PM urged to be ‘honest with the British people’ as recording from before EU referendum reveals her fears about Brexit
Theresa May has been criticised for refusing to prioritise membership of the single market when Britain leaves the EU after the emergence of a leaked tape from before the referendum in which she warned companies would leave if the UK pulls out.
“I think the economic arguments are clear,” she said. “I think being part of a 500 million trading bloc is significant for us,” said May, adding that membership of the union also made the UK a safer place.
Opposition politicians said her comments to Goldman Sachs bankers, made a month before the poll in June, showed May really believed the UK was better off in the single market, even though she has signalled controls on immigration are the most important thing to secure from a Brexit deal with the EU.
EU leaders have repeatedly said the UK cannot stay in the single market if it wants to end freedom of movement for EU citizens.
Keir Starmer, the shadow Brexit secretary, tweeted:
Before referendum PM says access to 500m strong trading bloc essential; now won’t make economy & jobs the priority! https://t.co/EaqRLxd59F
— Keir Starmer (@Keir_Starmer) October 25, 2016
His colleague, Andrew Gwynne, the shadow minister without portfolio, added: “As if we needed it, this recording is cast-iron evidence of how Theresa May and other senior Tories have been saying one thing in private about the economic impact of Brexit and another in the comfort of Tory conference halls.
“It’s plain that she recognises what a disaster it would be for Britain to lose access to the single market, so why doesn’t she be honest with the British people and say how she plans to retain it?”
Tim Farron, the Lib Dem leader, said it was “disappointing that Theresa May lacked the political courage to warn the public as she did a bunch of bankers in private about the devastating economic effects of Brexit”.
He added: “More disappointing is that now she is supposedly in charge, she is blithely ignoring her own warnings and is prepared to inflict an act of monumental self-harm on the UK economy by pulling Britain out of the single market.”
Phil Wilson, an MP speaking for the Open Britain group campaigning for the UK to stay in the single market, added: “It’s good to know that privately Theresa May thinks what many of us have been saying publicly for a long time – leaving the single market would be bad for businesses and for our economy.
“Now she is prime minister, Theresa May is in an unrivalled position to act on her previous concerns – starting by putting membership of the single market at the heart of her government’s negotiating position.”
The news comes as a thinktank warns that the worsening economic outlook could leave the chancellor facing an £84bn black hole when he lays out the government’s spending plans next month. The Resolution Foundation warned Philip Hammond that lower tax receipts and higher spending following the Brexit vote would leave the Treasury with a shortfall every year until 2020-21.
Speaking on 26 May, the then home secretary appeared to go further than her public remarks to explain more clearly the economic benefits of staying in the EU. She told staff it was time the UK took a lead in Europe, and that she hoped voters would look to the future rather than the past.
In an hour-long session before the City bankers, she also worried about the effect of Brexit on the British economy.
She said: “If we were not in Europe, I think there would be firms and companies who would be looking to say: do they need to develop a mainland Europepresence rather than a UK presence? So I think there are definite benefits for us in economic terms.”
Her warning about the importance of the UK’s membership of the EU comes in marked contrast to her positioning in recent weeks.
May said at the Conservative party conference that she wanted to prioritise reducing immigration over being part of the single market. In her speech, she said British companies needed the “maximum freedom to trade and operate in the single market” but not at the expense of “giving up control of immigration again” or accepting the jurisdiction of judges in Luxembourg.
At Goldman Sachs, May also said she was convinced Britain’s security was best served by remaining in Europe because of tools such as the European arrest warrant and information-sharing between the police and intelligence agencies.
“There are definitely things we can do as members of the European Union that I think keep us more safe,” she said.
The disclosures could prove embarrassing for the prime minister, who faced criticism for lying low during the referendum campaign and offering only lukewarm support for the remain side.
In April, May gave a speech in which she set out some of the reasons for staying in the EU, warning that it could have an impact on the development of the single market for the rest of the EU if the UK left. But her comments at the Goldman Sachs event a month later go further in warning about the dangers to the British economy from businesses relocating to continental Europe.
During the referendum campaign, May infuriated senior Conservative colleagues on the remain side by largely staying out of the day-to-day arguments in favour of staying in the EU. One of her major pro-remain interventions was overshadowed by an announcement that she would like to take the UK out of the European convention on human rights, which she quickly ditched when running for the party leadership.
Her refusal to participate much in the campaign led Craig Oliver, David Cameron’s former chief of communications, to wonder if she was secretly an “enemy agent” for the other side. However, others have suggested she believed in the arguments for staying in but was keeping her powder dry in case of a pro-Brexit vote.
Goldman Sachs confirmed May had spoken to staff but was not paid. She accepted an invitation as part of the bank’s Talks@GS programme, in which high achievers from all walks of life are given a chance to reflect on their experiences and answer questions.
Chuka Umunna, the Labour MP and former shadow business secretary, said May was “right then – and it underlines why single market membership should be her ambition now”.
A No 10 spokesman said: “Britain made a clear choice to vote to leave the EU and this government is determined to make a success of the fresh opportunities it presents.
“David Davis made very clear in the House of Commons last week the importance the government places on financial services across the UK in the negotiation to come, as has the chancellor in recent weeks.
“We want a smooth and orderly exit from the European Union, which would be in the interests of both Britain and the EU.”