By Chuka Umunna
The Prime Minister has admitted that Britain may have “difficult times ahead”. The reason, though she was too polite to say it, was the vote to leave the European Union on June 23rd. The bruising experience of the G20 summit has proven this vividly, with Barack Obama repeating his assertion that Britain will be at the back of the queue for a trade deal with the United States. Not to mention the Japanese government making clear that the “harmful effects” of Brexit could lead to Japanese companies shifting jobs out of Britain, and the Prime Minister’s junking of almost the entire Vote Leave agenda.
The government’s task going forward is to limit this economic damage as much as possible, while of course respecting the will of the British people. I am very clear as to what that means – keeping Britain in the European Single Market.
This isn’t about “access to the Single Market”. Every country on Earth can do that. It’s about enjoying the closest and most valuable trading relationship possible with our largest and most lucrative trading partner.
The Single Market is unique. It is simply the deepest and most comprehensive form of trading agreement there is. It removes tariffs and quotas on trade between European states. It removes non-tariff barriers to trade, such as rules and regulations that differ between countries. And it provides the right of companies to provide services in any member state, preventing protectionism. All of this means that it as simple to sell a product or service in Wolverhampton as it is in Warsaw.
The much-derided experts have been clear on this both before and after the referendum. The Institute for Fiscal Studies has found that leaving the Single Market could blow an £8 billion black hole in the UK government’s budget, while since the referendum they have concluded that staying in the Single Market will be worth 4% of our total national output.
Leaving this monumentally beneficial arrangement would make us all poorer, with business being damaged, jobs going, and prices rising. As the Japanese government made clear yesterday, a huge quantity of the foreign investment that is so important to our economy is predicated on our continued place in the Single Market.
Many will scoff at this position, as they believe that Single Market membership is incompatible with greater controls on immigration to Britain. But this is not quite true.
First, we should be seeking to reform free movement – free movement in the EU as we know it was rejected in the referendum, so we should work towards an alternative that would be acceptable to the majority of our citizens. Immigrants from the EU and across the world have made a vital economic and cultural contribution to our country which is why even those who voted for us to leave wish for EU citizens already here to be guaranteed the right to stay. And as I have learnt from my work on social integration, the immigration issue goes both broader and deeper than the narrow debate about free movement. Ending it would be no silver bullet.
Second, other countries in the Single Market but not the EU, like Liechtenstein, have mechanisms they can use to control free movement. Besides which, the rise of populism across Europe - manifested most lately in German regional elections – mean that every government in Europe is facing the same degree of public anger over immigration, which must be assuaged.
And third, as we go into our negotiations with the EU, we must aim high. Why abandon a beneficial negotiating position when there is no pressure on us to do so? After all, Vote Leave campaigners in the referendum said it was “silly” to think that there would need to be a trade-off between immigration reform and trade with the EU. We should try to take them at their word.
The Single Market does not just bring economic benefits. It contains rules that deliver crucial protections for British workers, like equal treatment for temporary staff and restrictions on working time. We must not give up this crucial bulwark against exploitation by unscrupulous bosses.
In any case, having clarity on Britain’s position in the Single Market is crucial to the entire process. Third party countries like Japan will not know how valuable access to the UK market is until they know what our trading relationship will be with Europe. And as Jean-Claude Juncker has made clear, the issue of market access must be sorted before, not after, Britain exits the EU.
A narrow majority of Britons voted for Brexit. But they did not vote to pull up the drawbridge and isolate our country from the rest of the world. Britain’s future must be open, especially to the global market that is the cornerstone of our economy success. To make the best of a difficult situation, and mitigate the difficult times as much as possible, the government must fight tooth and nail to keep Britain in our largest market. That's why I'm supporting Open Britain's One Million Jobs campaign.