Last week the British Government released a White Paper outlining in the vaguest detail its plan for exiting the EU and forming a new relationship with Europe.
I say vague because the paper goes little further than repeating what Prime Minister, Theresa May conveyed in her Brexit speech on 17th January 2017.
However, there is some additional information that seems to suggest that Mrs May is trying to balance the competing demands of protecting the UK economy and business (which needs access to the single market in some form) and the Brexiteers within her own party who have always demanded a complete break from the EU regardless of the consequences.
Here is a breakdown of the new information the White Paper provides.
The White Paper states that, “in the last decade or so, we have seen record levels of long term net migration in the UK, and that sheer volume has given rise to public concern about pressure on public services, like schools and our infrastructure, especially housing, as well as placing downward pressure on wages for people on the lowest incomes”.
There is very little evidence to support this statement. The Financial Times recently reported that economists from the Centre for Economic Performance at the London School of Economics could find no link between falls in employment and/or wages and immigration when they look at the areas in Britain with the largest increase in EU nationals coming to reside there. The economists concluded that the fall in wages and employment was due to the slow recovery from the 2008 financial crisis not immigration. They also found that EU immigrants were younger, better-educated and more likely to be in work and less likely to claim benefits than UK-born nationals, which means they are more than compensating through their taxes and spending for the public services they use.
There have been a number of strongly worded concerns from the business community regarding the possible loss of access to the EU labour market following the UK leaving the EU. Here the Government has made a robust concession, stating in the White Paper that, “there will be a phased process of implementation to prepare for the new [immigration] arrangements.” This means that freedom of movement could continue for months, or even years following Britain’s exit from the single market, something that Mrs May will struggle to justify to much of the 52% who voted to leave because of the desire to reduce immigration. However, this move will go a long way towards reassuring businesses and cushioning the potential economic fallout of Brexit.
Even though we are officially leaving the EU, most of us will notice very little difference in our day-to-day lives as a bulk of the EU arrangements the government currently has in place will remain in place. On issues such as trade, security and customs arrangements, the government seems determined to keep things just as they are.
According to the Business Insider, the government desires existing trade schedules to also remain intact. Trade schedules are a description of our trading relationships with different countries and cover points such as tariffs and export subsidies.
It makes sense to keep these as they are and again, this will promote certainty and confidence within the business sector. As commented by the Business Insider, even if Britain could create all new trading arrangements with the EU in less than two years, this strategy would leave the country vulnerable to a raft of trade disputes that the government has neither the time nor resources to deal with.
Mrs May and her Ministers seem to have finally listened to the concern of businesses when it comes to the impact of Brexit. When compared to the tone of the Conservative Party Conference in October last year, this White Paper is far less ‘like it or lump it’ at its core.
Whether or not our exit from the EU turns out to be as smooth as the White Paper sets out, still remains to be seen.
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