Now, About ‘Norway’

by Andrew Stuttaford

Exactly a month ago, with the Leave campaign faltering, I wrote that one of the key problems it faced was the absence of a credible economic plan. That has proved to be less (ahem) of an obstacle than I had assumed, but the underlying issue remains the same. Britain needs to structure a realistic, pragmatic route out of the EU. After decades of British entanglement with Brussels, leaving the EU will have to be a process, not one bold break, however much romantics might wish otherwise. Tonight’s result does not change that fact, although explaining that reality to Brexiteers at the moment of victory will not be easy.

The best starting point, in my view, rests on preserving Britain’s membership in the European Economic Area, through membership of EFTA — doing a Norway, to use the shorthand. Over at EU Referendum, Richard North has, as I have mentioned before in this Corner, been making this point for years (his EEA-based “Flexcit” plan remains — for anyone who wants to get into the details — an essential read).

As I also mentioned in that post, The Liberal Case for Leave, by the Adam Smith Institute’s Roland Smith, is also well worth a read:

This is key:

The moment of Brexit is therefore a turning-the-ship event; it is not the final destination. Accept that and much else falls into place. One might add that if “Leave” were to win the referendum, it would be the Conservative government (over half of whom are Remainers) advised by the civil service that will manage the aftermath. It will not be the Leave campaign. The method of exit will therefore be evolution — the art of the possible — not revolution.

What Britain needs now is to negotiate a velvet divorce with Brussels, a divorce that can be sold to (1) its (angry) former partners in the EU (who will also be worried that too gentle a parting will encourage other defectors) and to (2) as much as possible of a bitterly divided British electorate.

To say that this will be difficult is an understatement, but this poll (reported in the Daily Telegraph a week or so ago) is worth noting:

British voters have voiced their overwhelming support for a “Norway-style” arrangement in the event of a decision to leave the European Union that would ensure that the UK could retain its access to the single market. A new poll, commissioned by the Adam Smith Institute think tank has revealed that support for a deal along the lines of the Nordic country’s relationship with the continental bloc outweighs opposition by two-to-one. Norway’s consumers and businesses enjoy access to the single market, but are not obliged to comply with many EU rules, including those on justice, agriculture and fishing. The result is a boon to those who believe the Norway option could be used to reduce the uncertainty that surrounds a choice to withdraw from the EU. Advocates suggest it represents a halfway house that could ease the process of disengaging from more than four decades of European regulation.

The ASI survey of more than 1,750 adults, carried out by YouGov on June 8, showed that 54pc of Britons would support Britain pursuing such a deal for five to 10 years immediately following Brexit were the UK to leave. Just 25pc said that they would oppose such an arrangement. Norway, as one member of the four-strong European Free Trade Association (EFTA), is also a part of the European Economic Area (EEA), commonly referred to as the European single market.

Sam Bowman, executive director of the ASI, said that a deal that kept the UK in the EEA would “take the risk out of leaving the EU, providing the time it would take to come up with a unique British solution” for trade with the economic bloc. Experts at the Treasury, the National Institute of Economic and Social Research (Niesr), and the London School of Economics have all found that remaining a part of the EEA would pose the least severe economic risk to the UK after a decision to split from the EU.

But there’s a catch. Membership of the EEA also involves signing up for “free movement” within it for that bloc’s citizens, and immigration, of course, was a key issue in the Brexit victory.

Back to the Daily Telegraph:

The YouGov poll also showed that 57pc of Britons believe the Government should consider the Norway option in the event of a Brexit vote, even though free movement with the EU would continue. Just 24pc said that such an EFTA arrangement should not be on the table. Mr Bowman said: “Voters recognise that the EEA option is coherent with leaving the EU, with large numbers of Leave supporters saying that they would support this arrangement.” He highlighted the 42pc of Britons who said they would vote for Brexit, and also believed that EFTA membership should be considered, against 45pc of leavers who said it should not.

Now it may be that the mere fact of the Brexit vote will have changed how Leavers feel about that, but they may be reassured by the fact that the EFTA/EEA does allow for an emergency brake on immigration from other EEA countries, an emergency brake that can be unilaterally applied if certain conditions are met.

Food for thought, I reckon.

The Corner

The one and only.