Leaving the European Union offers “real opportunities” for the UK – as long as it is outside the Single Market – according to former Bank of England governor Mervyn King.
Lord King also said the UK should be more “self-confident” in its approach to leaving, while saying that immigration controls were non-negotiable.
“There are many opportunities and I think we should look at it in a much more self-confident way than either side is approaching it at present,” he said in an interview with the BBC.
King, who was publicly ambivalent before the Brexit vote, dismissed calls for the UK to stay in the EU’s Single Market, saying it would limit the UK’s freedom to negotiate new trade deals.
He said: “I don’t think it makes sense for us to pretend that we should remain in the Single Market and I think there are real question marks about whether it makes sense to stay in the customs union.”
Continued membership of the Single Market is one of the top priorities for many businesses – including financial services firms – who rely on friction-free access to EU clients. However, EU diplomats have been clear that there will be no weakening of the four “pillars” of the Single Market, which includes freedom of movement.
Restricting freedom of movement was a major part of debate during the referendum campaign, with some polls showing it among the two most important issues for Leave voters. Migration into the UK is currently at its highest levels ever, although much of that increase relates to immigrants from around the world as well as the EU.
The UK’s referendum result means immigration controls are “not negotiable”, says King, who expects the government to set out a clear immigration policy before entering talks with the EU.
King also pointed to the chance to redesign agricultural subsidies, to forge a new relationship with the Republic of Ireland, and to pursue trading opportunities outside of the “rather unsuccessful European Union”.
This lack of success comes down to the EU’s “two existential problems”, he said: monetary union and the effects of mass migration.
“I don’t think they have answers to either of those issues,” said King. While central bankers have helped the Eurozone to slowly recover, they have run out of options to stimulate recovery in the face of continuing economic weakness.
“Words, in the end, run out; you need to back it up by actions,” he said.