Will a post-EU Britain still have access to the single market?
It depends who you talk to. Boris Johnson wrote in his Daily Telegraph column on Monday that there will be continued access. By contrast Wolfgang Schäuble, the German finance minister, has said there will not, as has Philip Hammond, the British foreign secretary. This is a matter that will be absolutely key to the exit negotiations, which will begin once Article 50 has been invoked.
What’s important to bear in mind is that much of the EU establishment is opposed to giving Britain an easy ride over the terms of its exit because of fears of copycat referendums. There is much talk of “no special treatment”. So if Britain wants to negotiate continued access to the single market – which would be overwhelmingly desirable, given how vital passporting rights are for its financial sector – then a condition would be that it also accepts free movement of people.
But this flies in the face of the promises made by the Leave campaigners to reduce immigration. Mr Johnson, who has realised he faces a dilemma, has already started trying to manage expectations in this regard. His problem is that if he leads a government which accepts free movement in order to keep access to the single market then it would deeply anger the UKIP-inclined Brexiters and quite conceivably split the Conservative party. That is why he urged caution in his column and said there is no rush to set the negotiations in motion. In short, he hasn’t figured it out yet.
So, as with much else, the question is one that can only be answered once the current volatile political situation becomes more stable. This uncertainty is bad news for the financial sector and some banks have already announced plans to start re-locating staff.