10-02-2016, 01:56 PM
Basically, hard Brexit (leaving the single market) seems unavoidable, for political reasons..
The feeling among most Tory MPs and activists as the conference begins is that May, Davis, Johnson and Liam Fox, the international trade secretary, are tending towards a hard Brexit along the lines Tice would like. Increasingly there is a realisation that because immigration was the main concern for most Leave voters, continued single market membership will be, as one minister put it, “politically unsellable”, as it would involve accepting EU free-movement rules. Jonathan Isaby, editor of a new website, Brexit Central, set up by Matthew Elliott, the former chief executive of Vote Leave, said anything less than hard Brexit would be seen by the public as a betrayal. “The signals from the government are getting ever clearer that we will see a clean Brexit: restoring full sovereignty to Westminster, taking back control of our borders, and giving elected British politicians the power to negotiate our own trade deals around the globe. This clean Brexit is what the British public voted for in such large numbers at the referendum. Any deal that involved membership of the single market – which is being promoted by some Remain campaigners unwilling to accept the verdict of the British people – would be akin to a phoney Brexit and totally unacceptable.”
Bitter fight over Brexit set to overshadow Conservative conference | Politics | The Guardian
But the economic cost will be significant...
Leave voters in Sunderland – 61% in favour – will have woken up on Friday to the news that Renault Nissan, the largest car plant in Europe and a crucial pillar of the local economy, employing 7,000 people, has deferred all new investment until the details of Brexit are clear. The chief executive, Carlos Ghosn, explained that it was not because the company did not value its Sunderland plant, its most efficient. Rather, as a major exporter to the EU, its profitability depends on the prevailing tariff regime, which promises to change sharply for the worse. “Important investment decisions,” he said, “would not be made in the dark.”
If so, Renault Nissan will face up to 10% tariffs on the cars it ships to the EU. Unless the UK government is prepared to compensate it, a bill that could top £350m a year, it cannot make new investments. The Sunderland economy will be devastated. The same is true for the entire UK car industry. Last Wednesday, Jaguar Land Rover made similar remarks: if the position had been more explicit and fairly reported rather than airily dismissed as Project Fear, the wafer-thin 3,800 majority for Leave in Birmingham might have switched their vote.
Every part of our economy involved in selling into Europe will be affected both by the rise in tariffs and by the new necessity to guarantee that our products and services meet EU regulatory standards, the so-called passport. This doesn’t only apply to the City where 5,500 UK registered firms turn out to hold the invaluable passport, but to tens of thousand of companies across the economy.
Nor do hard Brexiters confront the fact that alongside China and the US, Britain has accumulated a stunning $1tn-plus stock of foreign direct investment. Nearly 500 multinationals have regional or global headquarters here, more than twice the rest of Europe combined. They are here to take advantage of our ultra pro-business environment – so much for the Eurosceptic babble about being stifled by Brussels – and trade freely with the EU. Britain was becoming a combination of New York and California, with a whole continental hinterland in which to trade. Hard Brexit kills all that stone dead and puts phantoms in its place.