Britain’s decision to leave the European Union will also mean leaving the EU single market, one of Prime Minister Theresa May’s cabinet ministers said on Thursday.
“If we are leaving the EU, we are leaving the single market,” Secretary of State for Scotland David Mundell told Scottish lawmakers at a special hearing on the implications of Britain’s vote to leave the European Union.
He went on to say that he believed Britain could retain tariff- and barrier-free access to the single market.
The implications of Britain’s EU exit for its access to the bloc’s 500 million-consumer single market remain unclear.
Businesses and financial markets believe that if Britain loses unfettered access to the single market the economy will suffer, and such fears have sent the pound sharply lower.
Mundell told a devolved Scottish parliamentary committee that Britain’s future relationship with the EU would not replicate current structures.
His comments touch upon one of the biggest unknowns thrown up by the June EU referendum – what type of trading relationship does Britain want with its biggest economic partner?
Mundell has a seat at May’s cabinet table but is not considered one of her closest advisers.
Asked whether Mundell’s comments were government policy, PM May’s spokesman said: “We haven’t started the process of exiting the EU yet … clearly we will then engage in a process of negotiation with the EU and issues like that will form part of that dialogue.
“What we’re trying to get here is the best possible arrangement for trade and operation within Europe across business in goods and services.”
May has indicated that she wants a bespoke deal that allows Britain to end free entry of EU nationals into the country – a demand which is widely seen by other EU states as scuppering the possibility of full access to the single market.
The prime minister told parliament this week that access to the single market was important, without saying what form that access would take.
“I have been clear … (about) the importance that we place on being able not just to trade with but to operate within the European market, and that is for both goods and services,” she said.
The centuries-old union between England and Scotland has been strained by the result of the June referendum because Scotland voted to stay in the EU while England voted to leave.
Nicola Sturgeon, the head of Scotland’s devolved government, has called for a “coalition” across Britain in support of single market membership, and said that if Scotland’s links to the EU are not maintained as part of a Brexit deal, then another referendum on Scottish independence is an option.
Mundell did not answer a question on whether he still supported Britain remaining in the single market, replying that he was committed to achieving the best possible deal by getting Scotland to work together with London.