This is the Financial Times on 8th May. How much clearer do you need it?
Michael Gove says leaving EU would mean quitting single market
Leave campaign would opt to quit trade bloc post Brexit
Michael Gove says leaving EU would mean quitting single market Leave campaign would opt to quit trade bloc
May 8, 2016 by: Emily Cadman and Henry Mance
Britain will quit Europe’s single market if the country votes to leave the EU, Michael Gove, the Leave campaign’s most senior figure, has confirmed for the first time.
The admission, which the vast majority of economists have warned would be the most disruptive option for the UK if it left the bloc, was seized on by pro-EU campaigners, who warned of the long-term damage such a move would bring. Chancellor George Osborne said that walking away from Europe’s tariff-free area of 500m consumers would be “catastrophic for people’s jobs, their incomes and their livelihoods”. Mr Gove, who is also justice secretary, said he wanted the UK to be “outside the single market but have access to it”. Full access would include paying into the EU budget, implementing Brussels’ regulations and accepting free-movement of people — requirements anathema to the Leave campaign. The clash over the single market is the first sign of how both campaigns are sharpening their focus since putting last week’s local elections behind them and with less than seven weeks until the referendum. In a jab at his cabinet colleague, Mr Osborne said: “Some people think wrecking the economy is a price worth paying — I absolutely reject that.” He added that house prices would suffer a “significant hit” if Britain voted to leave, in an appeal to older voters leaning towards Brexit. Sir Michael Rake, chairman of British telecoms group BT, said that membership of the UK’s most important trading market was “critical to the economic security of the country, investment and jobs” and Paul Kahn, president of Airbus US, said its business model was “entirely based on our ability to move products, people and ideas around Europe without any restriction”. Juergen Maier, chief executive of Siemens UK, said it was “staggering” to suggest that Britain should leave the single market. UK’s EU referendum: full coverage and analysis Mr Gove’s argument that the UK would easily be able to negotiate bilateral trade agreements once it is outside the EU has met a frosty response internationally.
US President Barack Obama said the UK would be “at the back of the queue”, and senior European lawmakers have warned that there would be “no special treatment” for Britain. Mr Gove has also suggested that the UK could join the likes of Bosnia and Albania in a European free-trade zone, but experts have pointed out that these arrangements were designed to help scarred countries seeking to join the EU. However, some respected economists argue that the warnings of economic pain outside the single market are misplaced. Roger Bootle, founder of consultancy Capital Economics, recently said he believed the benefits of the single market had been “greatly oversold”. “Plenty of countries around the world have had great success selling into the single market without themselves being a member of it,” he said, citing the US and China. Related article FT View: Brexit is too high a price to pay over migration Britain can manage the inflow of EU migrants by investing more Simon Walker, director-general of the Institute for Directors, told the Financial Times that while companies did not have a unanimous view on Europe, and most loathed red tape, “they value access to the single market”, and that was one of the main reasons about 60 per cent of his members were intending to vote to remain. Mr Osborne said that the Treasury would soon publish a dossier on the short-term impact of Brexit, which would include warnings of lower property values and higher mortgage costs. That research would add to the Treasury’s long-term projection that households would be an average of £4,300 worse off within 15 years if the UK left the EU. But while most analysts agree that the housing market, particularly in London, would be hit by Brexit, the likelihood of higher mortgage costs is far more contentious. Most economists, regardless of whether they believed the long-term impact of Brexit would be negative or positive, expect there would be a short-term negative shock to the economy. The most likely response from the Bank of England would be to cut interest rates to help a weaker economy, not raise them. Additional reporting by Sarah Gordon
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