Well, now we know what Brexit means: recession. Theresa May effectively called time on Britain’s membership of the single market in her curtain-raiser to Tory party conference. In making securing control over Britain’s borders and freeing Britain from the judicial overview of the European Court of Justice, she has all but ruled out any arrangement that would include Britain’s continuing membership of the single market.
That wipes out any hope the government has of maintaining a decent standard of access to the single market, and with it, puts the future of Britain’s financial services at risk – or does it?
At the top of Whitehall, there is a growing sense that there might be a way out. They see Britain’s Out vote as having two prongs – the size of Britain’s contribution to the EU budget and control over Britain’s borders. (Or, to put in the language of Vote Leave, the £350m a week that could be spent on the NHS and the horde of Turks that were poised to gain visa-free access to the United Kingdom.) But those prongs have to be reconciled with the objective of making a deal that doesn’t knacker the economy.
How best to reconcile those three? A lot of attention is being paid to the Norway grants, where that country pays large sums to both Brussels and member states. Remember that Brexit represents a 12.5 per cent reduction in the European Union’s budget and you already have a great deal to negotiate with.
Of course, that will inevitably disappoint people who voted Leave expecting a cash bonanza for the Health Service. But it remains the government’s best hope of keeping its promises without tipping Britain into recession.