Labour can’t afford to keep dragging its heels on its Brexit reboot

Keir Starmer came to power promising a ‘reset’ in relations between the UK and the European Union – but his refusal to even discuss rejoining the single market or customs union will only make the process trickier, more time-consuming and far less economically useful, says Professor Anand Menon

Prime minister Keir Starmer promised in his party manifesto to improve the relationship with the EU by ‘tearing down unnecessary barriers to trade’ (PA Wire)

Curiouser and curiouser. The new government is proudly trumpeting its desire to bring about a “reset” in relations between the UK and the EU. Yet many of the practical steps it is proposing appear, if not infeasible, then tricky to secure – and, if not that, then of limited economic value. This is a process that will need to be handled sensitively if it is not to end in failure and mutual resentment.

The most obvious evidence of the reset to date has been tonal. The new government has made it clear that it not only prioritises relations with its European partners, but is committed to improving them.

And, of course, tone matters – but not as much as substance. The real test of the government’s new agenda will be its success in securing practical improvements in its relationship with the EU. There are some relatively easy wins to be had, not least in foreign policy on which the Trade and Cooperation Agreement (TCA) that governs UK-EU relations has precious little to say.

However, the problems begin in earnest when it comes to trade. The Labour Party promised, in its manifesto, to improve the relationship with the EU by “tearing down unnecessary barriers to trade”. Its specific objectives are to negotiate a veterinary agreement, to help touring artists, and to agree a mutual recognition agreement for professional qualifications.

This is, to put it mildly, quite a strange choice of objectives. For one thing, and perhaps most importantly, none of these will be easy to achieve. The EU may be willing to negotiate a veterinary agreement, but this is not a given.

As for touring musicians, the UK has already tried and failed to secure concessions on this. Indeed, at the 4 July Partnership Council meeting, the EU statement revealed a certain (diplomatic) tetchiness that the UK was posing the same question again, expecting a different answer: “The EU maintained that this issue has been covered at length on previous occasions.”

There are good economic reasons why the EU might not want to allow UK-based artists to tour freely. Why, after all, would they encourage the New York Philharmonic to base themselves in the UK prior to a tour of the continent?

Yet the real problems are technical. The barriers introduced by Brexit include rules of cabotage – the transportation of goods – covering hauliers, the need for carnets to be secured for any equipment taken,  and the fact artists must secure visas allowing them to work prior to travelling. In other words, the barriers to unrestricted access cut across the single market and the customs union.

From the EU’s perspective, these problems are a logical and unavoidable consequence of the UK’s decision to leave the EU – and of Labour’s refusal to countenance single market or customs union membership.

Grounds for greater optimism exist when it comes to mutual recognition. The TCA provides a framework allowing for the negotiating of deals sector by sector. Yet this won’t be a quick process. It took nine rounds of talks to negotiate a deal with Canada just for architects.

When it comes to negotiations of this sort, political will can sometimes help smooth out some technical wrinkles, yet the signs here are hardly encouraging. Far from welcoming the prospect of a rest, the European Union moved quickly after the election to insist that the UK must fully implement all its obligations relating to Northern Ireland and the rights of EU citizens before any improvement in the relationship could be considered.

Meanwhile, although Brussels has made it clear that it would like to secure an agreement on youth mobility, the new UK government has hardly been encouraging. Last month, when asked in parliament about the possibility of opening talks, the prime minister replied simply, and rather strangely, that “we are not returning to freedom of movement”. The minister for European Union relations, Nick Thomas-Symonds, gave a similar response a few days later. Neither side seems keen to go out of its way to meet the desires of the other. The mood music, in other words, could be better.

Negotiations, then, promise to be tough and not all of them will succeed. And for what? When all is said and done, the economic impact of what is being proposed will be relatively modest. Mutual recognition will make it slightly easier for professionals to ply their trade, but will certainly not remove most of the barriers to services provision imposed by Brexit.

As for a veterinary agreement, the most detailed research finds that this could lead to a 22.5 per cent increase in agri-food exports and a 5.6 per cent increase in imports. Clearly, this should not be sniffed at, not least as such an agreement would help reduce friction on the border between Great Britain and Northern Ireland. That being said, in 2022, agriculture’s contribution to the UK economy (gross value added at basic prices) was £13.9bn, or 0.6 per cent of GDP.

The “reset”, then, will be time-consuming, trickier than many people seem to assume, and of limited economic import. The lattermost point suggests that patience might begin to run out if the two foremost prove to be accurate. Partly, this is because, rather than picking low-hanging fruit, the government seems to have opted for targets that are neither low, nor particularly juicy.

Partly, too, it is because the EU, while obviously delighted to see the change of personnel in Whitehall, will not allow such trivia to alter its narrow, legalistic, negotiating stance.

Alice was so amazed by Wonderland that she “quite forgot how to speak good English”. Now safely ensconced in the doubtless equally weird world of government, Keir Starmer and his colleagues might yet have to rethink elements of their reset.

Professor Anand Menon is director of UK In A Changing Europe (ukandeu.ac.uk)