I've written a piece for The Times today on the economic vandalism of Theresa May's decision to pull Britain out of the single market. You can read the full article on The Times website (£).
Membership of the single market brings enormous benefits to businesses across our economy, particularly in the manufacturing and service sectors. It’s not simply that it provides tariff-free trade with a market of 500 million consumers, but that it holds countries to common standards in areas like labour market rights and consumer and environmental protections, preventing a race to the bottom.
We could have opted to remain part of the single market while being outside the EU, and we would have minimised the costs of leaving and maximised opportunities for job creation, growth, trade and investment and, as a result, increased living standards.
Instead the prime minister has ruled out single market membership and, worse still, has indicated that she would be prepared to default to basic World Trade Organisation (WTO) rules if she can’t negotiate a successful deal within two years. It would see tariffs applied to 90 per cent of UK-EU goods trade by value, including a tariff of 10 per cent on cars. This will send a shiver down the spine of businesses up and down our country. The prime minister claimed that “no deal for Britain is better than a bad deal for Britain”, but defaulting to WTO rules would be the very worst deal for Britain. She should rule this out immediately.
But the politics of the Brexit debate are trumping the economic interests of our country. The referendum debate began as a result of David Cameron’s decision to put Conservative party political management ahead of the national interest and yesterday Theresa May placed jobs and Britain’s future prosperity as a second order issue behind the politics of the immigration debate and the challenge she faces in holding her fragile party together and appeasing its UKIP tendency.
Neither she, nor any of her ministers, can credibly claim that new trade deals with other countries around the world would match the economic benefits of our trading relationship with the EU inside the single market.
The chancellor, Philip Hammond, told the House of Commons treasury committee that “keeping as many options open as possible is key to the strongest possible negotiating hand”. Instead, before negotiations have even begun, the prime minister has guaranteed that we end up with a worse trading relationship, leaving Britain worse off as a result. Mr Hammond also said that Britain didn’t vote to be poorer.
Jobs and livelihoods depend on our prime minister getting the best possible deal with the EU. And that is why those of us who respect and accept the referendum result and want to see Britain succeed outside the EU won’t be cheering the sort of economic vandalism that this government seems determined to commit.
I'll continue to press for the best possible deal for Britain outside of the EU.