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Financial Times: May urged to admit UK will leave single market

Date: 05 12 2016

May urged to admit UK will leave single market

Leading Eurosceptic tells government to ‘come clean’ on Brexit intentions

Theresa May has been urged by a leading Eurosceptic to “come clean” and admit that Britain will leave the single market and customs union — giving business enough time to prepare for rupture from the EU.

John Longworth, co-chair of Leave Means Leave, said that making such an announcement would make it easier for companies to prepare for Brexit. “It’s incumbent on government to give clarity,” he said in an interview.

Downing Street has repeatedly insisted that no such decision has been made: “We are not going to reveal our negotiating position,” an official said on Sunday.

But some ministers have conceded that staying in the single market is incompatible with the prime minister’s wish to end freedom of movement and reduce immigration from the continent.

Mr Longworth, who is former head of the British Chambers of Commerce, said it was not tenable for the government to try to give “no running commentary” on the talks.

“It’s important that in the new year the government makes it clear that we’re going to leave those two institutions, the single market and the customs union,” he said. “The prime minister should give an overview about the general direction of travel; she should say ‘We’re minded to leave them’.”

David Davis, the Brexit secretary, told the House of Commons in the autumn that it was unlikely that Britain could stay in the single market. “The simple truth is that if a requirement of membership is giving up control of our borders, I think that makes it very improbable,” he said. Number 10 subsequently described that as his “personal” opinion.

More recently Mr Davis’s department, DexEU, has said Britain wants the “freest possible access” to the single market without necessarily being in it.

Mrs May will hold a round table with business leaders in Downing Street on Monday where she is likely to be pushed for greater clarity on Britain’s negotiating stance over Brexit.

The CBI, Britain’s biggest business lobbying group, is among those calling on the government to engineer a “soft Brexit”.

Paul Dreschsler, president, has said Britain should keep its “privileged” access to the single market, keep borders open to European talent and agree lengthy transitional arrangements to prevent a “cliff-edge” on the day of Brexit.

Those transitional arrangements would keep the UK tied to the single market and its rules instead of ending up with WTO arrangements which will feature higher tariffs.

Mike Rake, chairman of BT, said on Sunday that companies wanted more “clarity” about the process ahead. “What’s critical here is we get as much of the single market access as we can, the freedom to move goods and people as much as we can because 45 per cent of our exports are going to a market of 500 million people,” he told ITV’s Peston on Sunday. “It’s going to require in my view quite a long transition period.”

But Mr Longworth claimed that the benefits of quitting the single market far outweighed the benefits of staying in. He argued that if Britain left the single market it should take a pragmatic approach as to whether or not it was worth paying for no-tariff access to the trading bloc.

“It is a simple, business-like cost-benefit analysis really, how much is it worth to get access?” he said.

Mr Longworth was forced out as director-general of the BCC in March over his pro-Brexit stance, which was at odds with the organisation. Now he is urging companies to “wake up and smell the coffee” if they want to take advantage of the post-Brexit opportunities — rather than “remoaning”.

“Those who still believe it won’t happen or shouldn’t happen will be the losers,” he warned.

Leave Means Leave, which is pushing for a so-called “hard Brexit”, includes senior political figures such as Owen Paterson, Dominic Raab, Theresa Villiers and Lord Lamont.

It argues that if no deal can be done with the EU, Britain should leave the organisation without a trade deal, relying on WTO rules instead while free-trade deals are negotiated elsewhere.

John Redwood, a former Tory cabinet minister, argued at the weekend that people were wrong to see the single market as a “precious gem” that was essential for prosperity.

“They have not studied the evidence,” he wrote in a blog for the Politeia website. “The UK’s growth rate was slower from 1972 when we joined the EEC up to 1992 when the single market was ‘completed’ than it had been in the postwar decades before.”

December 5th, 2016: Financial Times