Brexit could cut us off from the Single European Market

Reporting for The Independent on 01 June 2016, Harry Cockburn quoted Michael Gove, a prominent “Brexit” campaigner as saying, “…the automatic right of EU citizens to live and work in the UK will end”, in the event of a vote to leave in the upcoming 23 June Referendum.

Mr Gove went on to advocate a “points-based system [that is] is fair to everyone…” method of determining who Britain should or should not allow into the country and work here, claiming the current automatic rights system for EU citizens was unfair to those who lived outside the EU. Was fairness Mr Gove’s real concern or was it something else?

Denying free movement to citizens of the EU trashes one of the four core principles of the EU Treaty and as the gentleman has been Lord Chancellor and Secretary of State for Justice since May 2015, he will doubtless be very aware of such basics. It implies that Britain’s future relations with the EU would be no stronger than the EU’s with the United States or any other member of the World Trade Organisation (WTO).

Mr Gove’s deliberate hard line position could potentially isolate Britain from its biggest market, not in the immediate future following a vote to leave but in the longer term. No doubt he has also taken account of this and so it leads one to conclude that the arrangements under which Norway and Switzerland trade with the EU, will not be sought. Both these countries are bound by rules and regulations in their dealings with the EU and contribute to its budget.

For several weeks past, the media has been awash with items on the consequences of the UK leaving but nearly all that I have read assume that the country will seek a deal very similar to those two members of the European Free Trade Association (EFTA).

A typical example can be read in Glasgow’s Herald on 17 June. Matthew Anderson’s piece titled “All the numbers on jobs, the economy and trade show remaining in the European Union is best for Scotland” warns:

“In any event, if the Brexiteers’ problem is immigration, leaving the EU is demonstrably not the answer. Norway and Switzerland pay dearly for access to the single market, have no say whatever over the rules, and both have far more EU migrants in their countries per head of population than the UK does.”

I couldn’t fault Mr Anderson’s article and analysis – except, it does not take account of Mr Gove’s position and as many credit him (and his advisers) with being the real brains behind the Leave campaign, a few minutes on EU basics and the two aforementioned countries should be helpful.

The basic right of the “free movement of people and workers”, one of the “Four Freedoms”, was first established under the terms of the Treaty of Rome signed on 25 March 1957 and effective in the original member states of the European Economic Community (EEC)/Common Market from 01 January 1958.

Clarifications and refinements quickly followed as in any legislation, influenced by reports, directives, amendments, judgements and subsequent treaties, whereby a body of case law was established.

The need for order and method in how all this complexity of rules and legislation within the EEC could be practically applied was covered by a little known, to the general public at any rate, Treaty on the Functioning of the European Union, its current name, which in turn complemented and evolved to become the Treaty of European Union.

These nomenclatures were established by the Treaty of Lisbon (the “Consolidated EU Treaties”) and effective from 01 December 2009. Ever so detailed and divided into seven parts, attached are 37 protocols, two annexes and 65 declarations.

Dear to the hearts of all who would have us leave the EU, Declaration 17 reaffirms the European Communities Act 1972 and asserts the primacy of European Union Law over the law of member states if any conflict should arise.

There are further sections that pertain to satellite treaties and outline the correlations with treaties before the accession of that 1958 Treaty. For the very keen who seek further guidance, there’s a website that condenses it all in 403 pages.

Mercifully, a very good piece outlining some legal consequences of Brexit, is to be found in The Scotsman of 10 June. Here, Katie Hay of the Law Society of Scotland’s article: “Many areas of law would see changes big and small if Britain votes to leave the EU” is easy to follow, balanced, and takes account of the Prime Minister’s recently negotiated terms.

Negotiations with the EU on leaving, along the Norse-Swiss arrangement are assumed most likely so that only a small paragraph in a two-page spread refers to “If the UK exits and adopts a World Trade Organisation position” Ms Hay explains:

“… it would control its own immigration law and policy, borders and visas. Subject to any acquired or vested rights, EU citizens living in the UK would have to regularise their status. UK citizens in other EU states would have to comply with the immigration, residence and visa requirements imposed by those member states.”

Placing the law aside for the moment, this WTO position would/could find the UK facing tariff and/or quota barriers.

What’s the deal then between the two EFTA countries and the EU?

Norway with 5.2 million people has been a member of the European Economic Area (EEA) since 1994, accepting the core principles of free movement of persons, goods, services and capital within the EU and obliged to enact EU legislation on social policy, consumer protection, the environment and company law but with no representation in the European Parliament or European Commission. It is also subject to the rules and procedures of the European Court of Justice through the EFTA Court which is located in Luxembourg.

Might as well be a full member! The country does however retain full control of its agriculture, oil and fisheries.

Switzerland with 8.2 million is not a member of the EEA but is in the Schengen Area and through bilateral treaties with the EU (Bilateral I, Bilateral II etc), is a member of the European Single Market and ratified the “Four Freedoms”. It protects its agricultural sector by maintaining high domestic food prices.

Bilateral I, effective 2002, ensured free movement of people and this was reinforced by Bilateral II which included Schengen membership in June 2005. There have been lots of legal decisions taken at Council and Commission level of the EU, prohibiting “cherry picking” parts of different Bilaterals. Basically, fail one part and fail all.

Problem? Switzerland loves Referendums and in 2014 voted to have a quota on Croatian immigrants. The EU has issued a very strong warning and the Quota Referendum has not been implemented yet.

The cost to the two countries for these arrangements is not inconsiderable. The Daily Telegraph on 03 June in an article by Simon Johnson, cited Professor of Economics at Stirling University, David Bell who stated that Norway is paying a net contribution of £106 per head and Switzerland £53 per head.

All just goes to show that there is no such thing as a free lunch.

Leave a Reply