What would Margaret do?

Post-truth is a phrase which seems to have gained a lot of currency in recent months. Or, as President Trump’s aide Kellyanne Conway would have it, the new president’s press secretary did not lie about the size of the crowd for Trump’s inauguration, he merely presented alternative facts. The presentation of alternative facts is rather how I felt when I went back again over Theresa May’s speech last week which contained a phrase so outrageous that the PM had to hide it in plain sight.

To recap, May told us that the UK is leaving the Single Market. And not only that but “both sides in the referendum campaign made it clear that a vote to leave the EU would be a vote to leave the single market.” As lies, sorry alternative facts, go that is a whopper. I don’t recall anywhere on the ballot paper being asked my opinion on this. Or did I just get an alternative ballot paper? Indeed, the lobby group British Influence has launched a legal bid to force the government to separate EU membership from the question of Single Market membership. Good luck with that, as I have no wish to rake over the coals of legal challenges to the referendum once again.

But there is a wider economic point which has not been made often enough – namely, that those elements of the Conservative Party calling for an exit from the Single Market are simply ignorant of their party’s history and do not understand what they are getting rid of. A great article by Ben Chu in The Independent (here) hit the nail on the head. He argues forcefully that many Conservative MPs do not appreciate the role played by their political heroine, Margaret Thatcher, in helping to bring about the Single Market in the first place. Indeed, whilst Thatcher was no fan of a federalist EU, she understood the benefits of free trade well enough.

In assessing what Thatcher’s views on Brexit might have been, we have to weigh her views on EU unity against her economic liberalism. The great irony is that they are not mutually exclusive, as might have been thought 30 years ago. Thatcher’s famous Bruges speech in 1988 ("We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level, with a European superstate exercising a new dominance from Brussels") resonates as powerfully today as it did then (here for a link to a contemporary UK newspaper report). As The Guardian put it at the time: “Dismissing as irrelevant proposals for a European central bank, Mrs Thatcher said the EEC should remain committed to a free market economy. ‘The basic framework is there: the Treaty of Rome itself was intended as a charter for economic liberty … But that is not how it has always been read, still less applied’."

One of the key lessons from last week’s speech by Theresa May was that she wants to open up the UK and make free trade agreements with the rest of the world. The crucial bit here is “free trade.” What is it that Brexiteers think we have now? The logic of their argument is “leave the EU to get more free trade.” Our PM believes that she will get “a new, comprehensive, bold and ambitious free trade agreement” with the EU. But what if she doesn’t? The UK will then have walked out of the comfort of the Single Market in the hope of being able to get better deals elsewhere. As dumb economic gambles go, this one is up there.

Thatcher used a speech at Lancaster House in 1988 – ironically the same venue used by May – to make the point that the EU offers “A single market without barriers – visible or invisible – giving you direct and unhindered access to the purchasing power of over 300 million of the world's wealthiest and most prosperous people. ” Perhaps the EU did move too close to being the federalist state so opposed by many UK politicians. But I find it bizarre that a government which nominally extols the virtues of free trade should walk away from one of the world’s great free trade areas, in the pursuit of the chimera of better trade prospects elsewhere. And for what? Even Judas was rewarded with 30 pieces of silver.