Leaving single market - what would the effect be?

[LittlePickleHead]

I'm trying to accept what's unfolding, and to garner some positivity towards the future out of EU.

So, if we do get Gove as prime minister, he has previously said he would like to leave the single market and according to DC like to cause destruction because good things come from it (?!)

So. We get Gove. He negotiates withdrawal from single market and we impose very strict rules on immigration.

What's the likely effect on the economy? On the financial industry?

What is Murdoch/Dacres game plan in all of this (they will have a significant amount of input no doubt). Surely the destruction of the economy is in no ones interest?

My head is hurting. If anyone has any insightful ideas about any of this would love to hear them

It means we're fucked, the City is fucked, and the economy is fucked.

Ok not quite the reassurance I was hoping for

But - surely no government wants us to be fucked? Especially as this would all unfold before the next general election.

Does this mean that leaving the single market completely is not likely?

Our government would be insane to want to leave the single market - we would be completely fucked. However, it is by no means guaranteed that the EU would let us join.

Well quite - they have been very clear about the need for free movement.

We could still trade with the other members of the EU but would just have to pay tariffs on our imports and exports from them - about 2.5% at the moment.

But my point it what would be the fallout and long term effects? I've read experts say that complicated trade deals can take much longer than 2 years to agree on - more like 5 or 6. I think it's fair to say that if thy lose passporting rights, the financial services sector will be moved out of London (was reading from someone in the industry that they wouldn't have a choice as would not legally be able to trade). And surely any mass loss of industry/jobs out of the country is going to affect our economy and therefore our negotiating position is weakened anyway?

It seems such a huge risk to whoever is PM to take

We would take years to negotiate the kind of access agreements that permit this level of trade. They take years and years.

Without some kind of single market access for services (80% of British economy), we will be building all of those relationships from scratch. And we'd need to hire the people to do it as apparently we have about 20, and the US for example has 100s.

there would be a lot of bread and butter PAYE tax payers that the government would rely on just going or being reduced which would be bad for the economy in terms of tax.

The UK is irresponsible as it is with tax in that we don't collect enough. Companies might leave to go to Europe based places instead and also if the necessary increases in corporate tax are instigated then we are told allegedly this would put off business and hence jobs.

Costs will go up so the only way worringly suggested to mitigate it, is to start ripping up employment benefits as per Priti Patel. Who says we need to to make business more profitable i.e take it out of your pocket and put it in the CEO's/shareholders etc instead.

The electorate have voted to go back to more manual wage economy.
They don't care about The City & passporting & services.
They want coal mining, steel works & poundland shops.

Break ties with Europe and Britain is free to become another 53rd state of the USA, thereby letting the next American president call the shots for Britain rather than Europe.

Plus we get to kick all the European bankers out of the city and up investment in and immigration from places like China and India.

I think that we won't take the years suggested to get trade deals as we already meet the criteria to be part of these markets as we already are in them. Unlike the likes of Canada etc. we would ot be negotiating from scratch.

Actually, this is what I want to know, if leaving free market will have negative effect on economy (as per most economists), does Gove genuinely not believe them? If so, what assumptions is he making for our future where it will be a positive thing?

If he does believe them, but is ignoring as wants to leave Europe, why? Why would you want to ruin a country or be the leader of a ruined country?

I know his official stance is the first, experts are wrong, but don't know what evidence he has produced to support this.

Perhaps he's hoping they dont win the GE and maybe UKIP coalition and can put it all on them and 'the peoples mandate'

Gove said that experts who predicted economic problems post Brexit were not credible and that their views should be rejected.

"I think people in this country have had enough of experts," he said.

Radio4 now saying that Gove is only standing to make sure Boris doesn't. That kind of fits, tbh, Gove doesn't really want to be PM. Also it's a parting apology to his mate Cameron.

So if Gove doesn't want it, who will get it?

(Thanks for link, so basically he is saying Euro economy is fucked so relying on them as principal trading partners will bring us down too?).

It'll all depend on what access to the single market is secured through negotiation. The Germans are definitely coming down on the side of pragmatism, and there are glimmers that the French are too.

So yes, a tariff is possible. No, no-one can say how low we can get it. And it's actually in EU's interest to set it really low as well, and not change much of existing arrangements.

They key to negotiation is how to pull that off in a face-saving way.

not quite the reassurance I was hoping for
Maybe so, but if anything, its heartening to see pertinent questions being asked and an informed, unemotional debate here.

Access to single market by paying a small constant % tariff, rather than including free movement of labour/people to get passporting & single market access back? Good luck with that.

Even the highest tariffs are more than offset by the weaker pound, it makes imports more expensive and our exports more attractive.

Tarifs are there to give domestic industries an advantage and raise money for the government. Everyone seems to assume that we would merely mirror the EU Tarifs but forget that we could raise ours to give more protection for our industries.

Why, for instance, have low tariffs on fish when they are unlikely to sell us much but desperately need ours?

To my mind a free trade agreement is essential. We need this to reduce the impact of not being a full EU member.

Only in time will being able to negate our our agreements world wide pay off in greater growth and less reliance on the EU.

Not essential no.

At the end of the day it comes down to money, though simple assumptions that free trade on any terms is better don't necessarily equate to better for British business.

Why would the EU seek to punish Britain lest others leave unless leaving would be attractive otherwise?

Their attitude, specifically the EU's as it is not mirrored by the 27 national governments, is akin to that of a jailor.

Tariffs are not a big issue. Negotiating about tariffs doesn't take very long.

What takes ages to work out in trade agreements is regulation, standards, legal entitlement. This is why people are afraid TTIP will give US companies the right to sue the NHS. And how we know that items sold in Europe should have CE mark. And how we know countryX won't undermine our production costs by feeding their animals illegal antibiotics an paying their workers tuppence per hour. This part of trade deal negotiation is called "red tape" for companies. Each side has different priorities & the whole thing takes YEARS to work out. The side with the most leverage "wins". UK just voted to give up most of our leverage. Hurrah, let me find a wet lettuce leaf to wave about.

Tarifs are there to give domestic industries an advantage and raise money for the government. Everyone seems to assume that we would merely mirror the EU Tarifs but forget that we could raise ours to give more protection for our industries.

Most of our income comes from services sector, changes to that will have massive impacts. that i dont see could be made up by other industries.

Now if you had a leave campaign for free education and leaving euro so we can massively subsidise our STEM, hi-tech and renewable industries, nationalise everything to keep the profits in country and use it for further development then that would be something else, but we dont.

Surely there must be some brains out there working out the best way to structure a pan-EU financial services company, so that they can satisfy EU regulatory requirements whilst utilising the massive pool of current UK financial services personnel here in the UK? Big Business is smart and adaptable. An EU HQ (to the extent necessary) with a large UK subsidiary would surely work, assuming the company finds it preferable to retain current staff rather than recruit/transfer overseas... In terms of these financial services, does the weaker £ have any benefit? Going with a trade tariff, even just the WTO one, would surely remove years of uncertainty from the market allowing businesses to adapt and move on (in whatever way that might be)? Surely we also have flexibility in our taxation policy to try to incentivise companies to stay?

All just questions in my head...I would love if someone could point me in the direction of some analysis of this scenario rather than just 'we're all fucked'. There has to be a way of salvaging our biggest industry!

All of the analyses I've seen are partial and full of assumptions based upon the prejudice of the writer.

Why the implicit assumption that we have to deal with the EU first always takes root is beyond me. Wto Tarifs would be greatly to our benefit as we import far more than we export.

Better to sort out the sorts of trading relationships that we want with the rest of the world. If we deal with the major commonwealth countries first, then decide how best to relieve poverty in the third world, we will know exactly what we want from an EU deal.

We need to rebalance our economy towards a global marketplace, hence our cousins have to come first.