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September 16, 2016

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The UK's Existing Special Deal with the EU

June 20, 2016

Let us go back in time and assume that the UK had never entered the then Common Market in 1973. Whatever the specifics we would in all likelihood have ended up with some form of agreement with the EU, probably similar in some respects to either Norway or Switzerland.

 

For a change view the referendum this way. We are today effectively being offered full unfettered access to the single market (our largest trading partner) with the following incentives or special conditions.

 

1. Exemption from joining the Eurozone. It is still formally the case that new EU member states join the single currency. The UK therefore retains an independent monetary policy and does not face restrictions on fiscal policy.

 

2. An opt out from the Schengen area, giving the UK additional border controls. This is something that no other EU member state has with the exception of Ireland due to its relationship with the UK. Indeed all EFTA members are also part of the Schengen Zone.

 

3. A rebate on the UK’s EU contributions. This reduces the gross contribution of £18bn by around £5bn. As a result the UK actually pays a lower percentage of Gross National Income than any other EU member state. No other EU state has a similar rebate.

 

4. Limits on the ability of the EU courts to rule on issues relating to the Charter of Fundamental Rights. Only Poland has a similar arrangement.

 

5. An opt out on legislation relating to “freedom, security and justice”. This gives the UK a flexible opt out, allowing it to deal with each piece of EU legislation in this area on a case by case basis. Only Ireland (flexible opt out) and Denmark (full opt out) have a similar provision.

 

6. Finally, the UK government is at the table when policy is decided and UK MEPs are present when EU legislation is debated and voted upon. The UK therefore has a voice and can influence policy. Outside of the EU the likes of Norway and Switzerland not only have to comply with free movement of people but also have to implement the majority of EU legislation relating to the single market. They do not however have any influence on those laws.

 

How special do people want the UK to be treated? Arguably the UK already has a better deal than Norway or Switzerland.

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