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Britain’s Relations with the EU: How Loose is Loose?

Over the historical long run Britain has been a champion of free trade. To their credit most Westminster politicians are today in favour of free trade between Britain and the European Union’s member states, and see this as the vital part of the larger relationship with our neighbours. But that admirable belief has made these politicians vulnerable to a trick of words and led them into a serious misunderstanding.

The phrase ‘the single market’ has been part of the lexicon of European integration since the 1980s. Indeed, the Single European Act of 1986 was marketed to the then Prime Minister (Margaret Thatcher) and her supporters on the basis that it facilitated ‘the single market’. The phrase has a clear connotation. A nation that belongs to and fulfils the conditions of the EU ‘single market’ thereby achieves free trade with other EU member states. By implication, EU membership is desirable if both the ‘single market’ can be retained and the many acknowledged disadvantages of membership can be somehow jettisoned. These acknowledged disadvantages include the intrusive and burdensome regulations contained in the massive corpus of EU legislation known as the acquis communautaire. Even worse is Britain’s subjection to the European Court of Justice, a foreign court with foreign judges, in disputes relating to the acquis. The ideal would surely be for us to combine ‘the single market’ (which we want) with escaping from the acquis , the ECJ and the associated mistakes (which we don’t want at all). Of course, the word acquis is French and in this context it could be translated in several ways. But it can be characterized, in a nutshell, as ‘the body of foreigners’ law that the UK must accept under the terms of its current EU membership’.

It is this analysis, with its distinction between ‘the single market’ and the acquis, which justifies the case for renegotiating our membership of the EU. The framework for the renegotiation intended by David Cameron is in fact already well-known and much discussed. It is likely merely to be confirmed by his speech on Europe, as and when he delivers it. He will tell our European partners that we would like to stay in ‘the single market’, but to ditch as much as possible of such monstrosities as the Common Agricultural Policy and the Common Fisheries Policy, and also of the rules and regulations in the acquis. What Britain wants, in short, is to trade in ‘the single market’ without the acquis, without being subject to foreigners’ laws and foreign courts.

But Mr Cameron must wake up. He is subject to an illusion that has arisen from going along too readily with a flow of rhetoric; he has not thought hard enough about what the words and phrases in the European debate actually mean. (Let it be said the then Mrs Thatcher had the same trouble in 1986. She came later to regret being duped by Foreign Office civil servants about the true purposes of the Single European Act.) The point is that ‘the single market’ and the acquis communautaire are not two separate items on a menu that can be chosen according to taste; the single market and the acquis are one and the same dish, and must be digested together. A nation cannot remain in the EU unless it complies with the acquis.

Strictly, the word acquis is a noun translated as ‘that which has been acquired’. The larger significance of using this word, rather than, say, ‘law’ or ‘constitution’, is that its 120,000 pages of directives and regulations have accreted and become fixed over 60 years of European integration. They are the product of the negotiating, compromising, bickering, arguing and reconciling, agreeing and disagreeing, backscratching, lobbying and general politicking of that 60-year process. If the acquis can be re-examined and renegotiated by one member state, the entire EU in its current form is up for grabs for every member state. If so, the EU would be dead.

Unfortunately for Mr Cameron, it is the acquis that specifies the conditions that must be met by every member state if it is to participate in the single market. The rules and regulations that damage labour market efficiency and destroy jobs – such as the Working Time Directive, the Part-Time Work Directive and the Directive on Temporary Agency Work – are integral to ‘the single market’; the environmental directives (the Nitrate Directive, the Integrated Pollution and Prevention Control Directive, etc.) take effect in the UK because of the treaties that empower ‘the single market’; the 20-20-20 drive towards renewable energy (under the 2009 Renewables Directive and related instruments) owes its force to being enforceable as part of ‘the single market’. The acquis – with all its burdens and costs – is indistinguishable from ‘the single market’, where that three-word phrase means ‘the single market that is available to EU member states as a result of their membership’.

Let us return to the opening paragraph. Britain has been a champion of free trade; it should remain a champion of free trade. What we want in our relationship with our European nations is the ability of for our citizens to trade freely with the citizens of those nations. That is all we want. We do not want or need the EU’s shabby so-called ‘single market’ and its disastrous acquis communautaire, with all the associated commissioners, bureaucrats, judges and miscellaneous foreign bossy-boots. We must leave the EU. Goodbye to all that.

Once we are outside we can negotiate a free trade agreement with the EU, as have several other countries. Over 160 non-EU countries in the world buy and sell goods and services with the EU, on a relatively free basis under the auspices of the World Trade Organization. When we have left, we can recover our sovereignty in full, make our parliament the source of all our laws and our own Supreme Court the highest court in our land. The restoration of independence would enable us to lower taxes, to lighten the regulatory burden, and to pass employment-friendly legislation geared to the creation of more businesses and more jobs.

We are more likely to travel to that promised land by first clarifying our vocabulary and then using words with care. The phrase ‘single market’ has misled Britain’s politicians for over 30 years. We do not want ‘the single market’, with its inescapable accompaniment of the loathsome acquis communautaire, inside the European Union; we want free trade with our European neighbours from outside the EU.

*Professor Tim Congdon is an economist, Chairman of the Freedom Association and runner-up in the 2010 UKIP leadership election.

Professor Tim Congdon CBE

Tim Congdon is Founder and Chairman of The Institute of International Monetary Research at the University of Buckingham. He founded Lombard Street Research in 1989, where he was managing director (until 2001) and chief economist (from 2001 to 2005). He also served for five years (1992-97) as a member of the Treasury Panel of Independent Forecasters, the ‘Wise Men’. His books include Central Banking in a Free Society and Keynes, the Keynesians and Monetarism, while his Politeia publications include QE for the Eurozone: Sensible, Appropriate, and Well-Calibrated (2015) and Providing for Pensions: Savings in a Free Society (2005).

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