Will Holloway: The challenges awaiting Ministers and MPs as Parliament returns today

11 Jan

Will Holloway is the Deputy Director of the think tank Onward and a former Special Adviser.

This is not the New Year reset that the Government was hoping for. Parliament has returned not to slowing transmission and a gradual reopening of the economy, but to the worst elements of last year: a lockdown, surging infection rates and all the hardship both entail.

But as easy as it is to be depressed with the new start of term, we should recognise that we are entering the final furlong of this crisis. And now that Brexit negotiations will no longer absorb political oxygen, the Government has an opportunity to push ahead not just with vaccinations, but with delivering the promises made on doorsteps in 2019.

As the final months of 2020 have demonstrated, progress can be made at speed. Trade deals are renowned for taking years to negotiate – take for example, the EU-Canada trade deal that took seven years – but the recently agreed EU/UK agreement that covers everything from security to energy bucked the trend, and was finalised in less than a year. 

Even though it can sometimes take more than a decade to develop a new drug, vaccines for Covid were developed within the year. The UK is now fourth globally for doses of vaccine administered per 100 people. We have access to more than 350 million vaccine doses through a range of companies – the first of which have been approved by the independent regulator. Subsequent candidates will be submitted for approval in the near future.

Taken together, this means that enough vaccines have been procured to protect the whole of the UK population several times over. We have been fast to act while other European countries trail behind. Despite not having a major diagnostics manufacturing base in the UK, and at a time when countries around the world were competing for the same products, hundreds of thousands of Covid tests are now conducted every day.

Indeed, since the onset of the pandemic, less than a year ago, over 55 million tests have been carried out, and the UK is now testing more than any other advanced economy per 1,000 people.These are achievements that many would have regarded as impossible at the onset of the pandemic, and show what can be achieved with focus, resolve and urgency. It should be a lesson for the rest of the Parliament.

Already, we are a quarter of the way through this term and time is quickly running away. This year could be make or break for the Government’s new voter coalition. Not only will this year hold the first major test internationally of what the Government stands for globally post-Brexit, with the UK chairing the G7 and hosting of the COP26 climate summit, but it could face its first electoral test since the general election.

Should the elections go ahead, even if later in the year, the campaigns will inevitably be different, but the impact will be no less significant. While commentators are likely to focus on the Scottish Parliamentary elections, and the subsequent implications that they will have for the future of the Union, as well as the London mayoral elections, the results elsewhere may prove to be more of a bellwether for the behaviour of the 2019 general election coalition of Conservative voters.

As Onward’s landmark research before the election and a year on from it showed, the Prime Minister has a historic opportunity to build a new, lasting support base. The research found that Conservative voters – both “southern” and “Red Wall” conservatives – are more likely on balance to lean to the left, albeit marginally, on the economy and to the right on socio-economic issues.

Those who backed the Conservatives at the last general election are economically more interventionist, on balance supporting more regulation rather than less, as well as efforts to retrain workers, while at the same time backing a tough approach to crime and immigration.

With record levels of police recruitment, the launch of the Lifetime Skills Guarantee enabling adults to benefit from hundreds of fully-funded courses, and one of the biggest efforts to protect jobs and livelihoods in peacetime history, the government has a strong record of delivery on voters’ priorities.

But the biggest outstanding promise lies ahead. With Brexit done, the Prime Minister said that the Government’s focus will be to “level up and spread opportunity across the country”. A mission not without challenge, given the recent poll results to suggest that a third of voters had never heard of levelling up.

But terminology aside, increasing opportunities in communities that have for years seen prospects fail to be recognised is one of the great prizes available to the Government. To sustainably and successfully achieve that aim requires bold thinking and ruthless focus. We need to look ahead of the curve.

For example, Onward’s new research on Net Zero found that up to 10 million jobs may be affected as a result of the drive towards decarbonisation over the next 29 years, and the need to plan for and support the shift.  We need to ask challenging questions: what impact do taxes have on different parts of the country? How can innovation be spread beyond the London-Oxford-Cambridge triangle?  And now that we have left the European Union, how can the UK attract more foreign direct investment outside of the usual areas?

Success will involve bending every area of policy to achieve the objective. It is by no means assured. With an unforeseen global pandemic throwing a spanner into the machinery of government, combined with commitments for new infrastructure projects and legislative changes that will take time to come into effect, the pressure is on.

And the stakes are high. It is instructive that only a 4.3 per cent swing to Labour would be needed to generate a hung parliament in 2024. Anything more could deliver an SNP-Labour coalition.  Failure to deliver in the next 12 months may result in the loss of the majority in Parliament, and a return to the stasis and acrimony that succeeded the 2017 result. Success will mean a lasting change, a political realignment across the country, and a consolidated base of support for the future.

Andrew Rosindell: How close we came to waking up in the backstop

8 Jan

Andrew Rosindell is the MP for Romford.

How close we came to waking up on January 1 trapped in the backstop. That misery would have been quickly overtaken by the new national lockdown announced on Monday night. But this would in no way have diminished in the longer-term the ramifications of being trapped in a customs union with no way out.

To the true Brexiteers, the sensible outcome to the Brexit process was always a Canada-style free trade agreement which took back control of our laws, money, borders and waters, while still allowing both the UK and the EU to trade together as equal partners on mutually-beneficial terms.

Unfortunately the EU spent the next few years in a desperate and arrogant attempt to punish our nation for the Brexit vote. It tried to trap our nation in a customs union, demanded tens of billions in exit fees, demanded a continuing role for its courts in UK affairs and made blood-curdling threats of economic punishment.

In a way it showed self-awareness. Because it is only with threats and traps – much in the fashion of the Chinese Communist regime (with whom the EU is now engaging in a nauseating romance) – does EU membership become preferable to the freedom of being a sovereign, independent nation.

All told, the EU generally appeared aghast at the affirmations by the British people of their democratic right to decide their future. To me this demonstrated that the only way out was a completely clean break: to walk away, for good if necessary.

It is why I and my Spartan colleagues voted on three separate occasions against Theresa May’s Brexit deal. If we hadn’t held out against the pleas of our colleagues, from both the Remain and Brexit wings of the party, then we would have woken up on New Year’s Day trapped in the backstop. What should have been a moment of restored sovereignty would simply be a new future paralysed by the EU’s protectionist trading bloc.

The Prime Minister voted for that deal, at the third attempt. I believe he feared for Brexit if the deal wasn’t passed. Fortunately for him, the Spartans gave Brexit a chance. And once Boris was at the reigns he was always ready to walk away. He realised no deal really is better than a bad deal.

With this strategy he was able to bring before the House of Commons an agreement which facilitates free trade with zero quotas and tariffs, without the UK being part of the Single Market or Customs Union and with no control over us by the European Court of Justice.

It will give us the freedom to chart our own course. It will mean the establishment of freeports and new enterprise zones to turbocharge the regions. It means we can change our VAT policy, for example on home insulation products as my friend and colleague John Redwood has noted.

It means we can revitalise nationally important industries with targeted support, such as shipbuilding. It means we can sign free trade deals with our closest friends and allies in the Commonwealth, and improve economic ties with some of the fastest growing economies.

Liz Truss, the Secretary of State for International Trade, has already negotiated trade deals with 61 countries, including one deal, the UK-Japan FTA which goes beyond the existing EU-Japan agreement, particularly on data and digital matters. The backstop would have precluded much of this.

The new agreement with the EU is not perfect. There are flaws in the deal. The transition period for fisheries is too long, the Northern Ireland protocol threatens to divide our country and I am nervous of the separate deal on Gibraltar, given Spain’s record.

Finally, I was disappointed that our British Overseas Territories and Crown Dependencies did not seem to be fully included. I also share David Davis’s comments on this website, where he highlights how far ahead of the EU we are in many areas of regulation, particularly animal welfare, but also on energy and labour law. Any arbitration panel which rules on deviations from the “level playing field” must recognise that there is no “level playing field” at present. It is the EU undercutting the UK in many ways.

There are problems, then. However, I and my colleagues have come to the conclusion that this is still a good agreement: it restores our sovereignty, avoids temporary disruption of ‘no deal’ and avoids the acrimony which would define UK-EU relations going forward if no agreement had been reached.

There is nothing in the agreement which compromises our sovereignty in the manner of the backstop. Yet where there are flaws, there are fights still to be had. I have demonstrated that I am ready for these battles, as have my fellow Spartans.

For now, let’s celebrate the restoration of sovereignty to these islands and move onto the next challenge: getting the country vaccinated, lifting these Covid-19 restrictions, and revving up the UK economy for a new, better, more prosperous and, I hope, a more united decade.

Stephen Booth: This trade deal delivers both the UK and the EU’s main objectives. It gives us freedom – which comes at a price.

29 Dec

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

Much of the analysis of the UK-EU Trade and Cooperation Agreement will flow from underlying prejudices. “The UK shouldn’t have left”, “we don’t need a trade deal with the EU”, “the UK should have or could have asked for X or Y”. It is, however, more instructive to assess the deal against the Government’s stated aims and, for that matter, what the EU said it wanted.

Brexit will have economic and geopolitical consequences. But, ultimately, it is a constitutional question for both Brexiteers and Brussels. In the foreword to the UK explainer, the Prime Minister cites “restoring national sovereignty” as the “central purpose of leaving the EU”.

Meanwhile, the EU’s brochure is quick to stress that, even under the new agreement, the UK will lose the benefits of membership. “This will recreate barriers to trade in goods and services and to cross-border mobility and exchanges that have not existed for decades,” it says. In other words, freedom comes at a price.

The past year of negotiations has not simply been an exercise in haggling over the price of UK legal independence from the EU system. At times, it seemed Brussels was simply unwilling to recognise this principle as part of a negotiated settlement. The EU had initially demanded dynamic alignment with EU law, enforced via the European Court of Justice (ECJ). And it demanded a continuation of existing EU fishing rights in UK waters, despite the UK’s departure from the Common Fisheries Policy.

A Brexit government with a significant majority could not have accepted such a deal. Nonetheless, convincing the EU to conclude a deal that does recognise the UK as a “sovereign equal” is a significant achievement for the negotiating team led by David Frost. The agreement is based on international law, there is no role for the European Court of Justice (ECJ) and no requirement for the UK to continue following EU law. Under the terms of the Northern Ireland Protocol, ECJ jurisprudence will continue over some issues in the province. Despite this, there has been a calming of Northern Irish tensions over the issue.

As has been noted before, this negotiation was unique, since it was driven by the desire for separation rather than integration. Therefore, any agreement essentially had to do two things. First, establish the new baseline for the UK-EU economic relationship (or the degree of dislocation) and, second, address how further divergence (or convergence) in the future should be managed.

The deal’s main feature is ensuring there are no tariffs or quotas on goods traded between the UK and the EU, where they meet the relevant rules of origin. This is significant because it is the first time that the EU has agreed a zero-tariff, zero-quota deal with any other trading partner (for example, the EU retains a small number of tariffs on Canadian agricultural exports). Certainly, businesses would have liked more time to adjust to the new relationship, but the deal provides important stability for the sectors most vulnerable to a no deal Brexit, such as agriculture, automotive, aerospace and chemicals.

The UK has secured some simplifications for customs formalities and important provisions for haulage, but there will be new frictions on UK-EU trade. For example, the EU refused to reduce the frequency of checks on food imports and has insisted that some products be certified by EU rather than UK testing bodies. The provisions on services are limited. The cost of doing business with the EU will be increased as a result.

There are several issues that could evolve in future. UK professional qualifications will not be recognised at the outset, but there is a mechanism to do so in the future. Arrangements for personal data and financial services remain dependent on unilateral EU decisions, due to be taken next year, which might provide a basis for further cooperation.

On fishing, a delicate balance has been struck. 25 per cent of EU boats’ fishing quota in UK waters by value will be transferred to the UK fleet, over a period of five-and-a-half years. The Government says this will bring the share of the total catch taken in UK waters by UK vessels to around two thirds. After this period, there will be annual talks on the amount EU boats can catch in UK waters (and vice versa). The UK would then have the right to completely withdraw EU access to UK waters. However, in response, the EU could impose tariffs on fish or other goods exports from the UK. These measures would need to be proportionate to the impact of the loss of access and are subject to arbitration. This means that the annual negotiations from 2026 could yet become a difficult political battleground.

The UK probably gave a little more than it would have liked to. However, the amount of fish caught in UK waters by UK vessels will increase, the UK has maintained tariff- and quota-free access to the EU market where much of the UK catch is sold, and the agreement establishes the principle of the UK’s status as an independent coastal state. It is undoubtedly an improvement on the status quo and, at this point, it is not clear the UK has the capacity to catch all the fish available.

The other major contentious issue throughout the negotiations has been the level-playing field. The agreement is a reasonable solution to satisfy the UK’s demand for regulatory independence and address the EU’s concern that future divergence may result in distortions to trade or investment.

The UK has agreed not to lower its existing standards on employment and the environment or use subsidies to unfairly distort trade. Both sides would also have the right to take countermeasures, such as imposing tariffs, if they believe they are being damaged by future changes to subsidy policy, labour and social policy, or climate and environment policy. As such, any dispute would only concern the effects of any changes to UK legislation, rather than whether UK rules are exactly the same as the EU’s.

This “rebalancing mechanism” has the potential to get messy if it is used frequently. However, crucially, any countermeasures are subject to independent arbitration, which means there would need to be solid justification for any EU tariffs in response to UK divergence. Tariffs cannot be used arbitrarily by the EU for leverage over the UK in the future. Ultimately, a race to the bottom on standards was always likely to be a bigger EU concern in theory than in practice. The reality is that the UK is likely to be equally as ambitious as the EU in many of these areas, such as climate change or animal welfare commitments, and perhaps more so.

In summary, this agreement is a considerable political achievement, because it manages to combine independence from the EU’s regulatory system with a high degree of market access (relative to comparable trade agreements, rather than EU membership). At times, this appeared impossible and, therefore, the UK’s strategy has been vindicated.

The deal recognises that the UK-EU relationship will continue to evolve. There could be future disputes but the deal is likely to provide stability for the next five to ten years when the world will no doubt be different again.

It is equally important that the country can move on and devote its energies to the future, both with regards to domestic policy and international relationships beyond Europe.

This is the first of a new series of pieces by Policy Exchange for Conservative Home looking at the various issues that arise from the Brexit trade deal.

Johnson’s quiet shift to a more permissive migration policy

29 Oct

In the run up to last year’s general election, one of Boris Johnson’s most significant promises was to reduce immigration if the Conservatives won a majority. 

He spoke about the Government’s proposed new Australia-style points-based system, saying that “numbers will come down because we’ll be able to control the system”, adding that he felt it was not “right… to have an uncontrolled and unlimited approach”. 

With that being said, some may have been confused last week when the Home Office reduced its £35,8000 minimum salary threshold for migrants wanting to settle in the UK by almost 30 per cent – in a move that should surely boost numbers. 

The threshold was first introduced by Theresa May in 2011 when she was Home Secretary, and had been tasked with reducing net migration to below 100,000 (something that was never achieved, incidentally. Net migration to the UK has not been under that figure since 1997).

Under this Government, however, the net migration target has been abandoned, and now migrants on salaries of £20,480, but with enough points under a new Australian-style immigration system to take on jobs with occupational shortages, will be able to settle in Britain after six years to become citizens. 

The new rules come into effect on December 1, and follow the Home Office’s decision in January this year to scrap the £30,000 minimum salary threshold for people arriving after Brexit. 

Given May’s concern with numbers, the latest policy marks a significant shift for the Conservative Party on immigration, although it has created little noise in the media. Indeed, the change to the salary threshold was only spotted after Oxford University’s Migration Observatory went through a 507-word rule book, leading to accusations that changes to the threshold had “quietly slipped out”. 

So why is it that the Government has chosen to implement this policy? And what does it tell us about the future of immigration in the UK?

There are a number of perspectives you could have on the change of the salary threshold. The first is that it isn’t actually all that unexpected, given that thresholds for post-Brexit work visas were already lowered. 

As Sunder Katwala – Director of British Future – puts it on Twitter, the drop in threshold is “an obvious piece of tidying up”. It means that there won’t be such a big gap between someone’s salary and the increase they need to stay in the UK. It encourages citizenship, above anything else.

The next thing to say is that it gives the Government much more flexibility over skills shortages in the UK. The previous salary thresholds (£30,000 for getting a job and £35,000 to settle) were a blunt instrument to achieve net migration targets. There are lots of skilled workers the Government wants to attract to the UK, whose roles do not meet this salary threshold. The Australian-style system is much more nuanced, allowing the Government to make targetted decisions depending on the needs of the economy. 

The obvious counter argument to this, of course, is that the Government shouldn’t be recruiting from elsewhere; it should be getting UK citizens into jobs where there are shortages, particularly given how quickly unemployment is rising. This has been Donald Trump’s approach in America, who has essentially ground migration and travel to a halt in order to promote domestic employment.  It is also the thrust of Andrew Green’s articles on this site.

Even so, there has to be a degree of realism about the UK’s employment landscape. Take agriculture. Despite big recruitment campaigns to encourage domestic workers, the National Farmers Union revealed that only 11 per cent of seasonal workers in the 2020 were UK residents, and the country needs thousands more to come by next summer. In short, by lowering thresholds, the Government has much more flexibility to fill occupational shortages.

Migration Observatory has called the reduction in the threshold “the final nail in the coffin of the net migration target”, but the other point to bear in mind is that migration isn’t at the levels it once was because of the pandemic. As Katwala suggests on Twitter, the Government has accidentally hit May’s under 100,000 target. He says that from looking at the Office for National Statistics figures, “[N]et migration has almost certainly been negative this year.” 

Recent events, along with the fall in the pound (an unappealing prospect to workers wanting to be here for a few years, save up money and bring it back to their home country) have changed this area, and the Government will strategise accordingly.

And what does all this tell us about Johnson? It shows, at the very least, he has a completely different view on immigration to May, which was clear when he first abandoned net migration targets. He is averse to using numbers in this respect – perhaps viewing them as an arbitrary measure of how successful an immigration system is.

Many will see his latest policy as more evidence that he has been, and will always be, liberal on immigration. Throughout his career this has been apparent. 

During his time as the Mayor of London, for instance, he called for an “earned amnesty” for an estimated 400,000 people living illegally in London. He was particularly keen that they should be able to gain citizenship after years in the city.

More recently, the Government pledged to admit three million Hong Kong residents into the UK following China’s decision to impose new draconian security legislation.

And in September, the Prime Minister reversed a decision made by May (in 2012 – when she was Home Secretary) that forced oversea students to leave four months after they finished their degrees. They will now be able to stay in the UK for two years after graduation.

In losing the thresholds, Johnson is not only better able to make way for his policies on international students and those fleeing Hong Kong, but projecting his personal philosophy; his open attitude to immigration, and his commitment to fairness.

On the latter point, the new policies could be said to be an extension of the “levelling up” agenda, as the Government is creating parity on the requirements for EU and non-EU migrants coming to the UK (the former of which had more leniency under free movement).

Has Johnson fulfilled his pledge to “take back control”? It is a statement he has said repeatedly over the years. But talk to anyone, and it becomes obvious that there is no clear cut view on what he would do with that control if it was gained, as it now has been.

No doubt many voters saw immigration control as a numbers game, others say it is about “control over who comes in” – something afforded under the Australian points system. The Government seems to believe the new system will achieve both. Whatever the case, by all indications it’s a far more sophisticated way of managing UK immigration than salary thresholds.

Stephen Booth: With four months left to get a Brexit deal, state aid is the major stumbling block for the UK and EU.

3 Sep

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

At this delicate stage, predictions of whether the Brexit negotiations will conclude with a trade agreement or not are bound to be no more than guesswork. With only four months until the end of the Brexit transition period, the chances of a UK-EU trade deal being ready for January 1, 2021 are in fifty-fifty territory.

The EU’s “parallelism” policy – blocking progress in one area as long as there isn’t progress elsewhere – means that Michel Barnier is refusing to discuss British proposals on fishing until the UK moves on other issues, including the most difficult of them all: the EU’s desire to establish a “level playing field” for state aid. It could be argued that Brussels’ insistence on solving the difficult issues first prevents rather than permits progress.

Ultimately, fishing is not likely to be the deal-breaker. The eight EU member states with significant fishing fleets will completely lose access to UK waters if there is no deal at all, so cutting a deal is clearly better than the default, even if it falls well short of the desire for “relative stability” for existing EU quotas.

At the start of the summer there were reasons for optimism about a deal. The EU had signalled a willingness to water down its most ambitious demands on fishing and state aid and the UK had acknowledged the EU’s concerns about the overall structure of the agreement.

However, the mood appears to have turned and the last negotiating round yielded very little, according to the readouts from both sides. This week Jean-Yves Le Drian, the French Foreign Minister, cited the “intransigent and frankly unrealistic attitude” of the UK for the lack of progress. Barnier yesterday gave a speech outlining the continued areas of disagreement. Equally, recent media reports suggest the UK is preparing the ground to walk away from the talks if the stalemate continues much longer.

State aid is the major stumbling block. The impasse would appear to be a bigger problem in theory than in practice. UK orthodoxy has seen past governments refrain from major interventions in the economy. According to the European Commission’s “State aid Scoreboard”, the UK spent state aid equivalent to 0.34 per cent of GDP in 2018, compared to an EU average of 0.76 per cent. Meanwhile, France spent 0.79 per cent, slightly above the EU average, and Germany spent a much larger per cent.

The perception in Brussels is that this UK Government is different. David McAllister, the German MEP who chairs the European Parliament’s Brexit committee and who is close to Angela Merkel, has said the “UK’s interest in subsidising sectors”, such as steel and cars, would have “direct consequences for EU industries and jobs if these goods have ‘duty-free, quota-free’ access to the single market”.

This precise fear of the UK turning to a historically continental strategy of promoting “national champions” may be wide of the mark. Nevertheless, it is clear that some members of this Government view industrial policy and strategic investment as important levers at its disposal.

In this area, the devil will be in the detail. In the post-Covid world, it is difficult to predict what will be required of the state and nimbleness may be critical. Therefore, it is understandable that the UK would not want to find itself bound permanently by treaty into the EU state-aid regime, much of which is “temporarily” suspended in any case due to the pressures of the crisis on national and regional governments.

Little headway appears likely until the UK sets out its blueprint for domestic state subsidy control, which is expected to be later this month. At a minimum, the UK will need to comply with WTO rules, but these fall far short of the requirements of the current EU regime.

WTO rules only apply to goods, while the EU rules apply to both goods and services. The EU rules are prescriptive in what and what is not permitted, whereas, in practice, WTO rules set a high threshold because complainant countries must demonstrate that disputed aid is harmful in its effect.

The EU appears to have walked back from its initial position – clearly unacceptable to the Government – that the UK should continue to be bound by EU state aid rules into the future, with the European Court of Justice (ECJ) having the final say in respect of enforcement. In contrast, the EU’s agreement with Canada simply uses the WTO model as a basis and expands it to services, but there are limited options for enforcement.

A possible compromise would be for the UK to implement domestic legislation, adopting some aspects of the status quo, enforced by an independent UK authority and subject to review by Parliament and the UK courts (not the ECJ). Subject to dispute settlement, set out in the UK-EU trade agreement, the EU (and the UK) would retain the right to adopt countermeasures, such as tariffs, against any state aid deemed to be trade-distorting.

Whether this would be acceptable to the EU remains to be seen. The essential objective from the UK’s perspective is to depart from the EU’s desire to micromanage the UK’s subsidy policy by treaty. However, the UK would need to accept the principle that the EU could deal with the consequences of UK subsidies with countermeasures such as retaliatory tariffs.

A bust up in September or October does not necessarily preclude a deal at the last minute. Weighed against these important, yet technocratic considerations, is the prospect of no agreement at all.

A trade agreement, with no tariffs on UK-EU trade and regulatory cooperation, would better enable the UK to implement the Northern Ireland Protocol in the light-touch way the Government has outlined.

Any disruption attributed to a no deal exit, however transient, would give Keir Starmer ammunition in his continued attack on Government competence. Against this, the Government is in a much stronger position than it was in the autumn of 2019 when renegotiating the Withdrawal Agreement.

Failure would have economic and geopolitical consequences for the EU too. The UK may only be Germany’s seventh largest trade partner, but it ranks second in contributing to Germany’s trade surplus.

It is notable that Tom Tugendhat MP has on this site recently called for the UK to break with EU policy on Iran to adopt an approach closer to the United States. In the event of a breakdown in the trade relationship, Brussels should not be surprised to encounter a more muscularly independent UK in other fields.

We are now approaching the end game. The technical negotiations have probably achieved as much as they can at this stage. It will soon be up to the politicians on both sides of the table to make the big call about whether to make the deal or not.

Jonathan Djanogly: Parliament should be able to scrutinise new trade deals properly. But the current arrangements are simply unfit for purpose.

29 Jun

Jonathan Djanogly is a former Minister, and is MP for Huntingdon.

Did we come through the Brexit process only for the UK Parliament to have less scrutiny over new free trade agreements than we had during our membership of the European Union?

This is the question that Parliament is going to have to address through the Trade Bill, currently making its way to report stage in the House of Commons.

In fact, it seems to be surprising most people that, seemingly contrary to what was proposed in the Queen’s Speech, the Trade Bill does not actually address future trade agreements at all.

Rather, it provides a low scrutiny mechanism, using Statutory Instruments (SIs), for existing EU free trade agreements (FTAs) to be ‘rolled over’ to the U.K. However, given that we have left the EU, it can be questioned as to whether any EU deals with such third countries should now be dealt with as new trade agreements.

For instance, the U.K /Japan proposed FTA is now being treated as a new agreement, and will not replicate the FTA that the EU agreed with it. Likewise, countries such as Canada seem to be waiting to see what the EU agrees with the UK, before agreeing their own new deals with the UK.

In effect, it is arguable that the Bill, which was perfectly rational when its second reading was initially heard in January 2018, may now simply have missed the boat, in terms of the future relevancy of EU trade deals that we have thus far failed to adopt.

It is also somewhat annoying, to those of us that have been following the generation of this bill for the last three or more years, that most of the sensible amendments offered by the then Secretary of State, Liam Fox, have not been re-incorporated into the current bill now before the House.

Agreement that the SI regime should only last for three years rather than five, and that the Government should have to produce reports for Parliament to explain their proposals at least 10 days before the SIs are heard, are surely not contentious. Accordingly, I have re-tabled the last Government’s own amendments for debate.

There then arises the question as to how we are going to deal with future FTAs with countries and organisations, such as the US, China and the EU. On this the Bill is quiet, despite Fox agreeing to consult on a new scrutiny process in 2018.

For the last 40 odd years, the EU has been negotiating our trade deals. As part of the EU scrutiny process, a vote needs to be taken by the EU Parliament on the draft FTA prior to its signature.

Most other countries have similar approval arrangements. In fact, some go further and allow the legislators to get involved in the provisions of the deal. So, for instance, the U.S. Senate can amend draft trade agreements.

In practice, a parliament holding the threat of a veto means that it is very rarely used. This is because the executive will have good reason to look for consensus on its negotiating mandate, as well as carrying legislators along during negotiations through regular disclosure and discussion.

A wise executive would naturally wish to avoid an unnecessary parliamentary bust up just before signing an FTA. Of course, this is where it all went wrong with the TTIP negotiations between the US – EU. Here, both the US Congress and the EU Parliament were disclosing information to their respective elected representatives, that was not being provided to UK parliamentarians.

As a result, and with the inevitable leaks, the whole debate surrounding thousands of lines of deal negotiations got reduced to accusations of selling the NHS and Brits being forced to eat American chlorinated chicken. One might have thought that the UK government had learnt its lesson from the TTIP experience.

The point to be addressed in the Trade Bill is not whether individual issues, such as food standards, environmental regulations, public services or digital services provision or consultation with the devolved authorities are good or bad things in themselves.

Rather, it is the need for the Bill to provide a statutory framework that requires government to take early stage consultation and ongoing soundings through the course of FTA negotiations. This is in order that business and citizens feel they are being listened to with similar rights to their counterparts in the country with whom we are negotiating. Then, before signing, MPs should get to vote on the deal, as will be the case with the counter-party.

In effect, I would argue that current UK practice on scrutinising trade deals is neither democratic nor practically fit for purpose. Moreover, I would go further to point out that our poor scrutiny process is going to be undermined, in any event, by other countries’ more modern scrutiny practices.

The Government suggest that the Constitutional Reform and Governance Act (CRAG) process, allowing a short delay mechanism before ratification (ie after the signing) of FTAs, is adequate. This is the same CRAG process that was implemented by Labour in 2010 at a time when the U.K. benefited from the EU Parliament veto. By the way it’s also the same process that was described in 2019 by the Lords Constitution Committee as ‘anachronistic and inadequate’.

Secondly, the Government suggests that the Trade Select Committee could be utilised to provide scrutiny for proposed new FTAs. Let us here, firstly, assume that the Trade department and therefore its committee is going to survive a rumoured merger with the Foreign Office. Even so, and despite negotiations with the US and now Japan having already started, no such arrangements with the trade committee have yet been agreed. We know this from an on the record June letter sent from the chair of the committee to Truss.

Of course, the Trade Committee will not have jurisdiction to look at the proposed EU FTA and, following the post- Brexit demise of Bill Cash’s European Standing Committee B, it has not yet been made clear who or how any proposed EU deal will be scrutinised.

I am not suggesting that MPs should be able to impede Government negotiations on FTA’s, and nor am I saying that MPs should be able to amend draft FTAs. However, we need legislation that provides for Parliament to approve FTAs, on a yes or no basis, before they are signed. I have tabled an amendment to the Trade Bill to that effect, and I look forward to the debate.