Rejoining EFTA would have made Brexit better

Daniel Hannan, the former MEP for South East England, elevated to the House of Lords by a grateful Boris Johnson for his role in promoting the benefits of Brexit, has always balked at the idea of placing anything more substantial than a net curtain between Britain and its continental neighbours. 

Hannan’s opposition to the EU, though visceral, is political in nature. He has no objections to the Single Market, as endorsed by Margaret Thatcher. On the contrary, he regards free trade across Europe’s internal frontiers as a fundamental good, to be cherished. 

His objections to “Europe” always lay elsewhere. Ever Closer Union was not for him. Everything from the Maastricht Treaty in 1992 to the Lisbon Treaty of 2007 was anathema, and those in Britain who continued to support the EU in its 21st century iteration were deluded fools. In 2008, he stretched credulity when he likened the European Parliament, of which he was a member for 21 years, to the German Reichstag which in 1933 voted in favour of Hitler’s rule by decree. 

As a leading member of the European Research Group within the Tory Party, Hannan found himself in something of a bind once it became clear that his colleagues not only wanted to throw the free trade baby out with the bathwater of EU imperialism, but regarded the baby as the Devil’s spawn. 

According to the ERG, Britain in 1972 had voted to join the then Common Market in the belief that it was all about trade and that it was its subsequent transformation into a putative superstate that it couldn’t abide. Yet in the months before and after the referendum, Tory after Tory on the Eurosceptic right demanded a root and branch departure, going so far as to claim that the UK’s liberation from the strangulating grasp of the Single Market (for which read freedom of movement across the EU, in the treaties since 1957) was what Brexit was all about. 

Hannan disagreed. He had qualms about the way in which mass immigration into the UK had been handled since the absorption into the bloc of various East European states, but he continued to regard well-regulated immigration per se as beneficial to both the economy and societal development. 

Had he defended this position and come out strongly for rejoining the European Free Trade Association (EFTA) within the broader-based European Economic Area (EEA), he could have been a significant moderating influence on the subsequent negotiation. But that’s not what happened. While holding to his liberal view, he refused to denounce the ERG, Nigel Farage, Johnson, Michael Gove, Dominic Cummings and the rest as they rushed to embrace the hardest of hardline Brexits. 

But in Friday’s Daily Telegraph, Hannan finally broke cover.  

“Staying in the single market, or large parts of it, would have saved us a lot of trouble,” he wrote. “Had we declared, immediately after the 2016 vote, that we intended to return to EFTA – the body we founded in 1960 as an alternative to the EEC [European Economic Community] – we would not have been at risk of an EU trade embargo. The withdrawal issues, notably the management of the Irish border, would have been much more easily resolved.” 

He didn’t leave it there, of course. He went on to explain that what he had sought for Brexit was a Swiss-style arrangement that in effect would have obliged the UK to follow EU trade rules and to keep its borders open to EU migration. Reminding his readers, ruefully, that in 2014 he had said “no one was talking about leaving the single market,” he went on to argue that there was no point in crying over spilt milk and that the current tragedy was not that Britain had abandoned the Single Market, but that it had failed to exploit the opportunities Brexit presented to deregulate its own internal market and thus make itself attractive to international capital. 

The government, he concluded, was now pursuing “semi-socialist economic policies which poll well in the short term, but which condemn us to long-term poverty”. 

So, damned if we didn’t, damned if we did. 

Was he right? Would the UK have been better off today if it had withdrawn from the EU but rejoined EFTA?

Here is what that would have meant: 

The UK would have formally left the European Union. It would have given up its role in the European Commission, the European Council, the European Parliament and the European Court of Justice. None of the future decisions taken by any of these bodies would have impacted Britain outside of the regulation of the internal market and the right of EU nationals to live and work in the UK. 

We would, along the way, have left the Common Agricultural Policy and the Common Fisheries Policy, which might not have been good for farmers but would have restored Britain’s control of its territorial waters. 

On the EFTA Council, we would have sat alongside Switzerland, Norway, Iceland and Liechtenstein (and in future, no doubt, Ukraine), which formally negotiates trade and market issues with the Commission. EFTA has its headquarters in Geneva as well as an office and representations in Brussels.  

The role of the court of justice would have been confined to cases directly arising from the operation of the Single Market, including freedom of movement. Even then, EFTA has its own Luxembourg-based court, which cooperates with the ECJ. It uses the same rulebook but is not automatically bound by its decisions.    

Beyond meeting its share of the cost of maintaining the Single Market, Britain would no longer have paid into the EU budget, saving the Treasury at least £10bn a year plus an amount of the cash that is now due as part of the Brexit divorce settlement. 

As was already the case, we would not have joined the single currency or been bound by the Schengen open borders accord. We would, however, have continued to benefit from the so-called Dublin III treaty that allowed us to send illegal immigrants back to their point of origin within the EEA – usually France. 

The Channel ports, most obviously Dover and Calais, would have remained open, liable only to security checks and passport control. There would have been no threat of a trade war. Lorries would have continued to roll on and roll off largely unimpeded. Exporters would not have been burdened with additional border checks or post-Brexit paperwork. A company in Bristol wishing to sell to a customer in Dresden would simply have booked space on the relevant transport. 

There would have been no Northern Ireland Protocol. The Irish border would have remained exactly as it was before Brexit, unmanned and uncontested. There would have been no requirement for a customs border in the Irish Sea, no need for EU inspectors at the ports of Belfast and Larne. The Stormont Executive and Assembly would have been up and running. Sir Jeffrey Donaldson of the DUP would have had nothing to whinge about other than his detestation of Sinn Fein and dislike of the Irish language. 

By joining EFTA while remaining outside the Customs Union, Britain would have been as free as it is now to negotiate trade deals with countries outside the EU – a key red line for the ERG. The Good Ship Royal Sovereign could have put on as much sail as it wanted as it sailed the seven seas. 

Britain would have become an associate member of Europol, with full access to its database and officers stationed throughout the organisation’s headquarters in the Hague. We would also have been entitled to retain our membership of other EU programmes such as the Erasmus student exchange scheme and the Galileo satellite navigation system. 

Smartphone roaming charges would have disappeared for good. 

On the debit side (if you are a hardline Brexiteer), EU nationals would have retained the right to live and work in the UK. Nigel Farage – who seems to spend half his life on boats in the Channel chronicling the arrival of waves of illegal immigrants, none of them EU citizens – would have gone ballistic. At the same time, UK citizens would have been free to live and work in the 27+3 and would have joined EEA lines at airports and ferry ports. 

Smart Brexiteers, like Hannan, recognised that EFTA membership was the way to go. We could, to coin a phrase, have had our cake and eaten it, too. But it was not to be. The All-Out faction took over the talks at an early stage, led by those for whom concerns about immigration, combined with resentment over the unelected role of the Commission, the elected role of the Parliament and the “un-British” nature of the court trumped mere ease of trade. 

They were not to be moved. As a result, we are witnessing a worsening trade deficit with Europe, disruption at the Channel ports, disaffection in Northern Ireland and the grumblings of those of us who have to stand in the “Others” lines in Paris, Ibiza and Prague clutching our new blue passports printed in Poland by the French-owned Thales group.