However, the UK could also see ‘dynamic’ gains, such as an increase of the trend rate of growth (currently 2.5%), through firms experiencing greater competitive forces from the 27 other member states (which encourages research development), a greater supply of labour (combating the shortage of workers in essential industries due types of unemployment typical to the UK: such as structural unemployment exacerbated by hysteresis), and greater innovation (since it’s easier to exchange ideas across national borders within the Union). This would increase the quality and quantity of the factors of production available the UK, consequently fueling the trend rate of growth. These theoretical economic benefits arising from the establishment of the ‘Single market’ and its function of integrating of the Union’s member states are evident in practice. The HM Treasury concluded in 2005 that specifically UK trade with EU member states increased by 7% as a result of the ‘Single Market’. Contrary to popular belief, this was only at the expense of a proportionately higher diversion of trade from ‘third countries’ (which in reality was only 4%). Although the UK reaps the benefits of integration of EU members due to the single market, this integration does indeed differ from sector to sector. Economists like Professor Alasdair Young argue that the integration of services within the EU has not progressed as much as goods so the loss of access to this part of the single market would have little significance, especially since the UK economy is service based (according to the Financial Times, services currently make up 80% of the UK economy). Furthermore, in practice, although EU single market legislation allows for the free movement of labour, labour markets are still not very integrated. Wage dispersion levels are much higher than one would expect. This is partially due to the low levels of labour mobility (comparatively with nations like the USA). This largely results from the linguistic and cultural barriers within the European Union that hamper assimilation of many citizens of the member states to work productively with UK nationals. It is difficult to isolate the impacts of the Single European Act (1987) on economic growth due to contribution of wider developments towards the UK’s real national output. Wider developments in recent years include the general movement towards trade liberalisation in the global economy, the addition of members to the EU, and the fluctuating supply of tradable goods make it difficult to identify the consequences solely of the European Single Market. However, most studies present the argument that the Gross Domestic Product of the UK (and even the EU as a whole) is considerably greater than it would be without economic aid and European integration supplementing our economy’s existing prowess. Prior to the establishment of the ‘Single Market’ program in 1992, predictions concerning the rise in Gross Domestic Product that the ‘Single market’ would bestow were quite ambitious: such as the Cecchini Report 7 of 1988 . Contemporary studies such as Monti and Buchan’s findings in 1996 showcase that whilst the Gross Domestic Product increased upon the establishment of the ‘Single Market’, this increase was not as significant as prior predictions hoped for. Moreover, in 2007, the combined studies of Dierx, Kavocs, Ilzkovitz, and Sousa showcased that without the establishment of the ‘Single Market’ EU Gross Domestic Product would be 2.2% lower and lack the additional 2.75 million jobs created within the Single Market. Leave campaigners, like Boris Johnson and Michael Gove, would argue that these economic benefits obtained as a result of being a part of the ‘Single Market’ are undermined by the fact we send “£350 million a week to Brussels.” The use of this evidence does give their case some verisimilitude, however it is misleading since it doesn’t take into account the money we receive back from the EU acting as an injection into our economy (e.g. farmers subsidies handed out to UK farmers due to the Common Agricultural Policy). In conclusion, it’s evident that, although the legislation concerning agriculture and the ‘Single Market’ have their pitfalls and are a manifestation of sovereignty we have ceded to the European Union, these two huge aspects of the EU’s legislation protect the interests of individuals and have contributed the UK’s current title: “the fifth largest economy.” I do not believe the UK has “had enough of experts” (- Michael Gove), nor do I believe “taking back
7 Indicated that GDP could rise by 4.25-6.5% as a result of the Single Market 1992 program
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