A Brexit deal everyone can support - Common Market 2.0
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A Brexit deal everyone can support
About the ‘Common Market 2.0’ Group The Common Market 2.0 Group is an informal group of MPs who are committed to overcoming narrow tribal party-political divides, in the national interest. We don’t have a formal committee structure, and nor do we have any official designation or legal status. We are simply united by two core beliefs: first that MPs must continue to act to ensure that the UK does not crash out of the European Union (EU) without a deal, and second that the Common Market 2.0 proposals which are set out in this document represent the only form of Brexit that respects the referendum result while protecting the jobs and livelihoods of our constituents. The Common Market 2.0 Group wishes to thank George Peretz QC, Anneli Howard, Adrian Yalland and Prof Sir Alan Dashwood QC for their legal expertise and expert guidance. We would also like to thank the Essex Research Trust and Lord Sainsbury for their financial support.
Contents
Foreword 1
Leading the way in a 21st century Common Market 3
Respecting the referendum result without wrecking the economy: 3
why we need Common Market 2.0
The path to Common Market 2.0 4
A leading role in Europe, outside the EU 5
The EU and EFTA countries support our proposals 5
Common Market 2.0: more control with continued economic access 7
Common Market 2.0 offers new powers to control immigration 8
Common Market 2.0 would enhance our national sovereignty 9
UK payments would reduce significantly 11
A negotiated Customs arrangement would mean the Irish backstop 11
would not need to be activated
Leading Brexit campaigners supported an EFTA-based Brexit 11
ahead of the referendum campaign
A prosperous future for the UK 13
Trade 13
Security 13
Workers’ rights 13
Citizenship rights 14
Standards and regulations 14
Participating in EU agencies 14
Environment 15
Industry and procurement 15
Digital 15
Conclusion 16Substantively, we also believe our plan meets
Foreword
the key issues expressed in the referendum
itself and the key stumbling blocks that have
The UK is a great country with a long and proud
emerged since, as well as getting us as close as
history. Yet one thing most will probably agree
possible to “the exact same benefits” offered
on is that we aren’t exactly covering ourselves
during the referendum.
in glory right now. In fact, much of the public
feel quite alarmed at the seeming mess we
Our proposal takes as its starting point the
have got ourselves into with Brexit. Many are
common refrain that we heard from voters
fed up to the back teeth of hearing about all
in our constituencies during the referendum
the endless Groundhog Day twists and turns.
campaign: “We voted for a Common Market,
The only way out of this mess is to take a new
not all this political stuff.” In the 1970s and
approach. Politicians of all parties need to work
1980s, the British people broadly supported
together to deliver a sensible Brexit deal.
our membership of the European Economic
Community (EEC) because it delivered clear
As it stands, all of the current options have
economic benefits to British businesses and
been firmly ruled out. May’s deal has been
workers. It was only as the “ever closer political
consistently rejected, Parliament has firmly
union” took hold, that people began to turn
ruled out No Deal and there aren’t the numbers
against it. Common Market 2.0 offers us a way
for a Second Referendum. Increasingly, MPs
to recreate that simple economic relationship,
from all parties are reaching the conclusion
which is free of all the political paraphernalia of
that we need to put aside tribal, political
the modern EU.
differences and accept that every option carries
risks and no one outcome is anyone’s ideal.
As members of Common Market 2.0, the UK
would still have to accept the free movement
We are coming together to argue for a Brexit
of workers from other European countries,
deal that delivers the result of the 2016
but we would have new powers to impose
referendum and protects the economic
unilateral restrictions on European migration in
interests of people right across the UK.
exceptional circumstances if our government
Our plan is based on the idea that after the
deems it necessary. This is because the European
transition, in December 2020, the UK should
Economic Area (EEA) agreement gives members
join a new Common Market for the 21st
the right to suspend freedom of movement
century. Let’s call it Common Market 2.0.
if it can show that it is suffering from “serious
economic, societal or environmental difficulties”.
Politically, the Common Market 2.0 would:
In addition, we believe the government should
• Offer Theresa May a last chance of a deal enforce more strictly existing requirements for
that can command a cross-party majority European migrants to find work within three
and win the support of business leaders months or otherwise demonstrate that they can
and trade unions. support themselves without claiming benefits.
• Meet Labour’s five key demands for a Successive governments have failed to enforce
Brexit deal through membership of the these rules properly and have let down the
Single Market and an EU-UK customs communities we represent.
arrangement.
• According to the EU’s chief negotiator
Michel Barnier, offer genuinely frictionless
trade with the EU as it is based on a set of
institutions and procedures that already
exist.
1In Common Market 2.0, most EU rules would 4. Take back control of budgetary
not apply to us at all as we would be outside contributions from the EU to allow
the common agriculture, fisheries, justice, more money for public services as our
home affairs, foreign and defence policies. UK contributions to the Common Market 2.0
representatives would sit on the policy-shaping would be significantly lower than to the
committees that draw up proposals for new EU.
Single Market legislation and we would be able
5. Take the UK out of ever closer union
to resist pressure to implement new rules that
which would remove jurisdiction of the
we don’t like. EU law would no longer have either
ECJ and take us out of the common
“direct effect” or “direct applicability” in the UK.
fisheries, agricultural, justice, home,
We would leave the jurisdiction of the European
foreign and defence policies.
Court of Justice (ECJ) and join the European Free
Trade Association (EFTA) court. UK courts would 6. Eliminate the need for the Irish backstop
once again be supreme. Parliament would be to be activated because we would move
sovereign. seamlessly from the transition into
Common Market 2.0.
Although we would still need to make a financial
contribution for access to the Common Market This pamphlet sets out the significant
2.0, the annual amount would equate to not benefits of Common Market 2.0 for the UK
much more than half the amount we currently when it leaves the EU. We believe this offers
pay. a genuine opportunity to not only command
a majority in Parliament but to bring together
Finally, as members of both the Single Market the country around the UK leaving the EU by
and a new comprehensive customs arrangement creating a new, powerful partnership for the
that initially will involve applying the existing long-term.
common external tariff, there would be no
reason for the Irish backstop ever to be activated. Delivering Brexit in a way that protects
The union of Great Britain and Northern Ireland, the economic interests of the people
which is precious to all of us, would remain we represent will require all of us to
intact and the foundations of peace in Northern compromise. We believe that leaving the
Ireland as set out in the Good Friday Agreement EU and joining Common Market 2.0 is a
preserved in perpetuity. compromise that MPs of all parties, and all
shades of opinion, should be able to support.
In summary, the Common Market 2.0 would:
1. Safeguard jobs by offering real
frictionless trade through full access
to the Single Market and a new
comprehensive customs arrangement.
2. Guarantee workers’ rights and
protections for the long-term as part of
Common Market membership.
3. Provide new controls over Free
Movement in exceptional circumstances.
21. Leading the way in a 21st century Common Market
Respecting the referendum result without wrecking the economy:
why we need Common Market 2.0
In 1973 the UK joined the EEC – otherwise The 52% to 48% margin of victory represents
known as the Common Market – a decision that a clear instruction to leave the EU but not a
was subsequently supported by a public vote mandate for a hard Brexit, let alone for leaving
in 1975. Yet in 2016, 17.4 million people voted without a deal.
to leave the EEC’s successor – the EU. So, what
changed between 1975 and 2016? The democratic will of the 52% must not
be ignored, and the EU referendum should
The answer is clear: the British people’s therefore be seen as a reset moment for
support for the UK’s relationship with the EU the UK’s relationship with our European
eroded, post-Maastricht. The EEC’s Common neighbours.
Market was popular among the British public,
but the project of political integration advanced A newly formed UK-EU Common Market for the
by the Maastricht Treaty in 1992 caused our 21st century would reflect the strong economic
paths to diverge. Between 1992 and 1995, UK ties between the UK and Europe that enjoyed
public support for strengthening our country’s broad democratic support throughout the
relationship with Europe dropped from 38% 1970s and 1980s, respecting the public desire
to 14% and never recovered. Support to leave for striking the right balance between political
the EU or weaken the relationship rocketed sovereignty and economic integration. It would
to over 50%. The events that followed – Tony recast our country’s relationship with the EU
Blair’s 2004 decision that the UK should accept in a way that would better reflect our history,
free movement of people from the so-called geography and politics.
accession eight (Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Poland, Slovakia, The cross-party group of MP’s supporting a
Slovenia) without a transition period, then later ‘Norway-style’ Brexit is therefore advocating
the Eurozone and refugee crises – only served that the UK leaves the EU and its political
to heighten concern about the UK’s place in the institutions in order to develop ‘Common
European project.1 Market 2.0’ – a Brexit that respects the
referendum result, protects the jobs and
The 2016 referendum was a call for the UK livelihoods of our constituents, and begins to
to leave the EU and its project of ever-deeper reunite our deeply divided country.
political integration. But the 52%/48% result
is also a call to maintain a strong, close and
productive economic relationship with those
500 million consumers on our doorstep. In
short, the referendum result is an instruction
to move house while remaining in the same
neighbourhood.
1
Matthew Goodwin, Brexit Britain: The Causes and Consequences of the Leave Vote, http://www.matthewjgoodwin.org/uploads/6/4/0/2/64026337/leave_vote_lecture.pdf
3This form of Brexit would give the UK full
The path to Common
membership of the Single Market, which the
Market 2.0 UK helped create, and which underpins so
many British businesses’ trading success. But
To deliver Brexit based on Common Market 2.0 we would leave the EU’s political institutions,
the UK will renegotiate the Political Declaration the jurisdiction of the ECJ, the common
to specify a future relationship with the EU agricultural and fisheries policies and the EU’s
based on ongoing membership of the EEA drive towards “ever closer union”. We would
through the EFTA pillar. Therefore, during the also increase our power to control freedom of
transition that ends in December 2020, the movement.
UK will need to negotiate its succession to
EFTA with a derogation to allow an exemption On its accession to EFTA, the UK would move
from EFTA’s free trade agreements. At the into the EFTA pillar of the EEA, sitting alongside
same time the UK will negotiate its entry into a the ‘EEA3’ of Norway, Iceland and Liechtenstein.
comprehensive customs arrangement, with the The ‘EEA3’ plus Switzerland make up EFTA.
EU, including the common external tariff unless EFTA is an intergovernmental organisation that
and until alternative arrangements to secure promotes free trade and economic integration
frictionless trade and avoid a hard border in without political or monetary union. It was
Ireland can be agreed. The Common Market founded in 1960. The UK was a founding
2.0 Group, just as Theresa May said in her member until it joined the EEC in 1973.
Lancaster House speech, ‘hold no preconceived
position’ on how this can be achieved. The EEA Single Market is the extension of
the EU’s Internal Market to cover the EEA3
(Switzerland has its own bilateral deal with the
EU). Each EEA3 member pays into the EU but
only for the institutions and services that the
country accesses.
EEA
EFTA EU
Iceland
Switzerland Liechtenstein EU member states
Norway
4A leading role in Europe, The EU and EFTA countries
outside the EU support our proposals
Brexit is not just a reset moment for the UK, The EU has consistently made clear that a
but also for Europe. By leaving the EU and Norway-style relationship, combined with a
joining the EEA via the EFTA pillar the UK would comprehensive customs arrangement that
kick-start the re-imagining of the European delivers frictionless trade and no hard border
project that is so urgently and desperately in Ireland, is one of three options for the UK-EU
required. future relationship that they would support.
The governments of Norway and Iceland have
European leaders recognise the limitations of also been positive about the UK joining EFTA.
the EU’s one-size-fits-all, top-down approach
to integration. President Macron in particular The EU
has spoken openly in support of a “Europe of The EU’s chief negotiator Michel Barnier has
several circles” that better reflects the different been clear that there are three models for the
histories, cultures and political temperaments UK-EU future relationship: a Canada-style free
of its component parts.2 trade agreement (which would inflict significant
harm on our economy because it wouldn’t
The UK would have a central role to include most services, and which would put
play in leading a group of like-minded our union at risk because it would exclude
European countries that sit outside the Northern Ireland), World Trade Organisation
political institutions of the EU but enjoy full rules (which would impose substantial tariff
participation in the Single Market. Membership and non-tariff barriers to trade), or our
of this outer ring of EFTA countries would Common Market 2.0 model.
bring significant benefits to the UK, as outlined
throughout this pamphlet. In May 2018, Michel Barnier said:
UK membership would also bring substantial “The only frictionless model for the future with the
benefits to EFTA, increasing its size ten-fold UK would be Norway plus, Norway being part of
to over 70 million people. EFTA’s institutions the Single Market plus a customs union.” 3
would be strengthened as would EFTA’s
influence in deliberations with the EU. From the outset Barnier made it clear that a
Norway-style relationship would have been
Leading and strengthening an outer ring of welcomed by the EU side and that it had not
EFTA countries would mean an exciting new been explored because of the red lines that
future for the UK, EFTA and the EU. Theresa May put down.4
Michel Barnier has also made clear that
the EU was ready to renegotiate the Future
Relationship.
2
FT, 04 September 2018 https://www.ft.com/content/b9bc8caa-b026-11e8-99ca-68cf89602132
3
Express, 22 May 2018, https://www.express.co.uk/news/uk/963597/Brexit-news-Michel-Barnier-Northern-Ireland-border-Norway-plus-solution-EU-UK
4
Reuters, 19 December 2017, https://uk.reuters.com/article/uk-britain-eu-options/stairway-to-brexit-barnier-maps-out-uks-canadian-path-idUKKBN1ED23R
5In January 2019 he said:
“If the United Kingdom chooses to change its red
lines, and to be more ambitious and go beyond a
simple free trade deal in our future relationship,
then the EU would be ready to immediately
support this evolution and respond favourably.”
EFTA countries
The Norwegian Prime Minister Erna Solberg
has made it clear that Norway will welcome us
into EFTA. She has said that Norway will help
the UK “find solutions” if we want to join (28
November 2018).
“If that is what they really want, we will find
solutions in the future.”
“To find a good agreement is important for all
European countries and I hope that we will see an
orderly deal that doesn’t disrupt economic affairs
in Europe.” 5
The only notable Norwegian politicians to claim
that Norway would reject our membership are
campaigners for Norway to leave EFTA and join
the EU.
The Icelandic Foreign Minister Guðlaugur Þór
Þórðarson told BBC’s Newsnight:
“We would be very positive towards the idea of the
UK joining EFTA or the EEA.” 6
5
MSN (28 November 2018) https://www.msn.com/nb-no/nyheter/verden/solberg-sier-britene-er-velkomne-i-efta/ar-BBQcDyS
6
Newsnight ( 27 November 2018) https://twitter.com/bbcnewsnight/status/1067551073269772288?lang=en
62. Common Market 2.0: more control with continued
economic access
As this table shows, by leaving the EU and joining the EEA via the EFTA
pillar, the UK would remove itself from a significant number of EU
commitments and increase national sovereignty across a range of areas.
UK as EU Member UK in CM2.0
Single Market Access Yes Yes
Financial services access Yes Yes
Tariff free trade with EU27 Yes Yes
Freedom of movement Yes Yes
Immigration Controls No EEA ‘Safeguard Clause’
EU financial contributions Yes ~50% per head
Voice on global standards bodies No Yes
EU Rules Yes Only 28% apply
Right to resist new rules No Yes
CAP and CFP Yes Exempt
Common Foreign & Defence Policy Yes Exempt
Justice & Home Affairs Policy Yes, with opt-outs Exempt
European Court of Justice Yes Exempt
No, unless we choose to
Charter of Fundamental Rights Yes
participate
EU Science/Education Programs, e.g No,unless we choose to
Yes
Galileo participate
7Article 112
Common Market 2.0 offers
1. If serious economic, societal or
new powers to control environmental difficulties of a sectorial or
immigration regional nature liable to persist are arising,
a Contracting Party may unilaterally take
Under Common Market 2.0 we would appropriate measures under the conditions
participate fully in the Single Market, which and procedures laid down in Article 113.
entails freedom of movement. We would
2. Such safeguard measures shall be restricted
however be in an improved position in two
with regard to their scope and duration
significant respects (in large parts delivering
to what is strictly necessary in order to
what David Cameron attempted but failed to
remedy the situation. Priority shall be given
secure in his renegotiation with the EU in 2016).
to such measures as will least disturb the
functioning of this Agreement.
Under Common Market 2.0, the UK:
3. The safeguard measures shall apply with
• Would have a qualified but unilateral right regard to all Contracting Parties.
to suspend freedom of movement
• Would be able to apply existing rules more In the event that the UK used the safeguard
effectively than at present clause, Article 113 of the EEA Agreement
provides for a dialogue between the UK and
We would have the power under Article 112 the other EEA countries, in order to establish a
of the EEA Agreement to take ‘safeguarding long-term solution to the underlying problem.
measures’. This allows an EEA/EFTA state to The invoking party must call a conference and
take ‘appropriate measures’ in the event of seek to resolve the underlying issues which
‘serious economic, societal or environmental led to the measure. This is done via the offices
difficulties of a sectoral or regional nature of the EEA Joint Committee. If the negotiation
liable to persist’. This would mean that if EEA breaks down, Article 114 permits the other EEA
immigration reached extraordinary levels, we states to take proportionate counter-measures
would have the power to impose restrictions. but only those “strictly necessary to remedy the
imbalance.”
This safeguard clause could be applied on
a regional basis. For example, if difficulties Article 113
arose of a regional nature it would be possible 1. A Contracting Party which is considering
to restrict free movement in a region while taking safeguard measures under Article
maintaining it in other less affected areas. This 112 shall, without delay, notify the other
could mean that if Scotland wanted to continue Contracting Parties through the EEA Joint
free movement on current terms it would be Committee and shall provide all relevant
able to do so while other parts of the UK facing information.
particularly high levels of immigration could 2. The Contracting Parties shall immediately
implement safeguard measures. enter into consultations in the EEA Joint
Committee with a view to finding a
commonly acceptable solution.
83. The Contracting Party concerned may It is important to note that such a safeguard
not take safeguard measures until one power would only be available in extraordinary
month has elapsed after the date of circumstances. But this is precisely the power
notification under paragraph 1, unless the that David Cameron tried to secure during
consultation procedure under paragraph 2 his renegotiation with the EU and which was
has been concluded before the expiration resisted by the EU at the time. This implies that
of the stated time limit. When exceptional in the eyes of the EU this power could have a
circumstances requiring immediate action serious and substantial effect.
exclude prior examination, the Contracting
Party concerned may apply forthwith the As members of Common Market 2.0 we could
protective measures strictly necessary to improve the enforcement of existing rules in
remedy the situation. relation to Freedom of Movement. After three
months, EEA migrants need to be in work or
4. For the Community, the safeguard
be able to demonstrate they have a job. If they
measures shall be taken by the EC
cannot, their right to reside may be revoked.
Commission.
Some EU countries, including Belgium, Spain
5. The Contracting Party concerned shall, and Germany, already enforce these rules
without delay, notify the measures taken to better than the UK does.
the EEA Joint Committee and shall provide
all relevant information. The combination of Article 112 and stricter
6. The safeguard measures taken shall be enforcement of the current rules would put
the subject of consultations in the EEA the UK in a significantly better position to deal
Joint Committee every three months from with large rises in immigration. If large, new
the date of their adoption with a view to countries were to join the EU and extraordinary
their abolition before the date of expiry levels of immigration were to occur we would
envisaged, or to the limitation of their scope be able to implement the safeguard measure
of application. to ensure that migration did not reach the
levels experienced during the mid 2000s.
7. Each Contracting Party may at any time
request the EEA Joint Committee to review
such measures. Common Market 2.0 would
enhance our national
Article 114 sovereignty
1. If a safeguard measure taken by a
Contracting Party creates an imbalance Under Common Market 2.0, the UK would
between the rights and obligations under have:
this Agreement, any other Contracting Party
may towards that Contracting Party take • A voice in the consultation process of any
such proportionate rebalancing measures proposed new EEA laws
as are strictly necessary to remedy the • A vote on the EEA Joint Committee where
imbalance. Priority shall be given to unanimity is required
such measures as will least disturb the • A domestic right of refusal to implement
functioning of the EEA. new EEA law into its own domestic law
2. The procedure under Article 113 shall apply.
9Common Market 2.0 would restore policy- various institutions. Furthermore, the UK would
making power in a wide variety of areas, regain its seat at global bodies such as the
end direct effect and direct applicability of WTO. This means we will actively be able to
European Law, ensure British influence in the shape global standards that are the basis for
shaping of Single Market regulations and end many EU and EEA laws.
the jurisdiction of the ECJ. The UK would have a
voice, vote and right of refusal over proposed A genuine vote
new EEA law. If an EEA/EFTA state is not satisfied with a
proposed Single Market law they can contest
ECJ Jurisdiction ends the relevance of new EEA law to the functioning
Under Common Market 2.0 we would leave of the Single Market and seek to secure
the oversight of the ECJ and come under the changes, adaptations or derogations. This
jurisdiction of the EFTA court. The EFTA court is occurs through the EEA Joint Committee where
a separate and independent court covering a representatives from the EU and EEA3 meet
separate and independent jurisdiction. Except ‘to decide on’ whether to ratify the proposed
for decisions pre-dating the EEA Agreement in new EEA law. New EEA law is only incorporated
1994, the EFTA court is not obliged to follow into the EEA Agreement with the unanimous
the decisions of the ECJ. This is similar to how agreement of the EU and the EEA/EFTA states
English courts are not obliged to follow the (unlike in the EU Council where voting is on
decisions of the Scottish courts. the basis of a qualified majority) which means
that the UK would have genuine influence over
Although highly authoritative, EFTA rulings are new EEA law. This process yields results. For
not legally binding on the EEA/EFTA states and example, Norway obtained derogations from
cannot be imposed. The UK could expect to 55 legal acts and Iceland from 349 acts, up until
negotiate as least one of the four judges on the June 2011 alone.
EFTA court in contrast to one-in-28 on the ECJ.
1. The ‘Third Energy Package’– EU legislative
Voice, Vote and a right of refusal package entered EU law in 2009
• Norway only put it into domestic law in
Outside the EU and under Common Market 2.0 March 2018.
we would restore policy-making power in vast • Iceland are yet to do so.
areas including agriculture, fisheries, foreign
2. The ‘Third Postal Service’ – EU Directive
and security affairs, justice and home affairs
•N
orway refused to implement this
and taxation. This would mean for example
into domestic law in 2011. Eventually
that we would leave the Common Fisheries and
implemented in 2013.
Agricultural Policies.
3. The ‘Hygiene Package’– EU legislative
A genuine voice package
We will have considerable influence over the • Norway only implemented this five years
initial shape of new EEA legislative proposals after it became EU law.
because the EU is obliged to consult all EEA/
EFTA states on any new legislation. EEA/ A genuine right of refusal
EFTA state experts participate in the EU We would no longer be committed to ‘ever
Commission’s preparatory work and have closer union’ and the imposition of EU law
representatives on policy-shaping committees into UK law through ‘direct effect’, and ‘direct
as well as having observer status in the EU’s applicability’ would end. Indeed, because of
10this, the UK Parliament would actually be about this EEA Grants Scheme – other than it
required to incorporate EEA law into British being a voluntary ‘goodwill’ scheme – is that it
law meaning genuine democratic oversight is calculated on the basis of the Norway’s per
of the proposed new EEA law is achieved by capita GDP. If the UK decided to follow a similar
the EFTA states’ own Parliaments. Crucially scheme, Norway’s per capita GDP is about
these new EEA laws will only take effect if they $76,000 per year whereas the UK’s current GDP
are incorporated into UK law by Parliament is $39,000 per capita, meaning the UK would
precisely because the ability of the EU to pay close to half of what Norway pays.
impose law on the UK ends at Brexit and
the EEA Agreement ‘ringfences’ the national A negotiated customs
sovereignty of non-EU signatory states. This
means the EFTA states maintain (and have
arrangement would mean the
used) a domestic right of refusal. For example, Irish backstop would not need
Norway took five years to implement the EU to be activated
‘Hygiene Package’ of regulations and nine
years to implement the ‘Third Energy Package’. The biggest concern for many Conservative
Iceland is yet to do so. In 2011 Norway refused MPs regarding the Government’s Withdrawal
to implement the ‘Third Postal Service’. This is
Agreement is the Irish protocol and specifically
an extreme measure and rarely used because
the backstop, due to the fact that the UK
the purpose of the EEA legislative process
is to achieve legislation by consent and not cannot exit the arrangement – should it be
imposition and generally speaking it does so. required – unilaterally.
But it also means the UK would gain a ‘right of
reservation’ over any new EEA laws it currently Under Common Market 2.0 the UK would be in
lacks as a member state of the EU. Under the Single Market and therefore all regulations
Article 102 of the EEA Agreement, the EU may
would apply to the UK in the same way as they
take reasonable countermeasures including
apply to the Republic of Ireland with customs
suspending that particular part of the EEA, but
an EFTA country can still refuse to implement a arrangements, at least initially, applying as
piece of EEA law because its sovereign right to they do currently. Therefore there would be no
do so is ‘ringfenced’ by the EEA Agreement. reason for the backstop to be activated.
UK payments would reduce Leading Brexit campaigners
significantly supported an EFTA-based
Brexit ahead of the referendum
Norway pays £140 per capita per annum vs.
campaign
the UK’s current £220 (post-rebate). Norway
makes annual contributions of €450m to
Support for Common Market 2.0, under its
cover the cost of Norwegian participation in
various banners, has come from across the
joint programmes, schemes and agencies,
House of Commons and across the Brexit
and pays a €50m membership fee to EFTA.
divide. Conservatives and Labour politicians are
But it also makes €390m in voluntary grants
working together in the Common Market 2.0
via EEA Grants Scheme. What is most notable
Group, and 76 Labour backbenchers defied the
11whip in June 2018 to back an EEA-based Brexit
in what was the largest rebellion in the history
of the Parliamentary Labour Party.
And a number of prominent Leave
campaigners – including Daniel Hannan,
Nigel Farage and Owen Paterson MP – all
consistently advocated staying in the Single
Market during the campaign.7
Daniel Hannan MEP said:
“Norway and Switzerland, all of these countries
have completely free trade with the EU, and by the
way, I can’t help noticing they’re doing pretty well.”
“Absolutely nobody is threatening our place in the
Single Market.”
Nigel Farage MEP said:
“I hear people say “Wouldn’t it be terrible if we
were like Norway and Switzerland? Really? They
are rich, they’re happy and they’re self-governing
countries.”
“Norway, Iceland and Switzerland do pretty well.”
“Norway has no ties in terms of their foreign
policy, with their fishing industry... They are opted
out and exempted from all of the things that make
the British mad.”
Owen Paterson MP said:
“Only a madman would actually leave the
market.”
7
People’s Vote (Youtube: 17 Nov 2016) https://www.youtube.com/watch?v=0xGt3QmRSZY
123. A prosperous future for the UK
Trade highly successful financial services industry
relies on its financial passports which ensures
Common Market 2.0 would secure the that they can operate across Europe from the
prosperity of the UK through continued UK. The current Political Declaration would
membership of the Single Market and a new not maintain current trading terms in services
comprehensive customs arrangement with as it involves leaving the Single Market, which
the EU. This option is the only one that can would risk businesses moving to other parts of
maintain frictionless trade with our largest Europe.
trading partner. Any other option, at least until
technological solutions can be found, involves Security
an increase in trade barriers and would likely
harm our economy, putting jobs at risk. Common Market 2.0 will give the police the
tools they need to fight crime and protect our
Continued membership of the Single Market people. By re-joining EFTA we will be able to
ensures tariff-free access to the EU and the negotiate continued access to crucial databases
other EEA/EFTA states. The government’s such as the Schengen Information System (SIS)
proposal by comparison only includes an that the police used 539 million times in 2017.
aspiration for tariff-free access. This option We will also be able to negotiate access to
would guarantee it as a treaty right under the the exchange of fingerprints and DNA which
EEA Agreement. Membership of the Single are used to help catch suspects and potential
Market would, along with a comprehensive terrorists. No country outside EFTA or the EU
customs arrangement, ensure that there are no have access to these arrangements.
additional border checks. This is vital given the
volume of UK trade with the EU. For example, Workers’ rights
2.6 million freight trucks passed through Dover
in 2016. Any additional paperwork such as Common Market 2.0 ensures that we not
Rules of Origin Declarations will be costly for only maintain current workers’ rights and
firms and any additional checks could lead to protections but that we keep pace with future
disruptive and costly delays. Additional costs rights and protections. A No Deal Brexit
could put jobs at risk. and the current Withdrawal Agreement put
British workers’ rights at serious risk. The
It is essential we maintain full participation commitments within the Prime Minister’s
in the Single Market in order to protect our Withdrawal Agreement to protect employment
service industries, which make up about 80% of law are unenforceable and weak, and are
the UK economy. Common Market 2.0 delivers excluded from the legal measures that bind the
on this. Any additional barriers will raise costs rest of the agreement.8 Those arguing for a No
and put jobs at risk. For example, the UK’s Deal Brexit have spoken openly of the desire
8
The Guardian, 26 November 2018 https://www.theguardian.com/commentisfree/2018/nov/26/theresa-may-brexit-deal-rights-at-work-eu-protections.
13to see wholesale deregulation, which would Standards and regulations
include watering down labour standards.
Common Market 2.0 is the only plan that
Common Market 2.0 leaves us open to can ensure frictionless access to European
maintaining the current rights and protections markets, maintaining the standards that British
we enjoy, as per the high EU labour standards consumers expect. It will keep identical or
currently in place. It is these rights, such as equivalent regulations meaning no additional
the working time directive, rights on annual costs to business and no additional paperwork.
leave, equal pay, maternity and parental leave, This is vital for the around 2.6 million freight
anti-discrimination and even health and safety trucks passing through Dover each year.
laws, that British workers rely on to live a good
quality of life. Remaining a member of the Those backing a No Deal Brexit have spoken
EEA would allow for the implementation of EU openly about their desire to remove the UK
employment-related regulations into UK law, from European standards and regulations. This
ensuring British people could still benefit from could mean settling for lower standards on
these protections. goods after Brexit.
Common Market 2.0 allows us to leave the This plan would also mean that the UK would
EU as the British people have directed, but regain its seat at global bodies such as the
maintain essential employment protection WTO. This means we will actively be able to
ordinary working Briton’s rely on. shape global standards that are the basis for
many EU and EEA laws.
Citizenship Rights
Participating in EU agencies
There is no concept of “citizenship” in the EEA
Agreement and the EU Charter of Fundamental The EEA3 States participate in the agencies
Rights does not apply. The EEA Agreement is an below through decisions of the EEA Joint
economic treaty and not political one. However, Committee. In addition, bilateral agreements
Annex V obliges EFTA state contracting parties with the EU ensure the participation of
to respect the Citizenship Directive rights of EU individual EEA3 States in several other EU
citizens, and also to extend equivalent rights to agencies. The EEA3 participate in numerous
their own subjects and other EFTA state citizens agencies and programmes, including
even though they are not themselves citizens REACH (Chemicals), EMA (medicines and
of the EU. While this would not equate to the pharmaceuticals, environment, food safety,
continuation of EU citizenship, which will end at pensions, securities and markets, network and
Brexit, it should be of considerable comfort to information security, railway, maritime and
UK citizens anxious about losing key citizenship aviation safety). The EEA3 also have the option
rights such as free movement, residence and of joining programmes like Erasmus, Horizon
healthcare. 20/20, Copernicus (environment), European
satellite navigation systems (Galileo) and the
Connecting Europe Facility (CEF) dealing with
telecoms and broadband.
14This means the UK would have the option of the one railway line in Lichtenstein). The
remaining in the agencies and programmes Norges Statsbaner AS, the Norwegian State
that we want to. This would include areas that Railway company, the government owned
the Prime Minister’s current deal fails to secure operator of the railways, was established
continued engagement in – Galileo being the in 1996, after Norway entered into the EEA
most obvious example. Agreement (when a larger railway company
was split into separate state-owned operation,
Environment administration and inspectorate bodies).
Current members of the EEA have agreed In the EEA, state aid is monitored by the EFTA
their ‘determination to preserve, protect and Surveillance Authority, meaning determinations
improve the quality of the environment and to are made by EEA members through a separate,
ensure the prudent and rational utilisation of parallel structure to that which monitors state
natural resources on the basis of the principle aid in the EU. The EFTA working group on
of sustainable development’. state aid meets when required to determine
the specifics of how state aid rules will be
In practice, this means all EFTA/EEA states interpreted within the EEA, and is the means by
commit to agreements on water, air, chemicals which discussions on state aid between the EEA
and waste, and the equivalent environmental and the EU are conducted.
protections as EU membership.9
Digital
Industry and procurement
British business, not least our vital services
The EEA states come under the same state aid industries, rely on the free flow of data across
rules as EU members. These state aid rules national borders. Data flows freely within the
prevent governments giving any business an EEA and EU, and both the EEA and EU grant
unfair advantage that would distort trade. ‘adequacy’ agreements with third countries
Such rules do not prevent governments from to allow the international transfer of personal
nationalising already privatised industries or data to countries outside of these areas. As a
prevent the state from setting up government member of the EEA, the UK would be covered
backed alternatives to privatized industries. by the existing data agreements and there
There are no policies in any of the major parties would be no need for a separate agreement,
manifestos from the last election that current meaning frictionless data flows, benefitting
state aid rules would in any way curtail.10 British business.11
As Norway has shown, it is possible under
existing rules of the EEA for the state to play
a greater role in the delivery of services.
Norway has spent more on state aid than the
vast majority of EU countries, and a lot more
than the UK. For example, the Norwegian
government operates its domestic railways
(and the Austrian Federal government operate
9
EFTA, January 2019, http://www.efta.int/eea/policy-areas/flanking-horizontal-policies/environment
10
Andy Tarrant, Fabian Society: https://fabians.org.uk/negotiating-the-red-lines
11
EFTA, January 2019, http://www.efta.int/EEA/Data-Protection-505036
154. Conclusion
Politicians, of all stripes, have expressed support for the adoption of
Common Market 2.0. This is a Norway-style solution that would see us leave
the political institutions as voted for in the referendum while avoiding the
prickly issue of falling into the backstop.
We would avoid the backstop by joining EFTA - an off the shelf arrangement.
As the institutions already exist this future relationship can be negotiated
much more quickly than any other option on the table. Crucially the EU
have already said that they would be happy to negotiate a Common Market
2.0 Brexit deal.
In addition to avoiding the backstop, Common Market 2.0 would allow us to
make trade deals with the rest of the world. Although it is true that initially
we would apply the EU’s common external tariff, a Common Market 2.0 deal
makes an agreement on alternative arrangements much more likely, which
would allow us to make these new trade deals around the world. This is
because membership of the Single Market will eliminate the need for most
checks at the Irish border as our regulations will be identical or equivalent.
Membership of the Single Market is also the best way to protect workers
rights and ensure that high standards are maintained. Common Market 2.0
through membership of the Single Market guarantees that workers rights
and standards are locked in, ensuring that there cannot be a race to the
bottom that would hurt workers up and down the country.
Common Market 2.0 is a well-defined relationship which the EU have
already said that they are prepared to accept. It can both avoid the
backstop and deliver the future relationship by the end of 2020, thereby
delivering on the Brexit referendum to leave the political institutions and
take back control.
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