a ‘no deal’ Brexit will result in an increase in her weekly shopping bill.

With this in mind, virtually all political reporters working in TV and radio band about the terms ‘Single Market’ and ‘Customs Union’, but I cannot think of a single one who has made any serious attempt to explain what these terms actually mean, let alone what withdrawing from one or either would mean for the UK economy.

It’s relatively common knowledge that Jeremy Corbyn’s Labour Party has performed a u-turn on the issue in the months since the General Election. That’s easy to explain: Corbyn has a long track record of euroscepticism going back four decades. Every bone in his body tells him that the EU is fundamentally a bad thing for the country. He reluctantly supported Remain last year in a bid to appease the Blairite and Brownite MPs who dominate his party’s back benches, yet they still tried to depose him in favour of the ultra-slippery Owen Smith later in the year. He would have been better off going down fighting, and would have won the subsequent leadership challenge regardless.

Stephen Doughty
Biding his time: Stephen Doughty MP

This latest policy shift is just another sop to try and buy their loyalty, but it is unlikely to work. They know they have to put up with Mr Corbyn for now because he fared far better than predicted at this year’s General Election, but given time, the Stephen Doughtys and Hilary Benns of this world will try to remove him as leader and replace him with a New Labour apparatchik.

But I digress. We know Mr Corbyn has changed Labour’s policy to favour continued membership of the Single Market and the Customs Union. We know it is Conservative Party policy to withdraw from both. But how many people, quite possibly including the political reporters who grace our screens every evening, can accurately define either?

The Single Market has no specific legal definition. It essentially means ‘single regulatory regime’. It aims to break down all barriers to trading across the EU and even to non-EU member states by ensuring the ‘four freedoms’ – goods, services, capital and labour.

Free movement of goods, services and capital means the elimination of tariffs and reduces costs and administrative burdens by applying the same set of rules (ie ‘single regulatory regime’) among all those states which are a member of it.

The free movement of labour is more controversial, for it effectively means accepting unlimited, indefinite levels of immigration from other EU states, regardless of their skill level. It explains why Theresa May failed to get immigration levels down to her target of ‘the tens of thousands’ in every single one of her six years as Home Secretary, and why we need to build a city the size of Cardiff every single year to keep up with immigration rates.

But there is a catch – free movement of labour is not an absolute condition of Single Market membership. More on that later.

The Customs Union ensures all member countries charge the same import duties to non-members. For Brexit to be a success, it is essential that the UK is not part of the Customs Union. It will prevent our country from being able to agree free trade deals with the wider world, or even set tariffs on our own terms to countries where no free trade deal exists. The importance of not being part of the Customs Union cannot be understated. Labour’s support for continued membership of the Customs Union is baffling, especially since they claim to support Brexit on principle.

Winston Churchill
Sir Winston Churchill

I favour continued membership of the Single Market. Let me be clear, my priority is or the United Kingdom to get out and stay out of the European Union. My side won the referendum, and by a clear, though not overwhelming margin, but I take on board Sir Winston Churchill’s wise maxim, ‘In victory: Magnanimity’.

With that in mind, I wish to persuade as many Remain voters as possible of my arguments, and am the first to acknowledge that, if handled incorrectly, Brexit could go badly wrong.

By the same token, I am painfully aware that there are those among the political establishment, and indeed the media, who actively want Brexit to fail so that they can say ‘I told you so’. I’ll name two such individuals – ‘Sir’ Vince Cable (leader of the sarcastically-titled Liberal Democrats), and James O’Brien (a condescending creep who hosts a three-hour daily anti-Brexit radio programme on LBC, where he frequently lies, smears and twists the words of Brexit campaigners).

A ‘worst case scenario’ would see, on the day after Brexit, huge queues of lorries at Dover because of the endless bureaucratic procedures the EU must by international law impose on ‘third countries’, which the UK will have then become.

With jobs vanishing by the day, and the value of the pound plummeting, the government would fall. The arrogant Remainers are already waiting in the wings to take their revenge, from the aforementioned ‘Sir’ Vince Cable, to the Blairites and Brownites on the Labour back benches, to the likes of Anna Soubry and Kenneth Clarke among the Conservatives, to the SNP and Plaid Cymru, who seek to see Scotland and Wales ruled directly from Brussels, doing away with the Westminster ‘middle man’.

A new government (of ANY party) could then seek election pledging re-entry to the European Union on whatever terms they could get, meaning we would almost certainly be compelled to adopt the euro as part of our national humiliation. We could also forget controlling our borders, whether from a cheap influx of EU labour, or from the social unrest being brought about by the massive growth of Islamic populations across Mainland Europe.

I prefer a more cautious approach, based on precedents that have already been set. What is colloquially known as the ‘Norway Option’ would be far, far easier to achieve, because we would be following a path that has already been laid out, meaning years of monotonous negotiations would not be necessary.

Here’s how it works. Norway is not, nor never has been, a member of the European Union. It is, however, a member of the European Economic Area (EEA).

If the UK chose to stay in the EEA, we would be able to leave the EU, agree our own trade deals with non-EU countries (since we would NOT be in the Customs Union), and will stay in the Single Market.

Crucially, we would also be able to suspend ‘freedom of movement’ since EEA members are allowed to activate Article 112 of the EEA agreement, known as the ‘emergency brake’. This method has been used by Lichtenstein to suspend ‘freedom of movement’ indefinitely, and implement its own quota system. As a far larger country with much more clout, the UK could do the same with ease.

There are, inevitably, downsides to EEA membership. We would still have to pay some money every year, though nowhere near as much as at present. We’d also have to accept their regulations when we traded with them, but then again, we also have to accept the  rules of the USA, China, India or any other country we choose to trade with, which is reasonable.

But on the crucial matters – Parliamentary sovereignty, the supremacy of British courts, immigration controls, the ability to form trade deals with the wider world, and the ability to form a genuinely independent foreign policy, we would be winners on all counts.

We would no longer be in a situation where EU law overrides British law. The highest courts in the land would sit in this country, our elected representatives in Parliament would have the power to set criteria to limit immigration levels, our armed forces personnel would never, ever have to swear an oath of allegiance to the EU flag (it’s coming, Mr Juncker has said as much), and we would be free from the protectionist EU regulations that currently prevent us from forming trade deals with the wider world, such as Brazil, India and Singapore – places with growing economies and populations, where people actually live.

This solution is remarkably straightforward and uncomplicated. The road map is already in place. Why is our political establishment so reluctant to embrace it?