The Single Market gives UK businesses access to the world’s largest trading bloc with 500 million people and 21 million companies generating £11 trillion in economic activity.
Since 1992, the UK’s bilateral trade with EU member states has more than trebled and trade with Europe accounts for roughly 3.5m jobs in the UK, around 11% of the workforce.
Growth and job creation depend on healthy, well-connected markets, where competition and consumer access stimulate business and innovation. By reducing barriers to trade between the EU and other dynamic markets, such as the USA, the UK’s trade and exports will increase.
The UK’s prospects are closely tied to the prosperity of the EU as a whole. To achieve higher growth and increased employment, all member states and the EU institutions will need to take action. The UK therefore welcomed the November 2012 European Commission’s Annual Growth Survey which rightly focused on fiscal consolidation, promoting economic growth and employment. The Government supports the Commission’s continued focus on growth-friendly fiscal consolidation across the EU and the Commission’s focus on EU-level structural reforms, including the improving reforms to the Single Market in services and energy.
The government believes that a strong single market creates jobs and benefits all member states. Trade between EU countries has risen from €800bn in 1992 to €2,800bn in 2012 for value of goods exchanged.
In his speech on the EU (January 2013), the Prime Minister called for further action to complete the single market in services, digital and energy, trade deals with the world’s largest economies and less regulation.
The UK has the largest economy for services in Europe. Evidence suggests that a free market in services could increase current trade by a ratio of 3 to 5, while better implementation of the Services Directive could result in a 2.6% increase in GDP.
The UK is Europe’s largest and most advanced e-commerce market. The per capita, per annum spend on e-commerce in the UK is the highest anywhere in the world.
The European Policy Centre has found that development of the Digital Single Market by 2020 could result in a 4% increase in GDP in the EU. The Digital Agenda will update EU single market rules by boosting the music download business, establishing a single area for online payments, and further protecting EU consumers when they purchase goods and services online.
The EU needs a single market in energy that is integrated, efficient and flexible in order to make the transition to a low-carbon economy and maintain secure supplies at the lowest cost. Without major changes, the EU will be faced with a less reliable and more costly energy system, and declining EU competitiveness and wealth. Investment in our energy infrastructure is a key economic opportunity for the UK and is a critical part of the Government’s economic strategy. We believe that the same principles apply to Europe.
On trade, Negotiations on the Transatlantic Trade and Investment Partnership, the EU/US FTA agreement, were launched at the G8 Summit in Lough Erne on 17 June 2013. When completed, the deal could add could add as much as £100 billion to the EU economy.
With a significant proportion of regulatory burdens faced by businesses originating in Brussels, the EU must keep to the commitments that it has made to cut red tape, particularly for SMEs.
The Single Market also cuts costs for business. On 19 February 2013 participating Member States signed a treaty to establish a Unified Patent Court. Once up and running in 2015, the Unified Patent Court and associated unitary patent will allow businesses to protect and defend their innovations across all participating member states through a single patent application. It should save British and other European businesses up to £20,000 per patent in translation costs alone.
The Single Market Act (2011) sets out twelve ways to boost growth and improve confidence in European business. In October 2012 the European Commission proposed a second set of actions, the Single Market Act II, to further develop the single market’s economic opportunities.
The Single Market Act II (2012) describes the EU’s goals of improving the digital economy, including e-commerce and electronic invoicing, and creating more efficient transport and energy networks.
The UK government’s response to The Single Market Act in February 2011 looks at how the UK will work with other member states on reforms that will create the most jobs and economic growth at the lowest cost.
The Department for Business, Innovation & Skills (BIS) published a study, The economic consequences for the UK and the EU of completing the single market, in February 2011. This paper considers the benefits of the single market and the negative effects of the UK opting out of future European trade agreements.
BIS published a study in 2011, The UK and the single market: trade and investment analytical papers topic 4 of 18, that examines the importance of the EU for British exporters and investors. The analysis found that businesses have benefited from the opportunities provided by the single market. Such benefits include: better connected and cheaper networks; mutual recognition of standards; and easier access to cheap and competitive inputs for British manufacturers. In addition greater competition within the single market has fostered innovation. For consumers, the single market has created more choice and lowered prices.
In October 2012 BIS published an eBook which contained a set of analytical papers which draw together evidence about the impact the single market has had to date. Also establishes where the priorities should be going forward. These include opening up services markets, progress on the digital single market, liberalisation of key infrastructure networks, and a better regulatory environment.