02 January 2024

UkandEU's Menon:2023 the year Brexit finally receded into the past-perhaps perhaps not

For three and a half long years, politicians and the public argued furiously about Brexit in principle. Now, Brexit in practice has been revealed in all its complexity. Sure, Brexit is no longer the biggest single issue in the minds of the public. In fact, many if not most of them simply want to talk about something else. Its shadow, nevertheless, looms large.

For one thing, it haunts policy debates. The first half of the year saw continued arguments over the government’s Retained EU Law Bill. In a concession to the many businesses that had warned of the consequences of simply sunsetting all EU laws on the statute book, the government canned the proposal, instead announcing that around 600 – almost entirely redundant – laws would be revoked at the end this year. Addressing the European Scrutiny Committee, Kemi Badenoch declared “It is not the bonfire of regulations – we are not arsonists.”

This was not an isolated retreat but, rather, formed part of a larger trend towards a more pragmatic approach. The government delayed – again – the imposition of checks on food products from the European Union. It also scrapped the requirement that manufactured goods bear a ‘UKCA’ mark, rather than an EU ‘CE’ mark.

As Joël Reland has convincingly argued, both major parties now largely reject the idea of divergence. Yet, while the UK government seems to have decided that divergence for its own sake is not a credible policy, that still leaves the question as to how the UK reacts when the EU amends its own regulatory framework. An important test case will be carbon taxes.

While the UK recently announced that it would mirror the EU’s Carbon Border Adjustment Mechanism, it has postponed discussion as to whether to legally link its carbon market to that of the EU. The latter is what industry needs to really avoid friction, and responsibility for ultimate decision looks like a gift to the next government from the current one.

More broadly, for many in the Conservative Party, the whole point of Brexit was to allow the UK to flex its independent regulatory muscles. Absent that, there is a real question as to what Brexit is actually for. The search will continue next year for regulatory opportunities where the UK can benefit from its relative nimbleness as a single state while avoiding excessive divergence from EU regulations.

And then there is the wider relationship. Much has been made of the improved ‘mood music’ resulting from the signing of the Windsor Framework in February. And that did open the way (eventually) for UK participation in the EU’s Horizon research programme. Nonetheless, real issues lie ahead.

For many, including the Labour Party, the relationship with the EU bequeathed under the Trade and Cooperation Agreement is unsatisfactorily thin. 2023 saw Labour make a number of proposals aimed at beefing it up – on SPS standards, mobility arrangements, and mutual recognition of qualifications. They have in common being both more difficult to negotiate than the opposition front bench seems to realise, and rather trivial in aggregate economic terms...

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