The Labour Party’s Brexit position is once again in the spotlight, after comments from leader Jeremy Corbyn on membership of the single market.
In an interview on the BBC’s Andrew Marr Show on 23 July, Corbyn made a statement about the possibility of staying inside the single market after Brexit.
Ferret Fact Service has assessed this claim and found it to be False.
Evidence
Access to the European single market has been one of the central issues relating to Brexit, with politicians at Westminster split over whether the UK should stay in the free trade area.
In January, Prime Minister Theresa May confirmed that the UK will leave the single market as part of its exit from the EU.
So what is the single market?
Put simply, it is an attempt to make trade between member countries as easy as possible. The European Union describes it as an area where “the free movement of goods, services, capital and persons is assured, and in which citizens are free to live, work, study and do business”.
The free movement of people, goods, services and capital are known as the “four freedoms”, set out in the Treaty of Rome which formed the European Economic Community in 1957.
The EU single market was formed in the early 1990s and removes barriers to trade between members, a process known as ‘negative integration’.
The free movement of goods between these countries means no customs duties, no restrictions on the quantity or value of imported or exported goods, harmonised product standards and a common customs tariff. This tariff refers to the duty rates that apply to different kinds of goods imported from outside the EU.
Supporters of Britain remaining in the EU single market argue that it reduces the cost of trade and, according to the Institute for Fiscal Studies (IFS), would provide “substantial economic benefits”.
Opposition to the single market tends to coalesce around the supposed impact of free movement of people into the UK, the cost of paying into the EU budget, and the forced adoption of EU regulations. Taking back control of national borders played a significant part in the Leave campaign and polling has shown immigration was a key motivating factor for voters.
Corbyn’s claim was that given the UK’s imminent exit from the EU, it must also end its membership of the single market. However, this is not true. The European single market is actually bigger in membership (32) than the EU (28). This is due to the presence of countries in the European Free Trade Association – Norway, Iceland, Liechtenstein and Switzerland.
Apart from Switzerland, which has bilateral treaties, the non-EU countries get access through membership of the European Economic Area (EEA). This allows the non-EU members access to the single market.
So, Corbyn is technically incorrect that single market membership is inextricably linked to EU membership, but what are the UK’s options after Brexit? Initially, given the short timescale for negotiating Britain’s exit, it appears likely there may be some form of transitional single market agreement.
There is disagreement as to what the UK’s long-term single market trading relationship should be, with broadly three options – membership of the EEA, a Free Trade Agreement (like Switzerland and Canada, for example) or falling back on World Trade Organisation (WTO) trade rules.
As EEA members, the UK would likely keep “near-full membership of the single market on services and similar access on goods”, according to an IFS report. An FTA deal would be heavily dependent on negotiation, and WTO rules would still mean ‘access’ but costs including tariffs and by non-tariff barriers.
Maintaining access to the Customs Union outside the EU, similar to Turkey‘s position, has also been seen as an option. Theresa May has suggested reaching “a completely new customs agreement”, becoming “an associate member of the Customs Union in some way”. However, in June, Chancellor Philip Hammond ruled this out.
The Scottish Government has pushed for a separate single market deal. First Minister Nicola Sturgeon put forward a paper, Scotland’s Place in Europe, which called for Scotland’s continued membership through the EFTA and EEA if the UK leaves the EU. However, Brexit secretary David Davis said there were “clear barriers” to the plan.
Ferret Fact Service verdict: False
Jeremy Corbyn is not correct to say the single market is dependent on membership of the EU. There are four countries who are single market members without being full EU states. Whether or not there is the political will within parliament to negotiate staying in the market is difficult to gauge, but the current Conservative government position is to leave.
The Labour Party did not respond to a Ferret Fact Service request for evidence.
Photo thanks to Sophie J. Brown, CC BY-SA 3.0
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