Briefing

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WHAT HAPPENS WHEN WE VOTE LEAVE?

A summary

  • We end the supremacy of EU law and the European Court. We will be able to kick out those who make our laws.

  • Europe yes, EU no. We have a new UK-EU Treaty based on free trade and friendly cooperation. There is a European free trade zone from Iceland to the Russian border and we will be part of it. We will take back the power to negotiate our own trade deals.

  • We spend our money on our priorities. Instead of sending £350 million per week to Brussels, we will spend it on our priorities like the NHS and schools.

  • We take back control of migration policy, including the 1951 UN Convention on refugees, so we have a fairer and more humane policy, and we decide who comes into our country, on what terms, and who is removed.

  • We will regain our seat on international bodies where Brussels represents us, and use our greater international influence to push for greater international cooperation.

  • We will build a new European institutional architecture that enables all countries, whether in or out of the EU or euro, to trade freely and cooperate in a friendly way.

  • We will negotiate a new UK-EU Treaty and end the legal supremacy of EU law and the European Court before the 2020 election.

  • We do not necessarily have to use Article 50 - we may agree with the EU another path that is in both our interests.

THE BIG PROBLEMS WITH THE EU

The EU is undermining democracy, prosperity, and international cooperation. It is plagued by high unemployment, high debts, an ageing population, a dysfunctional euro and political institutions, a migrant crisis, and a democratic crisis. It is hostile to the combination of world-class universities, technological innovation, and venture capital that is fundamental to technological innovation. Even the EU’s own supporters realise it is ‘nearly comatose’ as the EU Commission’s President said recently.


SEVEN PRINCIPLES FOR A NEW UK-EU RELATIONSHIP

I

First, not in chronological order, we will repeal section 2 of the European Communities Act 1972. This is Parliament’s instruction to our courts to treat EU law as supreme. We will repeal it and restore democratic government. Daily in government departments, ministers are told ‘you can’t do that because we will be judicially reviewed under European law’, on a vast range of subjects from building hospitals and aircraft carriers to which terrorists we can deport. This causes administrative and management chaos and adds billions to costs. A ‘leave’ vote is a necessary, though not sufficient, foundation for restoring competent and democratic government.

II

Second, we will retake control of our trade policy. We will leave the Common Commercial Policy that gives the Commission control of all UK trade agreements. After we retake control, we will negotiate new agreements with countries like India, which represent the future of global growth, much faster than the EU slowcoach wants to or is able to.

III

Third, we will have a new UK-EU trading relationship. There is a European free trade zone from Iceland to the Russian border and we will be part of it. The heart of what we all want is the continuation of tariff-free trade with minimal bureaucracy. Countries as far away as Australia have Mutual Recognition agreements with the EU that deal with complex customs (and other ‘non-tariff barrier’) issues. We will do the same.

What about the so-called ‘Single Market’? The ‘Single Market’ is almost universally misunderstood and is nowhere defined in the EU Treaties. It was created in the 1980s by Jacques Delors in order to impose qualified majority voting in a vast range of areas beyond international trade such as the free movement of people, how we build schools or aircraft carriers, and thousands of things like the energy requirements of hoovers and the maximum size of containers in which two people sell olive oil to each other in the Shetland Islands (five litres). The Foreign Office and CBI like to claim that the Single Market was about ‘free trade’ but this is historical nonsense. Delors’ goal was explicitly political - as he said, 'we’re not here just to make a Single Market, that doesn’t interest me, but to make a political union.'

The Single Market causes big problems. For example, the Clinical Trials Directive has hampered the testing of vital cancer drugs for years causing unnecessary deaths. Single Market rules add complexity, time, and billions to government procurement programmes. Economists have tried and failed for twenty years to identify clear general gains from the Single Market. Even the Commission’s own, obviously optimistic, figures show that the supposed gains for the UK are smaller than reasonable estimates of the regulatory costs. Most businesses have said for over a decade that the Single Market does more harm than good but this debate has been distorted by a small number of large multinationals that lobby Brussels to use regulations to crush entrepreneurial competition. Big businesses are often the enemy of the public interest.

These problems will grow. The next EU Treaty is intended to harmonise another vast range of things including areas such as company law and ‘property rights’. Harmonising regulations is often good for countries like Greece but is often disastrous for Britain which wins more of the world’s investment in Europe than any other European country precisely because much of our legal system is not yet harmonised with Europe.

The EU’s supporters say ‘we must have access to the Single Market’. Britain will have access to the Single Market after we vote leave. British businesses that want to sell to the EU will obey EU rules just as American, Swiss, or Chinese businesses do. Only about one in twenty British businesses export to the EU but every business is subject to every EU law. There is no need for Britain to impose all EU rules on all UK businesses as we do now, any more than Australia or Canada or India imposes all EU rules on their businesses. British businesses that wish to follow Single Market rules should be able to without creating obligations on everybody else to follow them. The vast majority of British businesses that do not sell to the EU will benefit from the much greater flexibility we will have.

The idea that our trade will suffer because we stop imposing terrible rules such as the Clinical Trial Directive is silly. The idea that ‘access to the Single Market’ is a binary condition and one must accept all Single Market rules is already nonsense - the Schengen system is ‘Single Market’ and we are not part of that. After we vote to leave, we will expand the number of damaging Single Market rules that we no longer impose and we will behave like the vast majority of countries around the world, trading with the EU but, crucially, without accepting the supremacy of EU law.

Regulatory diversity is good in many ways. One of the great advantages of post-Renaissance Europe over China was regulatory diversity. This meant Europe experimented and reinforced success (which often meant copying Britain) while China stagnated. Hamilton’s competitive federalism between the different states in America brought similar gains. Now the EU’s 1950s bureaucratic centralism, reinforced by the Charter of Fundamental Rights that gives the European Court greater power over EU members than the Supreme Court has over US states, increasingly mimics 16th century China in preventing experiments and crushing diversity.

IV

Fourth, we will increase our international influence. We have never managed to exert much influence on the EU project. As the UK negotiator for our entry to the EEC put it, the Foreign Office strategy from the outset was to ‘swallow the lot and swallow it now’. This situation recently got even worse. The Lisbon Treaty created a structural Eurozone majority in the EU Council of Ministers such that Britain is routinely outvoted and has no veto on vital issues. We have even surrendered our one meagre surviving true red card, the ability to stop other states going ahead by themselves with things that will damage us. Every time a British Prime Minister has tried to oppose something they have failed. Even this dismal new deal has demanded the calling in of favours and handing out millions of pounds to other EU members via the European Commission.

This bureaucracy over which we have so little influence now supplants Britain in many global bodies. Many supposed ‘EU rules’ now actually transpose rules agreed in these global bodies where Britain has given away its representation to the EU. Our new deal will therefore also include Britain retaking our seats on all these bodies, such as the World Trade Organization. If Canada has adopted the same rules as Norway or Luxembourg over car safety glass, and can export windscreens to Britain or Ukraine, it is because the relevant standards have been agreed at a higher level than the EU. A leave vote means the opposite of isolation - it means regaining a voice in global bodies that will be increasingly important as the EU shrinks in importance.

V

Fifth, we will use our freedom from EU law and our strengthened international voice to promote more effective and faster international cooperation often at a global level. European cooperation will continue in fields where it already exists such as air travel, sanitary controls, disease, and counter-terrorism.

We must go much further particularly to deal with rapidly accelerating technological revolutions such as genetic engineering and machine intelligence. The EU is clearly unable to cope and there is widespread recognition of the need for new global economic and security institutions to deal with humanity’s biggest problems. We need institutions that are much faster to adapt to accelerating changes.

VI

Sixth, we will have a sensible regime for the movement of people that allows us to replace the awful immigration policy we have now - a combination of an open door for low skilled labour and convicted criminals from the EU while simultaneously stopping highly skilled people from outside the EU coming to the UK to contribute. We will take back control of our asylum policy from the European Court, including over the vital 1951 UN Convention on refugees. As another billion people are added to the world population and this population becomes more urban and mobile, it is vital for our prosperity and democratic legitimacy that we regain the power to change our immigration policy according to changing circumstances.

VII

Seventh, we will be able to spend our money on our priorities. Instead of sending £350 million per week to Brussels, we will spend it on our priorities like the NHS and education.

WHAT HAPPENS THE DAY AFTER THE VOTE?

The day after nothing changes legally. There is no legal obligation on the British Government to take Britain out of the EU immediately. There will be three stages of creating a new UK-EU deal - informal negotiations, formal negotiations, and implementation including both a new Treaty and domestic legal changes. There is no need to rush. We must take our time and get it right.

WHAT'S THE OVERALL FRAMEWORK WE NEED?

Overall, the negotiations will create a new European institutional architecture that enables all countries, whether in or out of the EU or euro, to trade freely and cooperate in a friendly way. In particular, we will negotiate a UK-EU Treaty that enables us 1) to continue cooperating in many areas just as now (e.g. maritime surveillance), 2) to deepen cooperation in some areas (e.g. scientific collaborations and counter-terrorism), and 3) to continue free trade with minimal bureaucracy. The details will have to await a serious negotiation but there are many agreements between the EU and other countries that already solve these problems so we will be able to take a lot ‘off the shelf’.

THREE PHASES - INFORMAL, FORMAL AND IMPLEMENTATION

I

First, there will be informal negotiations. No rational government would immediately begin any legal process to withdraw so there is no issue of an immediate use of Article 50, the EU’s preferred legal route for a member to leave that imposes a basic two-year timetable. The government will explore how the other EU countries and the Commission want to proceed. We will be helped enormously by the fact that the EU Commission, Berlin, and Paris now have an official roadmap for another Intergovernmental Conference and another Treaty centralising many more powers including over taxes with the EU. They think they need this to save the euro. It provides a clear opportunity for a new deal based on us letting them plough ahead while we take back control.

II

Second, there will be formal negotiations to change the legal situation. After the informal phase the government will know the appropriate mechanism for a new relationship or not. Those who say that Article 50 is the only possible path are mistaken about the history of the EU. It has consistently invented legal mechanisms to solve political problems. For example, the Maastricht Treaty gave a supposedly cast iron ‘guarantee’ of no ‘bail-outs’ for the euro. When the euro crisis hit after 2008, the euro was bailed out with billions. Similarly we might agree a different legal mechanism to Article 50.

III

Third, there will be the implementation of new arrangements. The heart of the problem with our EU membership is section 2 of the European Communities Act 1972 that enshrines the supremacy of EU law. It must be repealed but it does not make sense to do this immediately (though it is possible that it could be amended immediately to ensure that some areas of national security are clearly off-limits for EU law, such as counter-terrorism). Changing this is entirely a matter of UK law and what Parliament decides - this decision cannot be overruled by Brussels. It would be best to do it as part of an overall agreed transition with our European friends who know that if they are intransigent it can be done any time we choose.

We should repeal this fundamental law while simultaneously incorporating all existing EU law into UK law and beginning the process of sorting EU rules into three basic categories: clearly stupid things that are repealed, things that are amended, things that either make sense or are themselves global rules we would accept anyway (or both) and are kept. This will be a properly democratic process involving those directly affected by the rules.

There will also be financial protection for all groups that now get money from Brussels. We are a huge net contributor to the EU budget. In areas such as farming, we will therefore be able simultaneously to a) pay farmers at least as much as they get now, b) get rid of the nightmarish EU payment bureaucracy that bankrupts famers, and c) save money for UK taxpayers. In fields such as science research, we will continue participation in EU schemes, as other non-EU countries do.

TIMING

Given that all the big issues have already been solved over the years between the EU and countries around the world, and there is already a free trade zone stretching from Iceland to the Russian border, the new UK-EU Treaty should be ready within two years. In many areas we will continue existing arrangements at least for a while. Obviously the relationship will change and improve over time but a main goal for the first phase is to avoid unnecessary disruption. All the important elements of a new Treaty should be in place well before the next election.

SAFETY FIRST AND FLEXIBILITY

Our guiding principles should be ‘safety first’ and flexibility. There is no need to rush. It is impossible to know now what might be possible for a UK government that has a popular mandate after a ‘leave’ vote, what events may influence negotiations (such as the collapse of Schengen or another financial crisis), and what allies we may find.

The great advantage of a ‘leave’ vote is it gives Britain wider options. It is the best move regardless of how the EU responds. If they refuse to face reality and accept the need for changes in the European architecture, we will obviously have done the right thing. If it forces them to face reality and accept sensible changes, we will not only have helped Britain but we will also help Europe avoid continued decline.

The Establishment says ‘stay and reform from within’. The Foreign Office has said this for decades. It never happens. The Government’s deal is just the latest failure. If we vote remain, it’ll be like getting locked in the boot of the car - we’ll be taken to an awful place that we know we don’t want to go to but can’t swerve.

The euro was always intended to spark deeper centralisation and ‘political union’ and the next EU Treaty is intended to complete this process soon. On top of all the things Brussels already controls it is also planning to take control of policies on banking, energy, and more. Centralisation in Brussels is not a bug - it’s the main feature.

It is delusional to think that voting to ‘remain’ will give us any leverage to persuade the EU to change radically. Brussels will not, understandably, take our complaints seriously. Whitehall will hand over more power as usual. The European Court will continue taking more power every week, particularly using the Charter of Fundamental Rights. Our money will carry on being squandered. We’ll be paying for the euro’s bailouts. Our ability to shape the international system will continue to shrink.

The only realistic way to influence Europe is to vote leave. Relations will be friendlier after we vote leave. We will stop blocking them. They will stop interfering with our democracy. We will all become better friends and allies and together build a new model for free trade and friendly cooperation.

Since the Suez debacle of 1956, British politics has rested on illusions about the European project. It is time for a new generation to save ourselves by our exertions and Europe by our example.

UPDATE: THE GOVERNMENT'S OMNISHAMBLES RENEGOTIATION

The Government has now announced its final new deal which you can read here. Don't believe the Government's spin - the agreement does not restore control of our borders and will not affect immigration. It brings no powers back to the UK and reaffirms that the European Courts are supreme over UK law. This is a bad deal - one that will continue to undermine our security and democracy. On top of this, David Cameron's trivial concessions could be thrown out by the European Courts the day after the referendum. You can read our full analysis here.