Paying for continued Single Market access isn't worth it
Now that we've decided to leave the EU talk is turning to how we maintain access to the Single Market. And we know what's going to happen there: demands will be made that we must contribute to the EU budget in order to gain that Single Market access. We also have a good idea about the amount that we'll be asked for. About the £8 billion of our current nett contribution.
This is not worth it, not worth it in the slightest.
Leave aside that everyone thinks of this the wrong way around, they all think like mercantilists, believe that exports are what make us richer. This is not so of course, it is imports that do. And of course the rules we have over our imports are for us to decide.
Think of this like a mercantilist. The savings that will be made by Single Market membership are the tariffs that will not have to be paid as a result. No, we agree, those tariffs would be paid by EU consumers, not us, but still, think like a mercantilist. So, how much would be saved by Single Market membership?
UK exports to the EU are some £133 billion a year. Average WTO tariff rates, which is what we would be stuck at sans Single Market membership, are around 3%. We would thus save £4 billion. This is less than the £8 billion cost. This is not worth it.
Now relax our conditions a little. The £4 billion is being saved by EU consumers. Or, if you want to consider elasticities of demand and all that, anything up to £4 billion is saved by UK exporters. At a cost of £8 billion to UK taxpayers. This is still not worth it.
We would even go rather further than this. When it is put this way these payments for Single Market access are quite obviously special deals, taxpayer support for, exporters. Something that is illegal under general trade rules and more specifically so under EU ones. So when do we bring the case against the EU Commission for the illegality of their charging access fees to the Single Market? Preferably before anyone in the UK starts to think of paying them perhaps?