Last reviewed 6 November 2023
The date of the next general election remains in the hands of the Government and could be as late as January 2025 given that 17 December 2024 is the final date for the Prime Minister to call an election and 25 working days would then be needed before polling day.
Latest reports suggest that Rishi Sunak may choose Hallowe’en 2024 to give his administration the longest possible time to see an improvement in the economy without leaving it so near the deadline that he appears afraid to go to the country. Whatever date he chooses, however, opinion polls and by-election results continue to suggest that he will struggle to be the next Prime Minister. If, as is widely anticipated, that role falls to Sir Keir Starmer, it is interesting to note that he has said that he will seek a “much better” Brexit deal with the EU if Labour does win the next general election.
Although he ruled out re-joining the customs union, the single market or, indeed, the EU, Sir Keir described the current deal, negotiated by Boris Johnson and due for review in 2025, as “too thin”. He refused to go into details but said that he was confident a better deal could be negotiated with Brussels, as well as a closer trading relationship.
Call to delay new Rules of Origin
The prospect of further rounds of negotiations stretching towards the 10th anniversary of the Brexit referendum in 2026 is unlikely to be greeted with enthusiasm by UK businesses, but each passing month continues to reveal aspect of the UK–EU Trade and Cooperation Agreement (TCA) that are causing them problems. The latest complaint comes from the Society of Motor Manufacturers and Traders (SMMT) which has warned that the implementation of tougher new Rules of Origin (RoO) requirements on batteries could render electrified vehicles made in the EU and the UK uncompetitive in each others’ markets.
The new rules are due to come into force on 1 January 2024 with electrified vehicles that do not meet the new thresholds then being subject to a 10% tariff when traded across the Channel. For the consumer, the SMMT said, this could mean an average price rise of £3400 on EU-manufactured battery electric vehicles (BEVs) bought by British buyers, and a £3600 rise on UK-made BEVs sold in Europe. Conventional petrol and diesel vehicles would escape tariffs, meanwhile, which would have the perverse effect of incentivising the purchase of fossil fuel-powered vehicles. The auto sector is calling on the EU and UK to delay introduction of the new RoO requirements until 2027 to give time for developing local battery manufacture and critical mineral supply chains
Are the EU and UK finally getting closer on financial services?
Concerns have often been expressed that only very limited provisions were made for financial services in the TCA with UK-registered financial firms losing their ready access to EU markets. A tentative step towards closer agreement was made this month as the first meeting of the Joint EU–UK Financial Regulatory Forum took place in London. As well as the Treasury and European Commission, the meeting was attended by representatives of the Bank of England, the Financial Conduct Authority (FCA) and the European Central Bank (ECB).
“Based on the shared objective of preserving financial stability, market integrity, and the protection of investors and consumers, participants underscored the benefit of structured regulatory co-operation, between the UK and the EU, as an important mechanism to support the sharing of views/ knowledge and co-operation in financial services,” a joint statement said.
Strikes Act could cause problems with the EU
If that meeting gave the Government a little reason to be cheerful, however, it soon had more problems laid at its door with the TUC warning about the impact of what it calls the Strike Act on future UK–EU relations. “It risks putting the UK in breach of its labour standards commitments in the Trade and Cooperation Agreement with the EU — exposing the UK to hefty sanctions, and stoking UK–EU tensions,” it claimed. The TUC pointed out that the European Commission has already put its concerns about the legislation to the UK Government.
The Strikes (Minimum Service Levels) Act 2023 has already received Royal Assent in Parliament and will, the Government said, ensure that workers maintain the ability to strike whilst giving the public access to the essential services they need in sectors including passenger rail services, ambulance services and fire and rescue services. When minimum service levels are in force for a specified service, if the relevant trade union gives notice of strike action, employers can issue a work notice ahead of the strike, to specify the workforce required to maintain necessary and safe levels of service
Is the Windsor Framework working?
If Sir Keir Starmer is unimpressed with the way Mr Johnson dealt with trade between Great Britain and Northern Ireland, it is fair to say that Rishi Sunak also realised that changes were needed and had his moment of triumph when the Windsor Framework was approved by Parliament. The most visible sign of improvement was the introduction highlighted in last month’s report of green lanes to speed exports from Great Britain to Northern Ireland.
Now Cabinet Office Minister, Baroness Neville-Rolfe, has written to Lord Jay of Ewelme, the chairman of the Northern Ireland Protocol Sub-Committee, to set out how the Government sees progress in the implementation of the Framework. In her letter, available here, she considers support for businesses, the impact on customs, the new NI Plant Health Labelling Scheme (NIPHL) and the Northern Ireland Retail Movement Scheme (NIRMS).
Baroness Neville-Rolfe states: “The green lane has operated smoothly to date, and we are absolutely committed to working closely with businesses to address any issues that arise.” However, she raises concerns that have been mentioned in these reports on several occasions in recent months, namely that the continued lack of a Northern Ireland Executive and Assembly means that local, democratically-elected representatives are not able to have a say on these new arrangements.
Government cheers for post-Brexit wine reforms
New reforms to the UK’s wine industry will drive investment, growth and jobs, according to Food and Drink Minister Mark Spencer. He was speaking as the Government set out plans for the wine sector which will begin in 2024 “taking advantage of our freedoms outside of the EU”. Feedback from the wine industry has shown that certain regulations within the current 400-page rulebook have been stifling innovation and preventing the introduction of more efficient and sustainable practices, Mr Spencer pointed out.
Changes will include removing expensive and cumbersome packaging requirements — such as ending the mandatory requirement that certain sparkling wines must have foil caps and mushroom-shaped stoppers. This will reduce unnecessary waste and packaging costs for businesses. Outdated rules around bottle shapes will also be scrapped, freeing producers to use different shapes.
The Government will also remove the requirement for imported wines to have an importer address on the label. The Food Business Operator (FBO) responsible for ensuring all legal requirements are met will still need to be identified on the label, however, as is the standard requirement for food products. “This will create more frictionless trade and reduce administrative burdens,” the Minister claimed.
How far is the UK diverging from EU law?
Given the number of times the Government has mentioned its powers to leave behind outdated European legislation, it would be reasonable to suppose that these post-Brexit freedoms would be having a significant effect on the move to legislative independence. UK in a Changing Europe (UKICE), a network of academics and researchers co-ordinated from King’s College London, has just published the ninth edition of its regulatory divergence tracker, covering developments from August to October 2023.
It highlights six cases of active divergence (where the UK, or some part of it, changes its rules); nine of passive divergence (where the EU changes its rules and the UK, or some part of it, does not follow); two of delayed divergence (where active divergence is delayed); and five of active alignment (where the UK has actually taken steps to align more closely with EU rules, systems or programmes). On this last point, the report argues that it implies an acceptance, in many sectors, of the “Brussels effect” where EY regulatory changes set international norms which the UK has little choice but to follow.
Available here, the 50-page report notes that the clearest evidence of divergence is in the area of climate and environmental standards. There have, for example, been significantly fewer restrictions on chemicals and pesticides in Great Britain than in the Union. Meanwhile the EU is set to introduce stricter controls on worker exposure to asbestos (10 times lower than the UK’s) and has banned the sale of a range of products which include added microplastics.
If you want to read the latest legislation from the EU then its Official Journal is available in 24 different languages. But in the day-to-day work around Brussels, English remains one of the most commonly used and this is reportedly upsetting the French. With some recruitment processes to the European Commission now involving some tests that are only given in English, the French government has lost patience and filed two complaints to the European Court of Justice.