Brexit will set UK back £11bn in EU trade costs, research finds

EXIT

Britain would be landed with £11bn in new tariffs if it left the EU and did not get a free trade agreement, according to the leader of the group campaigning to stay in.

Lord Rose, who heads Britain Stronger in Europe, published research suggesting that the UK would have to begin trading with the EU using World Trade Organisation rules, which would cost businesses and consumers more.

Speaking as David Cameron heads to Brussels for two days of talks on Britain’s future in the EU, the businessman said that the campaigns arguing that Britain should leave the EU are proposing a specific deal: ending all budget contributions, ending free movement and repatriating economic regulations while retaining full access to the single market.

“The [Leave Europe] campaigns’ proposals are a pipedream. They do not have a credible or achievable alternative which can replicate, let alone improve upon, the benefits the single market brings, and if they were to pursue their terms as currently proposed there would be a real risk of Britain leaving Europe with no trade deal at all,” Rose said.

“The cost of failure to secure a trade deal would be huge: family finances and Britain’s economy would be under threat. Britain would move to trading with the EU according to World Trade Organisation rules.”

The Britain Stronger in Europe campaign said this would be equivalent of £176 for every person and £426 for every household in Britain. The figure is based on UK imports from the EU at a value of £220bn, facing a tariff set at at a level of “most favoured nations”.

The research was designed to back up claims by Sir John Major, the former prime minister, that the UK is on a dangerous course by flirting with leaving the EU while the rest of the world is coming together.

Sir John said: “The whole world is coming together and for the United Kingdom, 67 million out of a world population of seven billion, to break off and head off into splendid isolation doesn’t seem to me to be in our interests now, or perhaps more important, in the interests of our children and our grandchildren.”

He predicted any break up would be acrimonious, adding once outside the EU “we may get a very substandard deal to enter the single market”.

Cameron is not seeking a complete breakthrough at the summit in Brussels but wants an in-principle acceptance that the EU will either pick up his proposals to cut in-work benefits for EU migrants, or set out an alternative that stops the flow of migrants. The prime minister wants to be able to point to a clear political agreement that the issues concerning the UK will be addressed in time for detailed agreement at a further EU summit in February.

The scale of the challenge Cameron will face in Brussels was underlined by the German chancellor, Angela Merkel, who warned that the “core principles” of the EU in relation to free movement and non-discrimination could not be questioned. The chief stumbling block in the negotiations is Cameron’s call for a ban on EU migrants claiming in-work benefits until they have been in the UK for four years.

In an address to the Bundestag, Merkel reiterated that she wanted to reach an agreement that would allow the British government to successfully campaign for a vote to remain in the EU. But she added: “On the other hand, we don’t want to, and we won’t, call into question the core principles of European integration. These include in particular the principle of free movement and the principle of non-discrimination between European citizens.”

Downing Street insisted that Cameron’s existing proposal would remain the starting point for the talks. A spokesman said: “The prime minister has made clear the proposal that is on the table as regards the welfare and migration element of the renegotiation is the four years and we will be discussing that tomorrow in Brussels in the EU council.”

No 10 added: “The prime minister will set out our proposals. If other EU leaders want to come forward with alternative proposals or suggestions, that will form part of that discussion. But let’s wait until that discussion starts to then see what comes out of it.”

The Leave Campaign highlighted the extreme political views of some of the EU leaders, especially in Eastern Europe with which Cameron would be hoping to negotiate. They claimed the Hungarian prime minister Viktor Orbán has called for migrants to attend work camps and the prime minister of Slovakia Robert Fico has asserted that “Slovakia is built for Slovaks, not for minorities.”
Vote Leave spokesman Robert Oxley said:People will be horrified to learn of the extreme views held by some EU politicians who have huge power over decisions that affect our daily lives. Our laws should be decided by the people we vote for, not EU politicians who do not share our values.

Jeremy Corbyn, speaking to a meeting of European Socialists in Europe tomorrow, will put forward his own negotiating agenda for the UK including democratic reform to make EU decision-making accountable to its people; economic reform to put jobs and sustainable growth at the centre of European policy; labour market reform to strengthen workers’ rights in a real social Europe; and new rights for elected authorities across Europe to support public enterprise and halt the pressure to privatise services.

Powered by Guardian.co.ukThis article was written by Patrick Wintour Political editor, for The Guardian on Wednesday 16th December 2015 22.00 Europe/London

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