Labour's Post-Brexit Agenda
On Monday, Keir Starmer announced Labour’s strategy for improving the post-Brexit business environment. This is based on a 5-point plan to:
• Sort out the Northern Ireland Protocol
• Tear down unnecessary trade barriers
• Seek a mutual agreement on professional qualifications
• Keep Britain safe with a security agreement
• Invest in Britain
Labour have been very clear about the fact they do not want the UK to re-join the EU. Starmer has promised that instead of revisiting old divisions and opening old arguments, Labour is offering a plan to “make Brexit work”.
The first and perhaps most intricate problem is the Northern Ireland Protocol. The UK and EU have found themselves locked in a stalemate scenario, with the UK arguing that the Protocol simply isn’t working for businesses, and the EU being unwilling to negotiate the government’s proposals for a solution.
Currently there is a Bill being pushed through parliament that will allow the government to change those parts of the Protocol that are proving the most difficult for the UK, for example customs processes and inflexible regulation. The Bill has so far survived its first two parliamentary readings, and will now enter the committee stage.
Labour’s proposals include a commitment to a veterinary deal with the EU that will remove checks on agri-products, and work up a trusted trader programme for all other goods that would reduce paperwork at the border.
Businesses have been tackling a range of checks on goods travelling over the border, and have therefore welcomed grace periods on health checks for agri-products, and products of animal origin. A veterinary agreement could remove many of the Sanitary and Phytosanitary (SPS) requirements on these types of higher risk goods.
Starmer said he recognises that the trading relationship with the EU has been extremely challenging for businesses over the last few years, and hopes this veterinary agreement would remove some of the frictions.
Trade barriers between the EU and UK don’t stop at SPS checks though. IoD data tells us businesses have particularly found general customs changes, mobility arrangements that allow freedom of movement between the EU and UK, and non-tariff barriers such as labelling requirements and technical standards, to be the most challenging obstacles to trade with the EU.
Step three of Starmer’s 5-point plan is to ensure an agreement on professional qualifications. This would particularly help British service providers conduct business and compete in Europe. The Trade and Cooperation Agreement (TCA), which came into force on 1st January 2021 and governs the relationship between the UK and the EU, has a provision for further discussion on professional qualifications.
EU leaders are concerned that British lawyers, architects and accountants would snaffle up all the business in Europe, and so this proposal would likely be met with resistance.
Starmer’s fourth priority is to agree a security pact with the EU, out of concerns that a lack of trust between the EU and UK is impacting UK border security. This would allow the UK to share data, intelligence, and best practices in the face of cybercrime, terrorism, and organised crime.
Labour’s promise to use post-Brexit policy to raise investment in Britain is not too dissimilar from the government’s ‘Brexit Opportunities’ piece. While embracing global trade outside the EU, Starmer would take advantage of the UK’s ability to shape its own regulation based on the needs of the British people, for example diverging from EU regulation on insurance, and cutting VAT on energy bills.
Many of Starmer’s commitments seems to be based on the government’s current approach to making Britain work after Brexit. Supporting international trade while moving forwards with post-Brexit regulatory opportunities underpins much of the Conservative’s trade policy at the moment.
Many argue that the government’s hard-Brexit policy has been a huge contributing factor to the economic difficulties businesses face now, and evidence the weak recovery of UK exports coming out of the pandemic. But in spite of this, Starmer has ruled out the UK re-joining the EU.
Of course, while the Conservatives remain in government, this strategy is purely academic. It could be argued that aligning this post-Brexit approach to the pro-leave ‘red wall’ sentiment is quite a tactical move. But IoD surveys continue to highlight the trading relationship with the EU as a business priority. So we urge the new leader of our country, whomever that may be, to take the political out of the dispute, and put businesses at the top of the post-Brexit agenda in order to boost exports, and make trade across the Channel as seamless as possible.