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Smith Square Review – 02 March 2018

Smith Square Review – 02 March 2018

Theresa May: the UK is not cherry picking

Following last week’s Cabinet sub-committee meeting, Theresa May made a speech at Mansion House speech today to offer some clarity on the Government’s vision for our future relationship with the EU.

In the past, EU chiefs have accused the Prime Minster of trying to cherry pick the best bits from the union, but today May justifiably insisted that all trade negotiations are essentially an exercise in cherry picking. The Prime Minister admitted that, as in all negotiations, neither side will obtain everything they set out to achieve and a compromise would eventually need to be found.She did not however, make clear what compromise the UK would be ready to make, stressing that there was no ready-made model which would be acceptable to the UK , nor would they accept  a model  which has been cobbled together from others: “We will not accept the rights of Canada and the obligations of Norway”.

However despite this, the speech will still be regarded as May’s best on the topic yet. By presenting herself as wanting to be straight with the British people, she was able to explain that nothing would be the same when we leave the EU, whilst emphasising the need to strike a balance between the past and the future.

For example, May admitted that access to the Single Market would be reduced, yet highlighted the need for frictionless trade and mentioned the integrated supply chain throughout her speech.She emphasised the opportunity for the UK to take back control of its own laws, but suggested that EU law would be taken into consideration in different cases, such as for laws related to data protection.

Theresa May will be relieved to have finally presented the world with her vision for Brexit and even if still ambiguous, it is slightly less ambiguous than before. As reaction to the speech comes from all sides, the question is whether May’s vision ends up being too soft for the Brexiteers but too hard for the Remainers. Watch this space.


Breaking the silence: Labour picks a side

Back in May 2015, if anyone had predicted that Jeremy Corbyn would one day receive the public endorsement of the Nuclear Industry Association, they would have been laughed out of the room. But few could have predicted the business-friendly tone attempted by the Opposition Leader in Coventry this week.

After months of deliberation and inner turmoil, Labour has finally pronounced its policy on the EU customs union: it wants to be in a customs union with the EU. Citing the support of the TUC and CBI, Corbyn pledged  to protect the UK’s membership of programmes from Euratom to Erasmus, negotiate bespoke, tariff-free trade deals with Brussels, and continue to work closely with the Council of Europe on matters of international security.

The speech mostly set out how remaining in a customs union could protect British supply chains and manufacturing in the North and Midlands, and argued that Conservative-led trade deals with the US and China would only weaken standards and protections in both the private and public sector.

Corbyn also emphasised the protection of the devolved nations, paying tribute to the Scottish Parliament and Welsh Assembly, and to the Good Friday Agreement, in the same breath promising to keep the Northern Irish order ‘soft’.

This speech marked a pivotal moment for the Labour Party; a concrete position on Brexit could give its domestic policies a deeper sense of direction and purpose. Meanwhile, its pronouncement on the customs union arguably forces the SNP and Liberal Democrats into positions of obsolescence come the next general election.


Exiting the EU Select Committee: leaving the EU omelette

As the Brexit deadlines loom, the exact make-up of Britain’s post-EU trading strategy remains unclear. Ideally placed to shed light on the situation is Pascal Lamy, former head of the World Trade Organization (WTO), who faced MPs at a select committee this week.

Despite the WTO rules being the backstop option relied upon by Brexiteers, Mr Lamy offered little comfort to his audience from the Exiting the European Union Committee. Instead he reiterated the tremendous degree of complexity involved with disentangling Britain’s interests from the continent. It will be, according to Mr Lamy, “like removing an egg from an omelette”. The controversial transition period was deemed to be similarly problematic, and very possibly “too short”.

So, what options does Mr Lamy think are open to the post-EU United Kingdom? Trading could be carried out under WTO rules, but Mr Lamy is very clear in his assessment that this represents a comparative disadvantage. The gold standard for trading is an internal market; in second place are bilateral agreements. This leaves WTO arrangements in a distant third place – “There is no doubt in the hierarchy”, claimed Mr Lamy.

Adding to the complexity of the situation is Northern Ireland, which under many trade arrangements would seemingly require a ‘hard border’ with our EU neighbours. Here Mr Lamy suggested that innovative legislation could be key. WTO membership is not reliant on being a sovereign country, only an autonomous customs policy is necessary. This leaves open what Mr Lamy describes as “The Macau Option”. Despite being a part of China, Macau is a member of the WTO in its own right and so is free to pursue its own trade agenda. This could possibly be a route to explore in Northern Ireland, which would allow for a customs union with the Republic of Ireland and therefore negate the need for a ‘hard border’.

However, based on this evidence session, it is clear that removing the UK from Mr Lamy’s European omelette will require the breaking of many more eggs.


Government ends the Leveson leviathan

Secretary of State for Digital, Media Culture and Sport Matthew Hancock, of recent Matthew Hancock App fame, gave a statement to the House of Commons this week, where he announced that the government will not implement the second stage of the Leveson Inquiry.

The Leveson Inquiry was a judicial public inquiry into the “culture, practices and ethics” of the British press, launched by then Prime Minister David Cameron after the phone hacking scandal. Whilst the first part of the inquiry looked into the culture of the press and its relations with politicians, phase two was due to consider the extent of improper conduct and failings by individual newspaper groups.

However, the government seemingly viewed ‘Leveson Two’ as a battle not worth fighting, despite a vote in the House of Lords in January in which Peers committed their support to the inquiry’s reopening.

Sir Brian Leveson himself also previoulsy wrote to ministers to confirm he “fundamentally disagreed” with the conclusion that the inquiry be dropped, and that the “full truth” about the behaviour of newspapers in the UK had not yet been exposed.

But, Hancock instead stated on Thursday this week that there had been sufficient changes to press behaviour since the first stage of the Leveson Inquiry to defeat the purpose of part two, and that the Independent Press Standards Organisation (IPSO) set up by Leveson had complied with the Inquiry’s recommendations. Not to mention that part one of the Inquiry cost over £5million.

The government must now overturn the House of Lords amendment calling for part two of the Inquiry in the Data Protection Bill when it returns to the House of Commons. With Labour’s Deputy Leader Tom Watson accusing Hancock of “brazenly misleading” the Chamber, Labour’s opposition is, to say the least, expected.