[...] the longer this referendum campaign goes on, the clearer it becomes: those campaigning to leave Europe are inviting the British people to make an extraordinary choice – to be the first major economy in history to deliberately choose a second-rate, more restrictive trading relationship for its biggest market. They want to rip up our membership of the single market – a market that Britain practically invented – in the hope of renegotiating a new arrangement.
We are duty bound to take this proposition very seriously. So let us properly examine the consequences for our economy. What would a new tailored arrangement, of the sort Canada or Switzerland have with Europe, mean for us?
If we take the Canada free trade deal as a guide, we know it would be damaging for agriculture and manufacturing. Our beef and pork exports would face tariffs, and our car manufacturers forced to comply with rules imposing additional costs based on where they buy their components. And, of course, there is British steel. We are doing everything we can to help British steel in these difficult times, but the idea that leaving Europe is the answer is a dangerous fallacy: more than half of our steel exports go to Europe. As Stephen Kinnock, the local MP has said, the last thing his constituents in Port Talbot need is to be cut off from Europe.
Leaving the single market would also hit our service industries hard – and this is where our economy faces the biggest risk. [...]
No real-world alternative to EU membership would come close to what we have now. Even the most ambitious trade deal on services the EU has ever struck – with Canada – falls radically short of single-market access.
The latest draft of the Canada deal runs to over 1,500 pages – 800 of which are reservations and barriers. A huge proportion of the deal is about restricting business opportunities, not opening them up. We could see new barriers for British business in every key services sector. [...]
Half of all international financial firms base their European headquarters in the UK. From their one office here, EU membership allows them to do business in all 27 other EU states. If we left, this right would be lost and thousands of firms could be forced to move staff or entire offices out of the UK and into the EU, meaning fewer jobs and less tax revenue for the UK.
People might say: “So what? Surely Britain will get a better deal than Canada or Switzerland? The EU needs Britain more than we need the EU.” That misunderstands the negotiation dynamics that would be at play. The EU buys £21 billion more of services from us – one country – than we buy from the 27 countries in the EU. In fact, of everything we sell abroad, 44 per cent goes to the EU, but of everything the EU exports, less than 8 per cent comes to the UK. How can those dynamics be good for the UK?
Governments in the EU would come under tremendous pressure from their domestic firms to discriminate against the UK. [...]
When you look at the consequences of leaving this market, you have to ask: why on earth would we do this to ourselves? I believe it would be needless and reckless – an act of economic and political self-harm.
In June, we can choose Britain’s future. We can choose to shape our world, not to be shaped by others. We can choose to stay in the biggest single market on Earth. We can choose economic security, not an unnecessary leap in the dark. We can choose to be stronger, safer and better off – and that’s what I hope the British people will do when the moment comes.
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