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Analysis

5 ways we can make the EU single market even better

by David Hannay | 28.11.2019

The EU’s single market isn’t frozen in time. We can shape it in our interests – if only we stop Brexit. Here are five important opportunities we’ll miss out on if we quit.

Research and innovation

The UK has been at the forefront in developing the EU’s steadily expanding projects and programmes for research and innovation. Our universities and research establishments have regularly been among the top two member states, and have benefitted from the international cooperative networks so established.

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We have been a substantial net beneficiary from the EU budget spending on research and innovation. The EU’s next seven-year budget cycle is set to increase that spending. The government’s aim is to find some way of retaining links with those EU programmes after Brexit. But we would have no role in shaping these, as we do now. And, in all probability, our return from any such involvement would be limited to the amount we contributed. 

Data protection

It is pretty well unthinkable to British business that we should try to operate different data protection rules from the rest of Europe. That too has been the view taken by the government which hastened to sign up last May to the EU’s new regulation (GDPR ). Over time the EU is likely to adapt these rules; but we will have no say over those changes and will have little choice but to follow suit.

Capital markets 

London has been, and is likely to remain, Europe’s biggest market in financial services. But it will lose an EU “passport” giving it the right to offer services seamlessly across the single market. The “equivalence” regime which will take its place will leave the City in a precarious position with respect to rulings by the European Commission. We will also lose any direct role in shaping EU policies, especially the gradually emerging Capital Markets Union.

Services

The single market in services is far from complete. But for British businesses which rely on the freedom of establishment everywhere in Europe – and for architects, lawyers, accountants, doctors and many others who benefit from the mutual recognition of qualifications – it is a reality and a valuable one. So too for our creative industries which are European leaders. Progress in completing the single market in services will certainly be slower when we are no longer at the table. We won’t have any say over how it develops and we won’t get full access to it either.

Competition policy

The UK has been, throughout our membership, a firm supporter of the Commission’s role in enforcing fair competition rules and limiting state aids. Both these functions have protected our businesses against unfair competition. 

There is now pressure within the EU (from France and Germany in particular) to constrain the Commission’s powers and encourage the emergence of European “champions”. Outside the EU, we will no longer be able to push back against these developments. But we will still, almost certainly, be on the receiving end of the Commission’s powers as a part of any trade deal.

Edited by Hugo Dixon

Tags: Categories: Brexit, Sovereignty