News

Newsletter 28/01/23

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In an attempt to convince the DUP to return to Stormont, the government has reportedly promised to screen all new laws so that they don’t create extra trade barriers in the Irish Sea.

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Dear Subscribers,

In an attempt to convince the DUP to return to Stormont, the government has reportedly promised to screen all new laws so that they don’t create extra trade barriers in the Irish Sea. As things stand, such a policy would make regulatory divergence from the EU extremely difficult. Brexiteers are understandably concerned. Brexit freedoms should not be sacrificed for the sake of avoiding tough negotiations with the EU over the Irish border.

1

Rishi’s Irish border trouble

British car production exceeded 1 million vehicles last year for the first time this decade. The retail value of cars produced was more than £50 billion. The lion’s share of these vehicles were sold overseas, with the EU the largest buyer, followed by the US and China.

Trade negotiations between Canada and the UK have been called off, as talks reached an impasse over a ban on hormone-treated beef in the UK. The UK and Canada already have a trade agreement, carried over from the UK’s membership of the EU. The talks were aiming at an enhanced deal.

The Turkish parliament approved Sweden’s accession to NATO this week after the US agreed to sell them £23 billion worth of F-16 fighter jets. That leaves Hungary as the only member-state which has not ratified Sweden’s membership. US diplomats are reportedly frustrated with Orban’s delay, and have described his foreign policy as “fantasy”.

2

Orban makes things difficult for NATO

France is pressing the UK government to increase its contribution to the construction of two new nuclear power plants which its state energy company, EDF, was contracted to build in the UK. One of the plants, Hinkley Point C, was initially intended to be up and running by 2017, but that date has been pushed back to 2029 amidst spiralling costs and delays.

Media

Owen Polley on the DUP’s ‘deal or no deal’ saga

Tim Bale on Nigel Farage and the future of the Conservative Party

Blog

David Smith is Wrong on Brexit by Catherine McBride

Catherine McBride rebuts David Smith’s lazy opinion piece, written with out-of-date data from a Think Tank, that he didn’t bother to check because it reinforced his view of Brexit. If the UK wants to increase its trade and improve its economy, it is important to analyse the intricacies of UK trade data not just make assumptions from the headline figures.

Smith seemed surprised that the UK is still trading with the EU and claims that this is because the UK is close to the EU geographically. Also not true. Only the EU has been gifted complete access to the UK’s food market, so they still supply about a quarter of UK food and many UK and EU companies still have intertwined supply chains which inflated the UK-EU trade figures.

Steel yourselves, you might not like this by Catherine McBride

The UK is not self-sufficient in steel as we import the principal ingredients. Recycling the steel we made years ago is a better idea. But UK industrial electricity is too expensive to do this, primarily because of the number of intermittent renewables on the grid. If we want to keep steel making in the UK, we need to rethink our electricity production.

Swapping cheap coal for expensive electricity will not end well for UK steelmaking. We have to do something about the price of our electricity. Adding more gas-fired power stations will help, while we add more conventional nuclear production or Small Modular Reactors or Thorium Molten Salt Reactors. But these will take time to build so we should be starting this process now. If there is a silver lining to the closure of the blast furnaces at Port Talbot, it must be the wake-up call to lower the price of UK electricity.

Key Points

Anyone who values the freedoms which Brexit has brought should be concerned by reports that the PM has offered to screen all new laws for their effect on the internal border in the Irish Sea. Were such a policy to be implemented, it would give Whitehall a powerful tool for enforcing regulatory alignment with the EU. Any divergence from EU rules would, under the Windsor Framework, create a need for new customs checks in the Irish Sea

No surprise, then, that Brexiteers in government and on the backbenches have been quick to criticise the plans. Business and Trade Minister Kemi Badenoch has said she will challenge the plans in Cabinet while Jacob Rees-Mogg said that the plans would “restore EU hegemony over us”.

The fact that, 8 years after voting to leave and 3 years after agreeing a trade deal with the EU, the border in Ireland still presents an unsolved problem is a damning indictment of policy-makers in Whitehall. There ought to be nothing unexpected or surprising about Northern Ireland posing a problem, nor about the stubbornness of Unionists over the creation of a border in the Irish Sea. A more competent government would have worked from the outset what a realistic compromise might look like and negotiate accordingly.

Unfortunately, successive governments have been beset by a refusal to face reality, hoping that the issue of the border in Ireland would be settled one way or another once the main UK-EU trade deal was in place. The sad fact is, that as Keir Starmer’s government gets closer, the chances of long-term alignment with EU rules increases. Given his pro-EU tendencies, he will have no qualms sacrificing the ability of the UK to diverge from EU rules. If this can be packaged up as ‘saving Stormont’ then all the better. The Conservatives have a narrowing window to secure Brexit freedoms.

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Briefings For Britain