On June 30, a week after the British public voted to leave the EU, Theresa May gave a speech launching her candidacy for prime minister in which she declared, “Brexit means Brexit.” Her message was straightforward: even though she herself had supported remaining in the EU, she would not hesitate to implement the will of the voters. Yet months after assuming office, May has yet to answer crucial questions about what a British exit, or Brexit, would mean for trade, immigration, and financial services. It is still not at all obvious what Brexit will actually look like.
That’s because the referendum has confronted the government with two distinct but related problems: how to leave the EU as painlessly as possible and how to reverse the years of economic neglect that have divided the country. Solving each will require hard choices, and whatever the politicians decide, some of their supporters will feel let down. With this in mind, they should prioritize prosperity over politics and defy radicals on both sides of the debate. Simply ignoring the referendum result would be politically untenable. But abruptly abandoning the single market, which guarantees the free movement of goods, services, and people, would cause widespread economic hardship.
The best path forward, then, is to strike a temporary deal to keep the United Kingdom in the single market—a deal similar to that which Norway enjoys. Such an arrangement would remove uncertainty among businesses over the United Kingdom’s future relations with its biggest trade and investment partner and would buy time to work out a permanent settlement. Assuming it can be sold politically at home, such an interim solution should also prove palatable to the EU.
But trade policy can achieve only so much. In order to respond to the grievances that led to the Brexit vote in the first place, the British government also needs to take big and immediate steps to restore economic equality and raise the country’s potential for future growth. To
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