A fresh round of negotiations with Brussels will only condemn Britain to more stagnation
Source - Daily Telegraph - 23/09/23
He will negotiate a better deal. He will commit the UK to aligning itself with EU rules. And he will secure greater access to the European market for British businesses.
As he begins to reveal possible manifesto policies, the Labour leader Sir Keir Starmer keeps referencing his disapproval of the current Brexit deal. But he is kidding both himself, and the electorate, if he believes he can improve on it.
Reopening negotiations with Brussels would create even greater uncertainty for business. It would threaten our achievements to date, while wasting huge amounts of time and political capital on a failed project.
What we know thus far of Starmer’s economic programme appears very flimsy indeed.
The shadow chancellor Rachel Reeves has ruled out major tax increases and has tucked plans for a £28bn a year “green industrial strategy” safely behind the back of the sofa.
The recent promise to hand more powers to the bean counters at the OBR could act as a fiscal straight-jacket that will rule out any space for radicalism.
But Labour appears determined to reset our relationship with the European Union.
In interviews last Sunday, Sir Keir Starmer argued that the existing deal was “too thin”, and pledged that he would negotiate a “far better deal” when the current package comes up for review in 2025.
Perhaps we shouldn’t be surprised that the man who as shadow Brexit secretary contrived to frustrate our departure from the EU now wants to move us closer to the bloc. At a conference for “progressive” leaders in Canada just this week, he promised to scrap any plans for “regulatory divergence”.
It is undoubtedly true that many companies have voiced complaints about the extra red tape involved in doing business with the rest of the continent since Brexit.
And even though it continues to decline as a percentage of the UK’s overall exports, the EU remains a major trade partner for this country. A few more multinational companies might be willing to reconsider investing in the UK were we to secure better access to the EU market.
But “associate membership”, perhaps by another name, will be the first big mistake made by a Starmer government, worsening further our economic outlook. Here’s why.
First, it will bog his administration down in endless negotiations. If there is one lesson to be drawn from the tortured, protracted process of leaving the EU, it is surely that talking about a deal is far harder than agreeing one.
At a time when his government will be facing immense pressure to fix the NHS, to pay public sector workers more, to keep the deficit under control and to meet its unrealistic green promises, Starmer’s government will be distracted by trying to work its way through protocols and trading standards with officials from Brussels.
Would the now-defunct Department for Exiting the EU be brought back to life? Would yet more civil servants be hired to cope with the challenge of renegotiation?
Next, businesses will again be forced to operate in an unstable environment. Many companies may regret that we left and might have preferred if we had remained in the Single Market and the Customs Union. But most are adapting.
Overall exports to the EU have barely changed since we left, and were up by £500m in the latest month for which we have figures. What they really need right now is certainty. A fresh round of negotiations with the EU will only undermine that.
Third, Brussels is a notoriously tough negotiator. Any plea for minor concessions could mean making big sacrifices of our own. Negotiations work both ways. And as soon as Sir Keir starts asking for a new deal, the EU will present demands of its own. Perhaps significant budget contribution. And some tougher rules to stop the City competing with Paris and Frankfurt.
It will be a long list, and the UK will have to concede on some of it to get anything out of the talks. What would a “better” deal look like?
Finally, it could mean rowing back on progress already made. In many areas, we have failed to take full advantage of Brexit. The Retained EU Law Bill is insufficiently ambitious. There has been no bonfire of red tape. Immigration is not controlled.
But we have joined the CPTPP trade bloc. A free trade deal with India around the corner, to join the ones secured with New Zealand and Australia. The Edinburgh Reforms are a welcome step towards increasing the competitiveness of our financial sector.
It is hard to feel very optimistic about a Starmer government, but if he wastes two or three years trying to get a better deal with Brussels it will be even worse than we imagine. He will condemn the nation to yet more drift and stagnation – and leave the economy in an even worse state than it is in now.
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