A Brexit deal everyone can support

About the ‘Common Market 2.0’ Group

The Common Market 2.0 Group is an informal group of MPs

who are committed to overcoming narrow tribal party-political
divides, in the national interest.

We don’t have a formal committee structure, and nor do we

have any official designation or legal status. We are simply
united by two core beliefs: first that MPs must continue to
act to ensure that the UK does not crash out of the European
Union (EU) without a deal, and second that the Common
Market 2.0 proposals which are set out in this document
represent the only form of Brexit that respects the referendum
result while protecting the jobs and livelihoods of our
constituents.

The Common Market 2.0 Group wishes to thank George Peretz

QC, Anneli Howard, Adrian Yalland and Prof Sir Alan Dashwood
QC for their legal expertise and expert guidance. We would also
like to thank the Essex Research Trust and Lord Sainsbury for
their financial support.
Contents

Foreword 1

Leading the way in a 21st century Common Market 3

Respecting the referendum result without wrecking the economy: 3

why we need Common Market 2.0
The path to Common Market 2.0 4
A leading role in Europe, outside the EU 5
The EU and EFTA countries support our proposals 5

Common Market 2.0: more control with continued economic access 7

Common Market 2.0 offers new powers to control immigration 8

Common Market 2.0 would enhance our national sovereignty 9
UK payments would reduce significantly 11
A negotiated Customs arrangement would mean the Irish backstop 11
would not need to be activated
Leading Brexit campaigners supported an EFTA-based Brexit 11
ahead of the referendum campaign

A prosperous future for the UK 13

Trade 13
Security 13
Workers’ rights 13
Citizenship rights 14
Standards and regulations 14
Participating in EU agencies 14
Environment 15
Industry and procurement 15
Digital 15

Conclusion 16
 Substantively, we also believe our plan meets
Foreword
the key issues expressed in the referendum
itself and the key stumbling blocks that have
The UK is a great country with a long and proud
emerged since, as well as getting us as close as
history. Yet one thing most will probably agree
possible to “the exact same benefits” offered
on is that we aren’t exactly covering ourselves
during the referendum.
in glory right now. In fact, much of the public
feel quite alarmed at the seeming mess we
Our proposal takes as its starting point the
have got ourselves into with Brexit. Many are
common refrain that we heard from voters
fed up to the back teeth of hearing about all
in our constituencies during the referendum
the endless Groundhog Day twists and turns.
campaign: “We voted for a Common Market,
The only way out of this mess is to take a new
not all this political stuff.” In the 1970s and
approach. Politicians of all parties need to work
1980s, the British people broadly supported
together to deliver a sensible Brexit deal.
our membership of the European Economic
Community (EEC) because it delivered clear
As it stands, all of the current options have
economic benefits to British businesses and
been firmly ruled out. May’s deal has been
workers. It was only as the “ever closer political
consistently rejected, Parliament has firmly
union” took hold, that people began to turn
ruled out No Deal and there aren’t the numbers
against it. Common Market 2.0 offers us a way
for a Second Referendum. Increasingly, MPs
to recreate that simple economic relationship,
from all parties are reaching the conclusion
which is free of all the political paraphernalia of
that we need to put aside tribal, political
the modern EU.
differences and accept that every option carries
risks and no one outcome is anyone’s ideal.
As members of Common Market 2.0, the UK
would still have to accept the free movement
We are coming together to argue for a Brexit
of workers from other European countries,
deal that delivers the result of the 2016
but we would have new powers to impose
referendum and protects the economic
unilateral restrictions on European migration in
interests of people right across the UK.
exceptional circumstances if our government
Our plan is based on the idea that after the
deems it necessary. This is because the European
transition, in December 2020, the UK should
Economic Area (EEA) agreement gives members
join a new Common Market for the 21st
the right to suspend freedom of movement
century. Let’s call it Common Market 2.0.
if it can show that it is suffering from “serious
economic, societal or environmental difficulties”.
Politically, the Common Market 2.0 would:
In addition, we believe the government should
• Offer Theresa May a last chance of a deal enforce more strictly existing requirements for
that can command a cross-party majority European migrants to find work within three
and win the support of business leaders months or otherwise demonstrate that they can
and trade unions. support themselves without claiming benefits.
• Meet Labour’s five key demands for a Successive governments have failed to enforce
Brexit deal through membership of the these rules properly and have let down the
Single Market and an EU-UK customs communities we represent.
arrangement.
• According to the EU’s chief negotiator
Michel Barnier, offer genuinely frictionless
trade with the EU as it is based on a set of
institutions and procedures that already
exist.
1
In Common Market 2.0, most EU rules would
not apply to us at all as we would be outside
the common agriculture, fisheries, justice,
home affairs, foreign and defence policies. UK
representatives would sit on the policy-shaping
committees that draw up proposals for new
Single Market legislation and we would be able
to resist pressure to implement new rules that
we don’t like. EU law would no longer have either
“direct effect” or “direct applicability” in the UK.
We would leave the jurisdiction of the European
Court of Justice (ECJ) and join the European Free
Trade Association (EFTA) court. UK courts would
once again be supreme. Parliament would be
sovereign.
Although we would still need to make a financial
contribution for access to the Common Market
2.0, the annual amount would equate to not
much more than half the amount we currently
pay.
Finally, as members of both the Single Market
and a new comprehensive customs arrangement
that initially will involve applying the existing
common external tariff, there would be no
reason for the Irish backstop ever to be activated.
The union of Great Britain and Northern Ireland,
which is precious to all of us, would remain
intact and the foundations of peace in Northern
Ireland as set out in the Good Friday Agreement
preserved in perpetuity.
In summary, the Common Market 2.0 would:
1. Safeguard jobs by offering real
frictionless trade through full access
to the Single Market and a new
comprehensive customs arrangement.
2. Guarantee workers’ rights and
protections for the long-term as part of
Common Market membership.
3. Provide new controls over Free
Movement in exceptional circumstances.
4. Take back control of budgetary
contributions from the EU to allow
more money for public services as our
contributions to the Common Market 2.0
would be significantly lower than to the
EU.
5. Take the UK out of ever closer union
which would remove jurisdiction of the
ECJ and take us out of the common
fisheries, agricultural, justice, home,
foreign and defence policies.
6. Eliminate the need for the Irish backstop
to be activated because we would move
seamlessly from the transition into
Common Market 2.0.
This pamphlet sets out the significant
benefits of Common Market 2.0 for the UK
when it leaves the EU. We believe this offers
a genuine opportunity to not only command
a majority in Parliament but to bring together
the country around the UK leaving the EU by
creating a new, powerful partnership for the
long-term.
Delivering Brexit in a way that protects
the economic interests of the people
we represent will require all of us to
compromise. We believe that leaving the
EU and joining Common Market 2.0 is a
compromise that MPs of all parties, and all
shades of opinion, should be able to support.
2
1. Leading the way in a 21st century Common Market

Respecting the referendum result without wrecking the economy:

why we need Common Market 2.0

In 1973 the UK joined the EEC – otherwise The 52% to 48% margin of victory represents
known as the Common Market – a decision that a clear instruction to leave the EU but not a
was subsequently supported by a public vote mandate for a hard Brexit, let alone for leaving
in 1975. Yet in 2016, 17.4 million people voted without a deal.
to leave the EEC’s successor – the EU. So, what
changed between 1975 and 2016? The democratic will of the 52% must not
be ignored, and the EU referendum should
The answer is clear: the British people’s therefore be seen as a reset moment for
support for the UK’s relationship with the EU the UK’s relationship with our European
eroded, post-Maastricht. The EEC’s Common neighbours.
Market was popular among the British public,
but the project of political integration advanced A newly formed UK-EU Common Market for the
by the Maastricht Treaty in 1992 caused our 21st century would reflect the strong economic
paths to diverge. Between 1992 and 1995, UK ties between the UK and Europe that enjoyed
public support for strengthening our country’s broad democratic support throughout the
relationship with Europe dropped from 38% 1970s and 1980s, respecting the public desire
to 14% and never recovered. Support to leave for striking the right balance between political
the EU or weaken the relationship rocketed sovereignty and economic integration. It would
to over 50%. The events that followed – Tony recast our country’s relationship with the EU
Blair’s 2004 decision that the UK should accept in a way that would better reflect our history,
free movement of people from the so-called geography and politics.
accession eight (Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Poland, Slovakia, The cross-party group of MP’s supporting a
Slovenia) without a transition period, then later ‘Norway-style’ Brexit is therefore advocating
the Eurozone and refugee crises – only served that the UK leaves the EU and its political
to heighten concern about the UK’s place in the institutions in order to develop ‘Common
European project.1 Market 2.0’ – a Brexit that respects the
referendum result, protects the jobs and
The 2016 referendum was a call for the UK livelihoods of our constituents, and begins to
to leave the EU and its project of ever-deeper reunite our deeply divided country.
political integration. But the 52%/48% result
is also a call to maintain a strong, close and
productive economic relationship with those
500 million consumers on our doorstep. In
short, the referendum result is an instruction
to move house while remaining in the same
neighbourhood.

1
Matthew Goodwin, Brexit Britain: The Causes and Consequences of the Leave Vote, http://www.matthewjgoodwin.org/uploads/6/4/0/2/64026337/leave_vote_lecture.pdf

3

The path to Common
Market 2.0
To deliver Brexit based on Common Market 2.0
the UK will renegotiate the Political Declaration
to specify a future relationship with the EU
based on ongoing membership of the EEA
through the EFTA pillar. Therefore, during the
transition that ends in December 2020, the
UK will need to negotiate its succession to
EFTA with a derogation to allow an exemption
from EFTA’s free trade agreements. At the
same time the UK will negotiate its entry into a
comprehensive customs arrangement, with the
EU, including the common external tariff unless
and until alternative arrangements to secure
frictionless trade and avoid a hard border in
Ireland can be agreed. The Common Market
2.0 Group, just as Theresa May said in her
Lancaster House speech, ‘hold no preconceived
position’ on how this can be achieved.
EFTA
Iceland
Switzerland Liechtenstein
Norway
This form of Brexit would give the UK full
membership of the Single Market, which the
UK helped create, and which underpins so
many British businesses’ trading success. But
we would leave the EU’s political institutions,
the jurisdiction of the ECJ, the common
agricultural and fisheries policies and the EU’s
drive towards “ever closer union”. We would
also increase our power to control freedom of
movement.
On its accession to EFTA, the UK would move
into the EFTA pillar of the EEA, sitting alongside
the ‘EEA3’ of Norway, Iceland and Liechtenstein.
The ‘EEA3’ plus Switzerland make up EFTA.
EFTA is an intergovernmental organisation that
promotes free trade and economic integration
without political or monetary union. It was
founded in 1960. The UK was a founding
member until it joined the EEC in 1973.
The EEA Single Market is the extension of
the EU’s Internal Market to cover the EEA3
(Switzerland has its own bilateral deal with the
EU). Each EEA3 member pays into the EU but
only for the institutions and services that the
country accesses.
EEA
EU
EU member states
4
A leading role in Europe, The EU and EFTA countries
outside the EU support our proposals
Brexit is not just a reset moment for the UK, The EU has consistently made clear that a
but also for Europe. By leaving the EU and Norway-style relationship, combined with a
joining the EEA via the EFTA pillar the UK would comprehensive customs arrangement that
kick-start the re-imagining of the European delivers frictionless trade and no hard border
project that is so urgently and desperately in Ireland, is one of three options for the UK-EU
required. future relationship that they would support.
The governments of Norway and Iceland have
European leaders recognise the limitations of also been positive about the UK joining EFTA.
the EU’s one-size-fits-all, top-down approach
to integration. President Macron in particular The EU
has spoken openly in support of a “Europe of The EU’s chief negotiator Michel Barnier has
several circles” that better reflects the different been clear that there are three models for the
histories, cultures and political temperaments UK-EU future relationship: a Canada-style free
of its component parts.2 trade agreement (which would inflict significant
harm on our economy because it wouldn’t
The UK would have a central role to include most services, and which would put
play in leading a group of like-minded our union at risk because it would exclude
European countries that sit outside the Northern Ireland), World Trade Organisation
political institutions of the EU but enjoy full rules (which would impose substantial tariff
participation in the Single Market. Membership and non-tariff barriers to trade), or our
of this outer ring of EFTA countries would Common Market 2.0 model.
bring significant benefits to the UK, as outlined
throughout this pamphlet. In May 2018, Michel Barnier said:

UK membership would also bring substantial “The only frictionless model for the future with the
benefits to EFTA, increasing its size ten-fold UK would be Norway plus, Norway being part of
to over 70 million people. EFTA’s institutions the Single Market plus a customs union.” 3
would be strengthened as would EFTA’s
influence in deliberations with the EU. From the outset Barnier made it clear that a
Norway-style relationship would have been
Leading and strengthening an outer ring of welcomed by the EU side and that it had not
EFTA countries would mean an exciting new been explored because of the red lines that
future for the UK, EFTA and the EU. Theresa May put down.4

Michel Barnier has also made clear that

the EU was ready to renegotiate the Future
Relationship.

2
FT, 04 September 2018 https://www.ft.com/content/b9bc8caa-b026-11e8-99ca-68cf89602132
3
Express, 22 May 2018, https://www.express.co.uk/news/uk/963597/Brexit-news-Michel-Barnier-Northern-Ireland-border-Norway-plus-solution-EU-UK
4
Reuters, 19 December 2017, https://uk.reuters.com/article/uk-britain-eu-options/stairway-to-brexit-barnier-maps-out-uks-canadian-path-idUKKBN1ED23R

5
In January 2019 he said:

“If the United Kingdom chooses to change its red

lines, and to be more ambitious and go beyond a
simple free trade deal in our future relationship,
then the EU would be ready to immediately
support this evolution and respond favourably.”

EFTA countries
The Norwegian Prime Minister Erna Solberg
has made it clear that Norway will welcome us
into EFTA. She has said that Norway will help
the UK “find solutions” if we want to join (28
November 2018).

“If that is what they really want, we will find

solutions in the future.”

“To find a good agreement is important for all

European countries and I hope that we will see an
orderly deal that doesn’t disrupt economic affairs
in Europe.” 5

The only notable Norwegian politicians to claim

that Norway would reject our membership are
campaigners for Norway to leave EFTA and join
the EU.

The Icelandic Foreign Minister Guðlaugur Þór

Þórðarson told BBC’s Newsnight:

“We would be very positive towards the idea of the

UK joining EFTA or the EEA.” 6

5
MSN (28 November 2018) https://www.msn.com/nb-no/nyheter/verden/solberg-sier-britene-er-velkomne-i-efta/ar-BBQcDyS
6
Newsnight ( 27 November 2018) https://twitter.com/bbcnewsnight/status/1067551073269772288?lang=en

6
2. Common Market 2.0: more control with continued
economic access

As this table shows, by leaving the EU and joining the EEA via the EFTA
pillar, the UK would remove itself from a significant number of EU
commitments and increase national sovereignty across a range of areas.

UK as EU Member UK in CM2.0

Single Market Access Yes Yes

Financial services access Yes Yes

Tariff free trade with EU27 Yes Yes

Freedom of movement Yes Yes

Immigration Controls No EEA ‘Safeguard Clause’

EU financial contributions Yes ~50% per head

Voice on global standards bodies No Yes

EU Rules Yes Only 28% apply

Right to resist new rules No Yes

CAP and CFP Yes Exempt

Common Foreign & Defence Policy Yes Exempt

Justice & Home Affairs Policy Yes, with opt-outs Exempt

European Court of Justice Yes Exempt

No, unless we choose to

Charter of Fundamental Rights Yes
participate

EU Science/Education Programs, e.g No,unless we choose to

Yes
Galileo participate

7

Common Market 2.0 offers
new powers to control
immigration
Under Common Market 2.0 we would
participate fully in the Single Market, which
entails freedom of movement. We would
however be in an improved position in two
significant respects (in large parts delivering
what David Cameron attempted but failed to
secure in his renegotiation with the EU in 2016).
Under Common Market 2.0, the UK:
• Would have a qualified but unilateral right
to suspend freedom of movement
• Would be able to apply existing rules more
effectively than at present
We would have the power under Article 112
of the EEA Agreement to take ‘safeguarding
measures’. This allows an EEA/EFTA state to
take ‘appropriate measures’ in the event of
‘serious economic, societal or environmental
difficulties of a sectoral or regional nature
liable to persist’. This would mean that if EEA
immigration reached extraordinary levels, we
would have the power to impose restrictions.
This safeguard clause could be applied on
a regional basis. For example, if difficulties
arose of a regional nature it would be possible
to restrict free movement in a region while
maintaining it in other less affected areas. This
could mean that if Scotland wanted to continue
free movement on current terms it would be
able to do so while other parts of the UK facing
particularly high levels of immigration could
implement safeguard measures.
Article 112
1. If serious economic, societal or
environmental difficulties of a sectorial or
regional nature liable to persist are arising,
a Contracting Party may unilaterally take
appropriate measures under the conditions
and procedures laid down in Article 113.
2. Such safeguard measures shall be restricted
with regard to their scope and duration
to what is strictly necessary in order to
remedy the situation. Priority shall be given
to such measures as will least disturb the
functioning of this Agreement.
3. The safeguard measures shall apply with
regard to all Contracting Parties.
In the event that the UK used the safeguard
clause, Article 113 of the EEA Agreement
provides for a dialogue between the UK and
the other EEA countries, in order to establish a
long-term solution to the underlying problem.
The invoking party must call a conference and
seek to resolve the underlying issues which
led to the measure. This is done via the offices
of the EEA Joint Committee. If the negotiation
breaks down, Article 114 permits the other EEA
states to take proportionate counter-measures
but only those “strictly necessary to remedy the
imbalance.”
Article 113
1. A Contracting Party which is considering
taking safeguard measures under Article
112 shall, without delay, notify the other
Contracting Parties through the EEA Joint
Committee and shall provide all relevant
information.
2. The Contracting Parties shall immediately
enter into consultations in the EEA Joint
Committee with a view to finding a
commonly acceptable solution.
8
3. The Contracting Party concerned may
not take safeguard measures until one
month has elapsed after the date of
notification under paragraph 1, unless the
consultation procedure under paragraph 2
has been concluded before the expiration
of the stated time limit. When exceptional
circumstances requiring immediate action
exclude prior examination, the Contracting
Party concerned may apply forthwith the
protective measures strictly necessary to
remedy the situation.
4. For the Community, the safeguard
measures shall be taken by the EC
Commission.
5. The Contracting Party concerned shall,
without delay, notify the measures taken to
the EEA Joint Committee and shall provide
all relevant information.
6. The safeguard measures taken shall be
the subject of consultations in the EEA
Joint Committee every three months from
the date of their adoption with a view to
their abolition before the date of expiry
envisaged, or to the limitation of their scope
of application.
7. Each Contracting Party may at any time
request the EEA Joint Committee to review
such measures.
Article 114
1. If a safeguard measure taken by a
Contracting Party creates an imbalance
between the rights and obligations under
this Agreement, any other Contracting Party
may towards that Contracting Party take
such proportionate rebalancing measures
as are strictly necessary to remedy the
imbalance. Priority shall be given to
such measures as will least disturb the
functioning of the EEA.
2. The procedure under Article 113 shall apply.
9
It is important to note that such a safeguard
power would only be available in extraordinary
circumstances. But this is precisely the power
that David Cameron tried to secure during
his renegotiation with the EU and which was
resisted by the EU at the time. This implies that
in the eyes of the EU this power could have a
serious and substantial effect.
As members of Common Market 2.0 we could
improve the enforcement of existing rules in
relation to Freedom of Movement. After three
months, EEA migrants need to be in work or
be able to demonstrate they have a job. If they
cannot, their right to reside may be revoked.
Some EU countries, including Belgium, Spain
and Germany, already enforce these rules
better than the UK does.
The combination of Article 112 and stricter
enforcement of the current rules would put
the UK in a significantly better position to deal
with large rises in immigration. If large, new
countries were to join the EU and extraordinary
levels of immigration were to occur we would
be able to implement the safeguard measure
to ensure that migration did not reach the
levels experienced during the mid 2000s.
Common Market 2.0 would
enhance our national
sovereignty
Under Common Market 2.0, the UK would
have:
• A voice in the consultation process of any
proposed new EEA laws
• A vote on the EEA Joint Committee where
unanimity is required
• A domestic right of refusal to implement
new EEA law into its own domestic law
Common Market 2.0 would restore policy-
making power in a wide variety of areas,
end direct effect and direct applicability of
European Law, ensure British influence in the
shaping of Single Market regulations and end
the jurisdiction of the ECJ. The UK would have a
voice, vote and right of refusal over proposed
new EEA law.
ECJ Jurisdiction ends
Under Common Market 2.0 we would leave
the oversight of the ECJ and come under the
jurisdiction of the EFTA court. The EFTA court is
a separate and independent court covering a
separate and independent jurisdiction. Except
for decisions pre-dating the EEA Agreement in
1994, the EFTA court is not obliged to follow
the decisions of the ECJ. This is similar to how
English courts are not obliged to follow the
decisions of the Scottish courts.
Although highly authoritative, EFTA rulings are
not legally binding on the EEA/EFTA states and
cannot be imposed. The UK could expect to
negotiate as least one of the four judges on the
EFTA court in contrast to one-in-28 on the ECJ.
Voice, Vote and a right of refusal
Outside the EU and under Common Market 2.0
we would restore policy-making power in vast
areas including agriculture, fisheries, foreign
and security affairs, justice and home affairs
and taxation. This would mean for example
that we would leave the Common Fisheries and
Agricultural Policies.
A genuine voice
We will have considerable influence over the
initial shape of new EEA legislative proposals
because the EU is obliged to consult all EEA/
EFTA states on any new legislation. EEA/
EFTA state experts participate in the EU
Commission’s preparatory work and have
representatives on policy-shaping committees
as well as having observer status in the EU’s
various institutions. Furthermore, the UK would
regain its seat at global bodies such as the
WTO. This means we will actively be able to
shape global standards that are the basis for
many EU and EEA laws.
A genuine vote
If an EEA/EFTA state is not satisfied with a
proposed Single Market law they can contest
the relevance of new EEA law to the functioning
of the Single Market and seek to secure
changes, adaptations or derogations. This
occurs through the EEA Joint Committee where
representatives from the EU and EEA3 meet
‘to decide on’ whether to ratify the proposed
new EEA law. New EEA law is only incorporated
into the EEA Agreement with the unanimous
agreement of the EU and the EEA/EFTA states
(unlike in the EU Council where voting is on
the basis of a qualified majority) which means
that the UK would have genuine influence over
new EEA law. This process yields results. For
example, Norway obtained derogations from
55 legal acts and Iceland from 349 acts, up until
June 2011 alone.
1. The ‘Third Energy Package’– EU legislative
package entered EU law in 2009
• Norway only put it into domestic law in
March 2018.
• Iceland are yet to do so.
2. The ‘Third Postal Service’ – EU Directive
•N
 orway refused to implement this
into domestic law in 2011. Eventually
implemented in 2013.
3. The ‘Hygiene Package’– EU legislative
package
• Norway only implemented this five years
after it became EU law.
A genuine right of refusal
We would no longer be committed to ‘ever
closer union’ and the imposition of EU law
into UK law through ‘direct effect’, and ‘direct
applicability’ would end. Indeed, because of
10
this, the UK Parliament would actually be
required to incorporate EEA law into British
law meaning genuine democratic oversight
of the proposed new EEA law is achieved by
the EFTA states’ own Parliaments. Crucially
these new EEA laws will only take effect if they
are incorporated into UK law by Parliament
precisely because the ability of the EU to
impose law on the UK ends at Brexit and
the EEA Agreement ‘ringfences’ the national
sovereignty of non-EU signatory states. This
means the EFTA states maintain (and have
used) a domestic right of refusal. For example,
Norway took five years to implement the EU
‘Hygiene Package’ of regulations and nine
years to implement the ‘Third Energy Package’.
Iceland is yet to do so. In 2011 Norway refused
to implement the ‘Third Postal Service’. This is
an extreme measure and rarely used because
the purpose of the EEA legislative process
is to achieve legislation by consent and not
imposition and generally speaking it does so.
But it also means the UK would gain a ‘right of
reservation’ over any new EEA laws it currently
lacks as a member state of the EU. Under
Article 102 of the EEA Agreement, the EU may
take reasonable countermeasures including
suspending that particular part of the EEA, but
an EFTA country can still refuse to implement a
piece of EEA law because its sovereign right to
do so is ‘ringfenced’ by the EEA Agreement.
UK payments would reduce
significantly
Norway pays £140 per capita per annum vs.
the UK’s current £220 (post-rebate). Norway
makes annual contributions of €450m to
cover the cost of Norwegian participation in
joint programmes, schemes and agencies,
and pays a €50m membership fee to EFTA.
But it also makes €390m in voluntary grants
via EEA Grants Scheme. What is most notable
11
about this EEA Grants Scheme – other than it
being a voluntary ‘goodwill’ scheme – is that it
is calculated on the basis of the Norway’s per
capita GDP. If the UK decided to follow a similar
scheme, Norway’s per capita GDP is about
$76,000 per year whereas the UK’s current GDP
is $39,000 per capita, meaning the UK would
pay close to half of what Norway pays.
A negotiated customs
arrangement would mean the
Irish backstop would not need
to be activated
The biggest concern for many Conservative
MPs regarding the Government’s Withdrawal
Agreement is the Irish protocol and specifically
the backstop, due to the fact that the UK
cannot exit the arrangement – should it be
required – unilaterally.
Under Common Market 2.0 the UK would be in
the Single Market and therefore all regulations
would apply to the UK in the same way as they
apply to the Republic of Ireland with customs
arrangements, at least initially, applying as
they do currently. Therefore there would be no
reason for the backstop to be activated.
Leading Brexit campaigners
supported an EFTA-based
Brexit ahead of the referendum
campaign
Support for Common Market 2.0, under its
various banners, has come from across the
House of Commons and across the Brexit
divide. Conservatives and Labour politicians are
working together in the Common Market 2.0
Group, and 76 Labour backbenchers defied the
whip in June 2018 to back an EEA-based Brexit
in what was the largest rebellion in the history
of the Parliamentary Labour Party.

And a number of prominent Leave

campaigners – including Daniel Hannan,
Nigel Farage and Owen Paterson MP – all
consistently advocated staying in the Single
Market during the campaign.7

Daniel Hannan MEP said:

“Norway and Switzerland, all of these countries

have completely free trade with the EU, and by the
way, I can’t help noticing they’re doing pretty well.”

“Absolutely nobody is threatening our place in the

Single Market.”

Nigel Farage MEP said:

“I hear people say “Wouldn’t it be terrible if we

were like Norway and Switzerland? Really? They
are rich, they’re happy and they’re self-governing
countries.”

“Norway, Iceland and Switzerland do pretty well.”

“Norway has no ties in terms of their foreign

policy, with their fishing industry... They are opted
out and exempted from all of the things that make
the British mad.”

Owen Paterson MP said:

“Only a madman would actually leave the

market.”

7
People’s Vote (Youtube: 17 Nov 2016) https://www.youtube.com/watch?v=0xGt3QmRSZY

12
3. A prosperous future for the UK

Trade highly successful financial services industry

relies on its financial passports which ensures
Common Market 2.0 would secure the that they can operate across Europe from the
prosperity of the UK through continued UK. The current Political Declaration would
membership of the Single Market and a new not maintain current trading terms in services
comprehensive customs arrangement with as it involves leaving the Single Market, which
the EU. This option is the only one that can would risk businesses moving to other parts of
maintain frictionless trade with our largest Europe.
trading partner. Any other option, at least until
technological solutions can be found, involves Security
an increase in trade barriers and would likely
harm our economy, putting jobs at risk. Common Market 2.0 will give the police the
tools they need to fight crime and protect our
Continued membership of the Single Market people. By re-joining EFTA we will be able to
ensures tariff-free access to the EU and the negotiate continued access to crucial databases
other EEA/EFTA states. The government’s such as the Schengen Information System (SIS)
proposal by comparison only includes an that the police used 539 million times in 2017.
aspiration for tariff-free access. This option We will also be able to negotiate access to
would guarantee it as a treaty right under the the exchange of fingerprints and DNA which
EEA Agreement. Membership of the Single are used to help catch suspects and potential
Market would, along with a comprehensive terrorists. No country outside EFTA or the EU
customs arrangement, ensure that there are no have access to these arrangements.
additional border checks. This is vital given the
volume of UK trade with the EU. For example, Workers’ rights
2.6 million freight trucks passed through Dover
in 2016. Any additional paperwork such as Common Market 2.0 ensures that we not
Rules of Origin Declarations will be costly for only maintain current workers’ rights and
firms and any additional checks could lead to protections but that we keep pace with future
disruptive and costly delays. Additional costs rights and protections. A No Deal Brexit
could put jobs at risk. and the current Withdrawal Agreement put
British workers’ rights at serious risk. The
It is essential we maintain full participation commitments within the Prime Minister’s
in the Single Market in order to protect our Withdrawal Agreement to protect employment
service industries, which make up about 80% of law are unenforceable and weak, and are
the UK economy. Common Market 2.0 delivers excluded from the legal measures that bind the
on this. Any additional barriers will raise costs rest of the agreement.8 Those arguing for a No
and put jobs at risk. For example, the UK’s Deal Brexit have spoken openly of the desire

8
The Guardian, 26 November 2018 https://www.theguardian.com/commentisfree/2018/nov/26/theresa-may-brexit-deal-rights-at-work-eu-protections.

13
to see wholesale deregulation, which would
include watering down labour standards.
Common Market 2.0 leaves us open to
maintaining the current rights and protections
we enjoy, as per the high EU labour standards
currently in place. It is these rights, such as
the working time directive, rights on annual
leave, equal pay, maternity and parental leave,
anti-discrimination and even health and safety
laws, that British workers rely on to live a good
quality of life. Remaining a member of the
EEA would allow for the implementation of EU
employment-related regulations into UK law,
ensuring British people could still benefit from
these protections.
Common Market 2.0 allows us to leave the
EU as the British people have directed, but
maintain essential employment protection
ordinary working Briton’s rely on.
Citizenship Rights
There is no concept of “citizenship” in the EEA
Agreement and the EU Charter of Fundamental
Rights does not apply. The EEA Agreement is an
economic treaty and not political one. However,
Annex V obliges EFTA state contracting parties
to respect the Citizenship Directive rights of EU
citizens, and also to extend equivalent rights to
their own subjects and other EFTA state citizens
even though they are not themselves citizens
of the EU. While this would not equate to the
continuation of EU citizenship, which will end at
Brexit, it should be of considerable comfort to
UK citizens anxious about losing key citizenship
rights such as free movement, residence and
healthcare.
Standards and regulations
Common Market 2.0 is the only plan that
can ensure frictionless access to European
markets, maintaining the standards that British
consumers expect. It will keep identical or
equivalent regulations meaning no additional
costs to business and no additional paperwork.
This is vital for the around 2.6 million freight
trucks passing through Dover each year.
Those backing a No Deal Brexit have spoken
openly about their desire to remove the UK
from European standards and regulations. This
could mean settling for lower standards on
goods after Brexit.
This plan would also mean that the UK would
regain its seat at global bodies such as the
WTO. This means we will actively be able to
shape global standards that are the basis for
many EU and EEA laws.
Participating in EU agencies
The EEA3 States participate in the agencies
below through decisions of the EEA Joint
Committee. In addition, bilateral agreements
with the EU ensure the participation of
individual EEA3 States in several other EU
agencies. The EEA3 participate in numerous
agencies and programmes, including
REACH (Chemicals), EMA (medicines and
pharmaceuticals, environment, food safety,
pensions, securities and markets, network and
information security, railway, maritime and
aviation safety). The EEA3 also have the option
of joining programmes like Erasmus, Horizon
20/20, Copernicus (environment), European
satellite navigation systems (Galileo) and the
Connecting Europe Facility (CEF) dealing with
telecoms and broadband.
14
This means the UK would have the option of the one railway line in Lichtenstein). The
remaining in the agencies and programmes Norges Statsbaner AS, the Norwegian State
that we want to. This would include areas that Railway company, the government owned
the Prime Minister’s current deal fails to secure operator of the railways, was established
continued engagement in – Galileo being the in 1996, after Norway entered into the EEA
most obvious example. Agreement (when a larger railway company
was split into separate state-owned operation,
Environment administration and inspectorate bodies).

Current members of the EEA have agreed In the EEA, state aid is monitored by the EFTA
their ‘determination to preserve, protect and Surveillance Authority, meaning determinations
improve the quality of the environment and to are made by EEA members through a separate,
ensure the prudent and rational utilisation of parallel structure to that which monitors state
natural resources on the basis of the principle aid in the EU. The EFTA working group on
of sustainable development’. state aid meets when required to determine
the specifics of how state aid rules will be
In practice, this means all EFTA/EEA states interpreted within the EEA, and is the means by
commit to agreements on water, air, chemicals which discussions on state aid between the EEA
and waste, and the equivalent environmental and the EU are conducted.
protections as EU membership.9
Digital
Industry and procurement
British business, not least our vital services
The EEA states come under the same state aid industries, rely on the free flow of data across
rules as EU members. These state aid rules national borders. Data flows freely within the
prevent governments giving any business an EEA and EU, and both the EEA and EU grant
unfair advantage that would distort trade. ‘adequacy’ agreements with third countries
Such rules do not prevent governments from to allow the international transfer of personal
nationalising already privatised industries or data to countries outside of these areas. As a
prevent the state from setting up government member of the EEA, the UK would be covered
backed alternatives to privatized industries. by the existing data agreements and there
There are no policies in any of the major parties would be no need for a separate agreement,
manifestos from the last election that current meaning frictionless data flows, benefitting
state aid rules would in any way curtail.10 British business.11

As Norway has shown, it is possible under

existing rules of the EEA for the state to play
a greater role in the delivery of services.
Norway has spent more on state aid than the
vast majority of EU countries, and a lot more
than the UK. For example, the Norwegian
government operates its domestic railways
(and the Austrian Federal government operate

9
EFTA, January 2019, http://www.efta.int/eea/policy-areas/flanking-horizontal-policies/environment
10
Andy Tarrant, Fabian Society: https://fabians.org.uk/negotiating-the-red-lines
11
EFTA, January 2019, http://www.efta.int/EEA/Data-Protection-505036

15
4. Conclusion

Politicians, of all stripes, have expressed support for the adoption of

Common Market 2.0. This is a Norway-style solution that would see us leave
the political institutions as voted for in the referendum while avoiding the
prickly issue of falling into the backstop.

We would avoid the backstop by joining EFTA - an off the shelf arrangement.
As the institutions already exist this future relationship can be negotiated
much more quickly than any other option on the table. Crucially the EU
have already said that they would be happy to negotiate a Common Market
2.0 Brexit deal.

In addition to avoiding the backstop, Common Market 2.0 would allow us to

make trade deals with the rest of the world. Although it is true that initially
we would apply the EU’s common external tariff, a Common Market 2.0 deal
makes an agreement on alternative arrangements much more likely, which
would allow us to make these new trade deals around the world. This is
because membership of the Single Market will eliminate the need for most
checks at the Irish border as our regulations will be identical or equivalent.

Membership of the Single Market is also the best way to protect workers
rights and ensure that high standards are maintained. Common Market 2.0
through membership of the Single Market guarantees that workers rights
and standards are locked in, ensuring that there cannot be a race to the
bottom that would hurt workers up and down the country.

Common Market 2.0 is a well-defined relationship which the EU have

already said that they are prepared to accept. It can both avoid the
backstop and deliver the future relationship by the end of 2020, thereby
delivering on the Brexit referendum to leave the political institutions and
take back control.

16