22nd March 2016
The primary reason why I will be voting for the UK to remain in the European Union is the importance of the Single Market for British businesses. Our membership of the EU allows us unrestricted access to this market of over 500 million people. This is vital for the British economy. Were we to leave, I doubt we would be able to sign a satisfactory trading agreement with the EU.
If Britain votes to leave the EU we could negotiate a similar deal to Norway. Although this gives Norway access to the Single Market, in return they have to abide by all Single Market rules without having any say on what these rules are. Norway also has to make an annual budget contribution to the EU of £106 per head (compared to ours of £128) and to permit the free movement of workers from the EU.
I do not think that would be a satisfactory arrangement for the UK and, even if it were, I do not believe it would be acceptable to the British people. If the UK votes to leave the EU a key reason for doing so will be a desire to limit the free movement of workers from (mostly Eastern) Europe. When negotiating our new trading arrangements with the EU it would be impossible for the British government to agree that this continue unchanged. I ask you to consider how the electorate would react to a "new deal" that left immigration rules with the EU the same as they were before we left.
Other EU countries regard the freedom of movement of goods, services, labour and capital as indivisible. They are not a menu that we can choose from. Certainly Norway and Switzerland have had to accept all four. Were the UK to reject the freedom of movement of labour we would not, in my view, be able to obtain free access to the Single Market on even the unsatisfactory terms that Norway currently has.
Many of those who advocate leaving the EU say that once we have done so the EU will sign a free trade agreement with us because they export a lot more to us than we export to them. I think this is too simplistic. Whilst it is true that Germany and the Netherlands have large surpluses with the UK, the trade figures for the other 25 countries are much more in balance.
Any future trade deal with the EU would require the unanimous consent of the other 27 Member States. Different countries will have different agendas and trade will be only one of the matters they consider when deciding how to treat the UK.
I fear that if the UK votes to leave the priority for the remaining EU states will not be doing a good deal with us but rather to ensure that no other countries follow us. The EU has more to fear from us making a success of our departure than from our failure.
I believe that negotiating a trade deal with the EU would be difficult and time consuming. During that period (which is likely to be longer than the 2 years provided for by Art 50 of the EU Treaties) business confidence and investment would suffer. It is inevitable that this would damage the British economy.
I expect that the UK would eventually conclude a trade agreement with the EU, perhaps based on the deal that has recently been done with Canada. This would probably cover most goods but is unlikely to extend to services. As 78% of our economy is service based, the UK would be in the unfortunate position of not being unable to trade freely in the economic sector where we are strongest.
Without access to the Single Market the City of London would suffer greatly. I would expect the Eurozone to adopt discriminatory rules in order to cause it maximum disadvantage and to ensure the relocation of as many jobs as possible to Frankfurt and Paris. Whatever your view of the City, as things stand it is a hugely important part of the UK economy, generating a very large amount of tax revenue which in these challenging times we can ill afford to lose.
I am also concerned that were we to leave, the EU would change for the worse. Without Britain as a member it would become more protectionist, less economically liberal and not well inclined towards us. They would treat our separation as akin to a divorce. I think we all know of couples who tried to separate amicably but ended up in a bitter dispute.
I want you to know that I have not reached my decision lightly. I accept that there are good arguments in favour of leaving the EU. I resent the European Court of Justice having the power to overrule British courts. The EU costs us too much money and it does not spend wisely much of the money it has. I don't like the Common Foreign Policy and think the Common Defence Policy duplicates NATO and wastes resources. I could go on, but in my judgement, the benefits to our economy in remaining in the EU outweigh the costs we pay.
I know that there will be good Conservatives on both sides of this argument. Each one of us will reach our decision in good conscience and vote for what we believe is best for our country. On 24th June the Conservative Party will implement the decision of the British people, whatever that may be. We will then need to reunite in order to see off the threat of the most left wing Labour Party Britain has ever seen.
Ashley Fox MEP