Saturday, 3 March 2018

The politics has been decided, but economics remains an open question

Mrs May has said our regulations would remain "substantially similar". Though this does not confer any special rights, it will be the foundation of any new relationship with the EU. This prompts remainers to ask what the point of leaving is.

That actually underscores why remainers have not understood what the EU is. Were it just a regulatory union (a single market) we would not in all likelihood be leaving it. Were it simply there for facilitation of goods and services there would not be sufficient reason to object.

The EU was never intended to be just a trade bloc, and it's only really British politicians who have pretended otherwise. It was always destined to be a supreme government for Europe expanding far beyond the domain of trade.

The single market (of which 3/4 Efta states are a member) is a regulatory union based on a body of law which represents only a quarter of the entire EU acquis. The rest is to serve the function of building and expanding its political power.

The obvious complaint being that the more power it has the less nation states have and the more remote the decision making, whereupon it imposes one size fits all political ideals on a diverse set of cultures. This makes meaningful democracy impossible.

I could expand on that and we could be here all day but I feel that question was settled by the referendum. Voters may not have been aware of how the system works but they knew enough to know they didn't want to be part of the political union & have the EU as their government.

So that leaves the question of how we leave and what relationship we want. This is where Brexiters lose the plot in wanting absolute sovereignty over every last detail. That's where I part company with eurosceptics. It's a matter of proportionality.

I'm never going to have strong opinions on aubergine marketing standards and it really doesn't bother me that we have a uniform set of rules for the manufacture of cars. In the grand scheme of things it's not that important.

So really this is a question of what we are prepared to go to the barricades over. This is where there are philosophical debates to be had about the nature of the UK legal system and how the EU system of rights tramples too much on our ability to govern ourselves.

It's fine to have a Europe wide system of values but as they ossify we find that translates into a number of entitlements and intolerable restraints on democracy to the point of absurdity. We then becomes victims of the letter of the law and ill served by it.

I have no objection to economic and regulatory collaboration - which is an essential component of modern trade and there is every advantage in sharing the load for European defence - but not if it involves the wholesale transfer of political authority to the EU.

To my mind the EU represents too much power in the hands of too few in a framework that will never respond to democratic demands for reform and will never have the self-awareness to realise its own role aggravating divisions.

For the most part the Remain campaign centred on the economic advantages of the EU but what we find is that we can have all of that as a participant of the single market without being under the political control of the EU apparatus.

The reason they focused on the economic (and still do) is simply because the core proposition of dissolving the nation states of Europe to create a federal Europe is simply not wanted by the vast majority of Brits.

You can demonstrate how the UK frustrates that agenda by way of being a member but political integration is in the DNA of the EU and no euro-election is ever going to change that direction of travel. We can dictate the pace but not the destination.

I can therefore see every reason for leaving the EU but virtually no advantage to leaving the single market. The economic arguments for Brexit are flimsy - but then Brexit isn't and shouldn't be an economic proposition. It is fundamentally about democracy.

This is another area where I part company with Tory leavers. There are many good reasons for leaving the EU but "free trade" isn't one of them and teenage libertarian fantasies based on a woeful misapprehension of how the system works is not a sound basis for public policy.

We are then in a position of choosing the mode of economic partnership with the EU whereupon we must decide whether we wish to maintain free movement of goods and services and whether we are prepared to accept the obligations that go with it.

Being that the single market is the most advanced regulatory union in the world, one which gives consumers the confidence to buy goods on trust, its inherent value is far more than the sum of its parts. That is why the EU opposes any cherrypicking of it.

There are many valid criticisms of it, and still it is fair to say that there is a democratic deficit, but in my view the EEA represents the best compromise available and one which would facilitate Brexit without the economic harm we are sure to endure otherwise.

Many argue that it does exclude a number of goods, very often for less than honest reasons, but in a world of predatory operators and criminal gangs, we are better with than without. To date, I have not seen a compelling reason to leave the single market.

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