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Mon 1 March 2021

Post-Brexit Britain is free from EU rules and oversight in theory but not in practice, says Mike Buckley

In 2012, five newly-elected Conservative MPs co-authored a pamphlet, Britannia Unchained, which denounced the UK’s “bloated state, high taxes and excessive regulation” and British workers as “among the worst idlers in the world”. Four of it authors – Dominic Raab, Priti Patel, Liz Truss and Kwasi Kwarteng – are now among the leading lights of Boris Johnson’s Cabinet. 

Their judgement of the UK workforce was severe.

“We work among the lowest hours, we retire early and our productivity is poor,” they wrote. “Whereas Indian children aspire to be doctors or businessmen, the British are more interested in football and pop music.”

The UK, they declared, should “stop indulging in irrelevant debates about sharing the pie between manufacturing and services, the north and the south, women and men”. 

Their prescription was that, instead of learning from Germany and the Nordic states, as social democrats advocate, that Britain should copy Australia, Canada and the Asian ‘tiger economies’ of Hong Kong, Singapore and South Korea – by slashing regulation and taxes. 

For libertarians like them, the promise of a hard Brexit was that it would allow the deregulation they dreamed of. “If we could halve the burdens of the EU social and employment legislation we could deliver a £4.3 billion boost to our economy and 60,000 new jobs,’ said Priti Patel in 2016. What burdens she was speaking of aren’t clear, but the legislation she was referring to contains such onerous measures as paid holidays, safety at work and maternity leave – not something that most employers, never mind employees, would want to be without. 

Patel and her colleagues now have a Brexit deal that allows this deregulatory bonfire – at the price of huge, costly, and for many unworkable new barriers to trade. But the UK is, on paper, free from the obligation to stay aligned with EU standards. 

During negotiations the Government claimed that it would only use its right to diverge to raise standards – ignoring the fact that there was no EU barrier to raising standards while the country was a member of the bloc. In late 2019, a Government spokesperson said that it had “no intention of lowering the standards of workers’ rights or environmental protection after we leave the EU”. The Prime Minister himself vowed to “ensure that whatever the EU comes up with, we can match it and pass it into the law of this country”. 

The reality is proving very different. In environmental policy, the Government’s first act of divergence has been to sanction the use of a bee-killing pesticide banned in the EU, despite a 2019 UN report which outlined its “large-scale adverse effects on bees and other beneficial insects” and the loss of a third of the UK’s bee population in a decade. 

But it’s in the area of workers’ rights that the unfulfilled spirit of Britannia Unchained can most clearly be seen.


Ambition Versus Reality

Kwasi Kwarteng is now Business Secretary and is reportedly planning to rip up EU labour market rules including the working time directive, access to rest breaks and guaranteed paid holiday. 

The Government insists that any reforms would be designed to help both companies and their employees, yet on a call with 250 leading business figures earlier this month Johnson urged industry to get behind plans for future regulatory liberalisation after Brexit – to the delight of free marketeers in his Cabinet who see the current ‘one size fits all’ 48-hour rule as a “straitjacket on the economy”.

So far so good for the Britannia Unchained ambition – were it not for three potential blocks in the road. 

First and most immediate is the fact that business have little interest in deregulation. Mark Fox, chief executive of the Business Services Association, has said that his members wanted reforms that “enhance stability” rather than cause disruption. “We are also mindful of the Prime Minister’s call to ‘level-up’ and that must always mean improving the environment in which people work,” he added. Adam Marshall, director-general of the British Chambers of Commerce, has said that the immediate priority for business after Brexit is to focus on developing a stable trading relationship with the EU. 

Second, cuts to labour standards would harm workers and could damage the Conservatives’ chances in the northern ‘Red Wall’ seats that they depend on for their parliamentary majority. A change in the calculation of holiday pay could be ‘a significant monetary loss’ for a low-paid worker often forced into overtime to make ends meet, said the Trades Union Congress

The Labour Party’s attack lines are already clear. “Ministers are preparing to tear-up their promises to the British people and taking a sledgehammer to workers’ rights,” Shadow Business Secretary Ed Miliband has argued. Even now, deregulation is no vote winner – there is little public appetite for deregulation, according to the Institute for Public Policy Research think tank. On its data, a mere 15% of the public favour relaxing or removing EU standards. 

Third, the Government’s plans are the first of what will be many tests of the limits of Johnson’s EU trade deal. The deal wins the UK the right to diverge from EU regulation and standards – but not without consequences. To avoid unfair competition, the EU was careful to ensure that, should the UK make use of its new freedom to diverge, that there would be consequences – including the removal of the right to trade tariff and quota-free.  

The re-imposition of tariffs is not an empty threat. Even before changes to workers’ rights were mooted, Michel Barnier, who led negotiations for the EU, said in response to the Government’s approval of harmful bee pesticides that “one ought to be careful… otherwise there will be consequences in terms of going on exporting without tariffs or quotas to our market”.

None of this means that the Government will not go ahead. Some of its number – possibly including Johnson himself – are ideologically wedded to the idea of deregulation, whatever the costs. During negotiations with the EU, the Government explicitly prioritised regaining the ability to set its own laws over retaining the economic benefits of EU membership – for Brexit to be worth it, they will want to make sure of their freedom. 

But there may come an economic cost that even this Government is unwilling to pay – retributive tariffs and quotas. The lack of enthusiasm from business or the political danger of attacking the rights of new Conservatives voters – already suspicious of Government motives – may dissuade them. This would certainly give Labour a rallying call among the working-class that it has perhaps lacked for some time. 

This is post-Brexit Britain: free from EU rules and oversight in theory, but not in practice. In reality, the country will have a Government constantly testing the boundaries of EU patience and UK public opinion to see what it can get away with. This week, it is workers’ rights, another week it will be GM crops or chlorinated chicken.

Far from being “done”, Brexit is now always with us.

Mike Buckley is director of the campaign group ‘Labour for a European Future’


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