Nobody with any serious understanding of economics expects the UK to gain from making trading between it and its major export market harder. It is very difficult to find a leave advocate that can articulate the economic justification behind leaving the EU in anything other than the most generic of terms: jumbo trade deals; best possible EU-UK trade; frictionless borders; global leader in free trade etc. These are just aspirational slogans that provide no more detail or substance than the daddy of them all, “Brexit means Brexit”. Whilst leaving the EU us a decision that the UK can take unilaterally, the rest depend on the disposition and good will of the EU and nations in the wider world, all of whom will have their needs first and foremost, not those of the British.
The UK election has significantly weakened the position of Prime Minister Theresa May and it wasn’t that strong before the election. One consequence of this is that plans to move Chancellor Philip Hammond out of the Treasury have had to be shelved. Hammond is widely seen as the most pragmatic Europhile member of the Cabinet and a voice arguing for “soft Brexit”. Whereas May’s position is that Brexit demanded a control of immigration, leaving the Single Market and Customs Union, renouncing the sovereignty of the European Court of Justice and reasserting “control” of UK borders, her Chancellor has called for a Brexit for jobs and prosperity, pointing out that the electorate had not voted for Brexit to become poorer (remarkable how much information a politician can glean from a cross on a ballot paper…).
Speaking at the Mansion House, Hammond argued that transitional measures would be essential post Brexit to protect key industries and that the needs of the UK economy and businesses must be at the heart of the Brexit process, noting: "The future of our economy is inextricably linked to the kind of Brexit deal we reach with the EU over the next 20 months. I am confident we can do a Brexit deal which puts jobs and prosperity first, that reassures employers that they will still be able to access the talent they need, that keeps our market for goods, services and capital open, achieves early agreement on transitional arrangements so trade can carry on flowing smoothly. The collective sigh of relief would be audible. The benefit to our economy would be huge."
Whilst confirming the UK’s intention to leave the Customs Union and Single Market, Hammond maintained that he wanted border and customs checks to be “as frictionless as possible” – which is a nonsense taken straight out of Boris Johnson’s have your cake and eat it philosophy. Hammond explained: "To do this in the context of our wider objectives will be challenging... it will almost certainly need an implementation period, outside the customs union itself but with current customs border arrangements remaining in place until new long-term arrangements are up and running."
Hammond claimed that leaving the EU could not be to the detriment of UK inwards investment, enterprise or productivity. It should surprise nobody that Hammond campaigned to remain in the EU.
The economic argument for that position has not been changed by a narrow referendum outcome based on a deeply flawed public debate – time perhaps for remain-minded politicians to demand answers from the leave side about exactly how the economic circle of Brexit can be squared. If this is not forthcoming, maybe the UK should accept President Macron’s invitation to abandon Brexit entirely – the collective sigh of relief would be deafening.