Leaving the EU: a proposal

Remain voters must accept the fact that it is highly likely that Britain will leave the EU but it is not certain.

I was a remain voter but it is nonsense to suggest that I would take any comfort in the possibility of there being a recession as the result of a leave vote and as a result of me being in denial or bereft at the result.

https://www.theguardian.com/business/2016/jul/17/uk-economy-brexit-failed-economic-policies

For me, it was and still is desirable that we should remain members of the the EU for political, cultural and economic reasons which I have laid out already in other blogs on this site. I believe that our nation will be diminished if we turn our backs on our nearest neighbours. But, real politik suggests that we could leave the EU within a short period of time and that other options should be put to the people which should be considered by parliament. I believe that there is another option which both leavers and most of the remain voters could support which would truly represent leave and remain thinking but of course there will be a substantial majority that will not support my proposal but more of that later.

Britain has not considered any sort of  plan for what happens after we leave the EU and it is now being left to Leave ideologues to plot our departure. These ideologues must consider the political, foreign policy and economic consequences of Britain leaving the EU. The Prime Minister is duty bound to critically examine their proposals. The Brexit community must be able to demonstrate that Britain will actually be better off by leaving. As any business knows before making a complex and important decision there must be a cost and benefit and risk analysis and a plan. Any form of  risk mitigation must be examined to ensure that it will be effective. We are jumping into the unknown and the British people should be fully appraised of any risks they are taking. All options for leaving the EU should be thoroughly and critically examined by parliament and independent economic bodies such as the IFS.

Let us be certain, the EU referendum was not a choice about whether immigration should be curbed or not. Many Leave voters that I spoke to were quite happy to accept free movement of labour from the EU combined with very liberal policies concerning the movement of people from non-EU countries. These voters wanted to leave the EU for reasons of national sovereignty and national independence. It is not possible to assess how many voters were in this category but of course they were in the minority.

It is my view that the overwhelming majority of Leave voters want to either curb immigration or reverse it; all as a matter of policy - not security. The majority of Leave voters, however, do not support forced repatriation of foreigners. The whole issue of immigration is not as simple as ardent Brexiters claim it to be and immigration should not be the primary issue when deciding what option is best for Britain and the rest of the EU.

I am proposing a Norway plus option which we should be able to negotiate and which I shall expand upon later but first some of the reasons why. I examine the issues for my proposal below

Britain's wealth

Brexit campaigners promised that Britain would become more wealthy if we left the EU and the single market. If this is so then they should prove it. It is not obvious. If it is obvious then we should invoke Article 50 of the Lisbon treaty immediately to try to end uncertainty. Business could then plan for the worst case scenario: trade on WTO terms but with reduced immigration but this might not bolster the economy. Brexiters know that we need access to the single market to guarantee our prosperity. The promises that we can negotiate better trade deals for ourselves without using EU negotiators and EU influence must be shown to hold water. I seriously doubt that the Brexit promises of greater wealth can be achieved by a completely go it alone attitude. Britain is now the 6th largest economy in the world as overnight on June 23rd it fell behind France. We are likely to enter a period of recession or seriously impeded economic growth therefore we could fall behind Italy. Our negotiating position becomes weaker as I write.

Our economic future can only be guaranteed in the short and medium term by being a member of the single market. If we leave the single market we face the possibility of an extended period of weak economic growth which will affect our ability to fund public services. The lack of investment will lead to our nation to becoming poorer.

Some of the effects of poorer economic growth will need to be mitigated by a redistribution of wealth as proposed by the new British prime minister but will she be able to deliver? Will the middle classes agree to the tax increases necessary and will corporate Britain comply? There will need to be a new one nation covenant to protect the poor.


Immigration

Whether we like it or not we have to tolerate immigration. Britain's economy is modelled upon importing labour. The economic plan for Britain provides for another million or so immigrants by 2020. It looks as though the EU will not allow Britain access to the single market without accepting free movement of labour. Even if we were to leave the EU we will probably have to be realistic and still allow hundreds of thousands of immigrants to come to Britain from the rest of the world. We might only be able to reduce immigration by tens of thousands.  The benefit of reduced immigration will be far outweighed by the cost of leaving the single market.

A cost benefit analysis will probably reveal that we are better off staying in the single market by accepting free movement of labour. This will need to be sold to the general population by explaining the real problem of leaving the single market. The government must then demonstrate a willingness to achieve a one nation covenant to improve the employment opportunities and wages of the poor. To improve the education and skills of the disadvantaged and to improve their housing prospects and public services where immigration levels are high.

Internal politics

Scotland is committed to staying in the EU. There is a serious danger that the UK could break up if their desire to remain in the EU is thwarted . Some may welcome this but I do not. We need to find a way to keep Scotland in the union by maintaining a sufficient level of closeness to the EU so that Scotland will choose to stay in the UK.

Northern Ireland voted to stay in the EU but it is ruled by a party which supported Britain leaving.This might lead to serious political conflict. It is in the interests of Northern Ireland to maintain close economic and social links with Ireland. It is not in the interests of Britain or Ireland to have a "closed" border between our countries by introducing customs or immigration controls. It is essential that the common travel area is maintained.

Wales: recent opinion polls in Wales indicate that the Welsh have changed their minds and that a small majority of the population are now in favour of staying in the EU; now that the full economic implications of leaving are being appreciated. A change of mind in Brexit England could happen as well if there is a recession.

London generates 30% of the tax revenue of the UK and it voted to remain in the EU the government cannot ignore this economic fact. London and the UK need access to the single market if the nation is to flourish. The EU is about to extend the single market to services which make up 80% of our economy. The single market for services  will provide an incredible business  opportunity for the UK's service providers no matter where they are located. Why throw this opportunity away?

The divisions between North and South an East and West and better off and less privileged need to be healed. The views of Remain must also be taken to account. Also the views of those who did not register to vote or chose not to vote, if registered, must also be taken into account by their MPs. Non-voters made up a substantial minority of the referendum voting population and their views need to be taken into account by parliament.


Foreign affairs

Our nearest neighbours and supporters in Europe, France and Ireland, are disappointed. Ireland especially as they have the most to lose economically from Brexit. Ireland also has to worry about serious political division in Northern Ireland.

France is one of our oldest, closest and important allies. I was in France on June 24th and the idea of Brexit was just as big an issue in France as it was in Britain. My French friends and family were talking about nothing else. One thing is certain, however, the French people will not tolerate French or other EU citizens being turned away from Britain on the French side of the channel. If we impose freedom of movement restrictions on EU citizens then the barbed wire will have to move back to Kent.

The US sees it as being in their geo-political interests to have the UK in the EU or as close as it can be. We would be foolish to ignore the view of the US as they might ignore us in the future and their view of  the special relationship might transfer  from Britain to Germany and France.

Spain has already posited the view that there should be joint sovereignty over  Gibraltar leading to Gibraltar finally becoming united with Spain. This could become a reality especially as Gibraltar has voted overwhelmingly to remain in the EU. Why should the UK let Gibraltar down? Gibraltar is in a strategic position,and probably the US would prefer that the rock stays in British hands.

Poland is one of Britain's strongest supporters so why annoy them by restricting their citizens access to our labour market. Poland's economic power is growing. Poland is a positive ally who will support a good deal for Britain along with France and Ireland.

Defence

Britain has refused the formation of a European army,navy and air force. Donald Trump has indicated that if elected he would reform NATO and expects Europe to pay its way: he is more of an isolationist. We could be forced to review our defence policies and join in with a European defence force if NATO is substantially weakened.

The environment

We all want to breathe clean air and swim in unpolluted and fresh water. The environment does respect political boundaries it is in our self-interest to protect our environment in concert with our European neighbours.

Cultural and family ties

Whether we like it or not there has been substantial demographic change as a result of freedom of movement. Many citizens have chosen to uproot themselves for family, economic, cultural and health reasons. Millions of citizens have migrated both ways so why spoil their lives by forcing them to relocate? Does Britain want to have a million plus disgruntled voters returning to  Britain to upset the political apple cart just because we cannot tolerate foreigners in our own country?

My proposal

My proposal is for a Norway plus option as outlined below.

We leave the institutions of the EU but we stay in the single market. For this we accept the freedom of movement of citizens that EEA members enjoy. A substantial proportion of leavers will support this as will virtually all remain voters. Non-voters will probably accept a decision by parliament to approve this. A proportion of xenophobes will reject this completely but they will have to accept it as it is in the economic best interests of our country to be part of the single market.

We negotiate a say in the development of the single market as if we had not left. Britain has a big enough economy to negotiate this and this will be probably be supported by France, Ireland, Germany and Poland. Britain would have to pay into the European budget to gain access to the market but it will be worth the price from an economic point of view.  Britain will be able to exploit the upcoming single market for services. Scottish and Northern Irish views will be taken into account.
All this will be in the economic interest of the remaining EU states as well as the UK.

In common with our former European partners, it is in our interests to promote world peace and security along with support for democracy, freedom of speech and human rights. There is no reason why we cannot write a treaty to achieve common interests with full voting rights for Britain:  our European partners will probably support this as will the US.

As far as the environment is concerned we should agree a treaty to enact measures which are in the joint interests of both the EU and the UK.

We agree a treaty with Spain and the EU over Gibraltar which will allow a free Gibraltar to maintain its ties with the UK but allow them to join the EU.

Cultural and social ties with the EU, the EEA and Switzerland will be maintained by freedom of movement rights and will remain unchanged and undamaged.

Parliament approval

Of course, my proposals will need to be critically examined for costs versus benefits.

I would prefer it if we stayed in the EU and this might turn out to be best option. The British people might change their mind if there is a recession resulting from the EU referendum and the full consequences of leaving hit home.

If we must leave then I believe that my proposal will meet support from all of the voters who chose to remain in the EU and a substantial number of leave supporters - enough to form a majority of voters. Non-voters will be looking for guidance from parliament so there must be a free vote of MPs before an option is considered and recommended and this should be before we invoke Article 50. Parliament should also approve any agreement negotiated between Britain and the EU after Article 50 is invoked and before we actually leave the EU.

My proposal will satisfy  most of the population of the UK as it allows us to leave the institutions of the EU but retain access to and influence over the single market and exploit the new EU single market for services. This will be in exchange for allowing perhaps two or three hundred thousand more people into the country under freedom of movement rules. Britain is a rich enough country to support freedom of movement.

The proposal caters for Scotland and Northern Ireland and our international relations with the EU and the rest of the world. It is a good compromise which should achieve a consensus of support from the electorate of the UK and of course it is in our best economic, social and foreign affairs interests.

I feel sure that our EU partners will accept this positive proposal as it is in all our interests to maintain close relations. Such an agreement could be negotiated quickly as it is very close to the Norwegian option.

Brexit implications

Vote leave supporters may not get what they bargained for. They have probably taken aim at the wrong people and blamed them for  the predicament of the country.

Unfortunately, the poor and disadvantaged will not see their lot improving. Since the 1970's there has been a redistribution of wealth. This has been from the poor to the rich. It started when council houses were sold to private individuals and the proceeds of the sales were not re-invested in more council and social housing to replace the properties which were divested. The private sector for housing has never been able to provide sufficient houses for the growing population.

Successive governments have sold valuable government assets such as the railways, the post office and the energy industries to shore up public finances. As Harold Macmillan put it: the nation has sold off the family silver - he was an ex-Conservative Prime Minister. Some industries such as the car industry or telecommunications benefit from privatisation and these sell offs have benefited the economy in general. But the sale of the housing stock and other key industries has only exacerbated transfer of wealth and power from the people to corporate organisations.

The de-industrialisation of the economy has contributed to a loss of real earnings so that wages have hardly risen in 30 years. The transfer of the means of production to other nation states has also resulted in a loss of earning power. Trade union power has been emasculated so that workers rights and living standards have been cut without challenge. Millions of  people have been forced into low paid self-employment or zero-hours contracts and they are struggling to just feed their families let alone pay bills. Hundreds of thousands are relying on food-banks to make ends meet.

All in all the re-distribution of wealth and reduced earning power has meant that large sections of our society are living without hope of improvement in their living standards. Millions of our citizens have simply been left behind and they have been failed by both major political parties. Millions of people have been forced to turn to obtaining credit from "loan sharks" to make their lives just about bearable.

They are victims of a lack of social housing so that many have to pay almost un-affordable rents to private landlords to find a place to rest their heads. Millions of working people just want to be able to hold their heads up high. They want decent jobs that pay decent wages so that they can have a half decent life and pay their way without hand outs. It is no wonder that they want to kick out against the establishment.

The EU commission is responsible for none of this - all of our wounds are self inflicted.

The British economy, in general, has prospered in recent years after it came out of the financial crisis of 2007/08.

The British economy in the main, however, is a low productivity one which depends on  a source of low paid labour which is flexible and which can survive the economic tribulations of zero hours contracts and lay offs. These low paid workers are young and do not have families. And, like all young people without children they are prepared to move house and live in multiple occupation flats. Only young immigrants can tolerate these working conditions.

There is another British economy which requires high skilled workers in information technology, finance,telecommunications, medicine and aerospace etc. There is a shortage of these skills coming from the indigenous population and the only source of these skills is immigrants.

Oh yes, immigration, half of the voters in the referendum were frightened of it, Some of those voters were just xenophobes and many were racists. The poor and disadvantaged voted leave out of protest. Some of the voters were just interested in sovereignty but they all made common cause believing that reducing immigration would solve all our or their problems. It won't as will be seen over the next five to ten years.

The trouble is Britain's economy sucks in immigrants and it cannot grow without them. The economic model relies on either low paid workers or pinching skilled and well educated people from other nations. The Vote Leave leaders have promised economic sunshine but if their model economy is to grow it has to suck in even more immigrants.

If the Vote Leave project fails then the economy will go into recession and then hurrah most of the immigrants will go home. But then many many British people will lose their jobs and the economy will not be able to afford more hospitals, creches and doctors. The housing market will collapse and there will still be a shortage of social housing. Unemployment will bring down wages and the economy will not be able to afford child benefit. We shall be out of the single market and freedom of movement restrictions will mean that young people will have nowhere to go to find work.

There is only one way to help the poor and disadvantaged and bring down the need to import cheap labour. We need a new economic model which re-distributes the wealth and earnings of the nation in favour of the poor and disadvantaged. This will not be achieved by some sort of dangerous ultra-left wing or ultra right wing revolution. We need one nation type politicians such as Clement Attlee or Harold Macmillan to do something for the poor and the struggling middle classes. We need to build houses, hospitals and doctors surgeries. We need an education system that produces well rounded students. We need creches and good health care for our children.We need a workforce that can afford to move location with their  families to fill well paid jobs. We need a more productive society. However, to achieve peaceful and sustainable  change it will take years. Some people may not have the patience so we could be in for a rough ride. Some politicians are completely opposed to changing the economic model so the situation could become even worse.

Unfortunately the "efficient markets" philosophy which has monopolised economic policy since the 1970's cannot provide an economy which provides for the poor and the struggling middle classes as well as for the rich.  Our country has enough resources to provide a decent standard of living for all our poor and disadvantaged people and our immigrants who have contributed enormous sums of wealth to our economy; but our country chooses not to distribute the wealth and income anywhere near equitably.

Vote Leave politicians are going to provide us with more of the same old economic story. We need strong leaders with a completely different vision - come back Attlee and Supermac.

If we cut ourselves off from the European single market to spite our economic faces, in the vain hope of reducing immigration, then we could suffer and the poor will suffer most. There are many Europeans who think the same way as me . It would be better to unite with them to find a better economic solution for all Europeans rather than just carry on with business as usual but without the Bulgarian strawberry pickers. Do you want to see the fruits of an economic recovery left rotting in the field?