Who stabbed who in the back is a fascinating basis for novels, plays and political biographies, but given the serious issues now at stake it is really a sideshow. Nor does it much matter who is prime minister, as long as he or she leads Britain out of the current impasse to honour the choice made by the British people in the referendum and to realise fully the economic opportunities unleashed by Brexit. 

The single market is the centre of this issue. There are different questions concerning goods and financial services. (For other service activities, the single market effectively doesn’t exist). As far as financial services are concerned, I have written about “passporting rights” before. The demise of these would cause some loss of business to the City but this is likely to be minor. And there is an offsetting advantage – being able to operate our own regulatory regime, thereby escaping from the madcap rules of Brussels.

For goods, the general presumption is that to have access to the single market a country must be a member. Yet most countries in the world do not belong to the single market, but export large amounts to it. If we were in their position, we would encounter two hurdles, plus one possible problem and one non-problem. The first hurdle is that exporters pay the EU’s common external tariff. The average for manufactured goods is about 4pc. This is a pretty small obstacle. Since the referendum, the pound has fallen by 8pc, following an earlier fall of about 6pc. This has already more than wiped out any future tariff burden for most of our exporters.

The second hurdle is paperwork and border checks, which may cause delays and increase costs. Yet the fact that many non-EU countries manage to export so successfully into it suggests that this barrier cannot be very significant.  The possible problem involves deliberate discrimination against UK exports “in revenge” for the UK leaving the EU. Some of this will happen, but it is surely likely to be minor. It would be against the self-interest of both businesses and consumers on the Continent. 

David Fuller's view

Here is a PDF of Roger Bootle’s column.

I have the upmost respect for Roger Bootle, developed over decades, and being able to operate our own regulatory regime makes sense to me.  However, would the loss of “passporting rights” into the EU single market really only cause some minor loss of business for the City?

I would like to believe this but it certainly flies in the face of what the vast majority of international banks and many other firms have been saying, plus Standard & Poor’s quoted in the second article above.  Perhaps it would not matter five or ten years from now, given good governance by the UK and the potential to open up far more international business.  However, it could be a significant blow over at least the next year or two.