21 December 2022

Institute for Government's Rutter: The UK can't improve its Brexit deal without EU agreement

Keir Starmer wants to make Brexit work. Jeremy Hunt thinks trade barriers can be dismantled over time. The prime minister says he can sort the Northern Ireland protocol by Easter – though it is still unclear how, with the latest agreement over veterinary medicines just seeming to kick long-term solutions further down the road. Tony Blair’s institute has set out suggestions on an incremental approach to improving the relationship. Former EU official Andrew Duff is the most recent to propose a vision of a new bespoke UK-EU relationship, creating a new category of “affiliate member”.   

But it is far from clear that the EU shares this resurgence of interest in its post-Brexit relationship with the UK, with a welter of its own issues – Ukraine, energy, trade relations with the US and continuing internal problems – to deal with. So what are the prospects for a reset?  

The UK government could unilaterally undo some self-inflicted harms  

Some UK government decisions that have made things harder for UK-based businesses can be reversed unilaterally. For example, the UK government could allow schoolchildren to cross the border without a passport, reversing a requirement which has killed the school exchange business. It could also relieve some labour market shortages by unilaterally introducing a generous youth mobility scheme and expanding the agricultural workers scheme.  

It is domestic politics alone that dictate whether it takes those options.  

The UK could avoid future own goals 

The government could remove the risk of ill-thought through or accidental divergence by dropping the flawed Retained EU Law (Revocation and Reform) Bill – which sunsets all secondary retained EU law at the end of 2023 unless ministers act to save or reform it or extend the deadline. It could also ensure that it does not escalate the arguments over the Northern Ireland protocol to a point where the EU feels obliged to retaliate. Similarly, the government could make sure that any “positive divergence” from EU rules is confined to cases where there is a clear net benefit to the UK economy.  

None of these harm-reducing decisions can be taken for granted. For all chancellor Jeremy Hunt’s words about reducing barriers, the government still seems to be moving in the opposite direction. 

The government could unilaterally align with significant future EU moves 

The government has already made some sensible moves to reduce unnecessary burdens on UK businesses. Business secretary Grant Shapps has announced delays to the introduction of the UKCA mark, giving business more time to continue using the EU mark – a move justified by the need to avoid extra costs at a time of economic fragility. 

The UK government could also allow goods that meet EU standards to circulate here alongside ones made to UK standards – or update UK standards in line with EU changes. That would be of benefit to EU exporters and would relieve UK exporters of the need to meet different sets of standards for the EU and Northern Ireland.  

The problem is that keeping up with the sheer volume of changes in the EU may be hard and would require primary legislation – an unattractive prospect for the Sunak government, which is already having to deal with organised resistance from the backbenches across a range of issues.  

Ministers could use mechanisms that already exist inside the Trade and Cooperation Agreement  

If the thawing of relations which some detect goes further, the UK could try to make more of the mechanisms it has already agreed in order to make progress. One example would be to try to get further towards the UK and EU recognising each other’s professional qualifications. The EU rebuffed the UK’s ask of automatic mutual recognition during the trade negotiations, so there is no guarantee of success – but at least this would not require the EU to seek a new mandate for negotiations.  

There are also areas where the UK can build good will by cooperating outside the TCA – action on Ukraine and energy cooperation are notable cases in point. But such moves will not reduce barriers to UK trade with the EU.

Institute for Government

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