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How much is Brexit really costing us? The Cost of Brexit

Executive Summary

At Labour Conference, the Prime Minister said he would use the next UK-EU Summit to set out options for our future relationship with the EU. Previous Best for Britain research has made the economic and political case for membership. This report sets out the practical route back: the Article 49 accession process.

Of all the options, the membership process is arguably the most predictable. Twenty-two countries, including the UK, have joined the EU this way. By contrast, only three have negotiated a bespoke Customs Union, and the last to join EFTA (the pathway towards the Single Market) was in 1991. 

Under Article 49, the EU must consider an application from any qualifying European state, an obligation that doesn’t apply to the Customs Union or to the current UK approach of sector-by-sector deals.

Rejoining would not be quick or easy, but claims that it would take a decade are wide off the mark. The UK starts from a strong position: limited regulatory divergence since 2020, closer integration through the UK- EU Summits, and shared values. Finland joined in under three years, so EU membership could be within reach in a single Parliament (under five years).

New members don’t automatically adopt the Euro or join the Schengen Area when they accede, and several existing members remain outside both. The Common Travel Area with Ireland could also strengthen the case for a Schengen opt-out.

Finally, the conversation about new forms of membership has gathered pace since Commission President Ursula von der Leyen invited Canada to become the EU’s first ‘associate member’. There is as yet no legal basis for associate membership, and it is unlikely to be on the table for the UK. 

But it shows flexibility from the EU to think about the form and process of membership. It also shows that strong political will, of the kind that Canada has shown towards the EU, can open up new possibilities. 

The UK should heed that lesson as the conversation about our future relationship with the EU takes shape.

Headline Findings

  1. As a former member state with a high degree of regulatory alignment, the UK could join the EU within a single Parliament from submitting its application. This is based on the precedent that Finland joined in less than three years.
  2. The Common Travel Area, and the UK and EU’s shared commitment to avoid a hard border on the island of Ireland, means it is unlikely that the UK would be required to join the Schengen area, given Ireland continues to have a formal opt-out.
  3. To join the Eurozone, countries must first join Exchange Rate Mechanism II (ERM II). This is optional. Therefore, it is unlikely that the UK would have to adopt the euro: six EU member states do not use the currency (including Denmark who have a formal opt-out).
  4. EU accession is based on a number of criteria: geography; merit; and, most importantly, compliance with EU rules before accession.
  5. It is a structured and rigorous process, with five thresholds that countries must pass through: acquiring candidate status; formal opening of negotiations; formal closing of negotiations; approval and signature of the accession treaty; and treaty ratification.

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