The chancellor’s views on EU rules and standards suggest he may notby Guy de Jonquières / January 20, 2020 / Leave a comment
Does Britain’s chancellor of the exchequer know what he is talking about? That is a troubling question to ask about any cabinet member, above all the one charged with managing the nation’s economy and finances. But it is unavoidably posed by Sajid Javid’s weekend interview with the Financial Times, in which he warned business leaders to drop their campaign to keep Britain aligned with European Union regulations and standards after Brexit.
The chancellor’s message, which has predictably caused much anguish in corporate boardrooms, could hardly have been more explicit: “There will not be alignment, we will not be a ruletaker, we will not be in the single market and we will not be in the customs union—and we will do this by the end of the year.”
However, what he actually meant, and whether even he understands it, is far from clear.
Not only does Javid’s position directly contradict what he was saying just before the 2016 referendum, when he posted an article on his own website headlined: “The only thing leaving the EU guarantees is a lost decade for British business.” His remarks at the weekend also appear to be based on a misunderstanding of what regulations and standards are, how they are formulated and why they matter.
Many, probably most, standards originate with business and industry associations and are the result of lengthy international deliberation and coordination, after which governments will often enshrine them in law. Governments can also play a role in shaping them. However, it is by no means decisive. To empower officials to overrule business and impose their own dictates against its wishes, which is what Javid appears to have in mind, seems perverse. Such proposed intervention is all the odder coming from a government that claims to champion private enterprise and free markets.
Furthermore, many standards are global and the UK has worked hard as an EU member to make them more so. Abandoning or repudiating them would be a big U-turn. It would also make life much more difficult for UK exporters, not just in the EU but on many markets elsewhere. Indeed, the EU is committed to exporting its own regulations and standards to the rest of the world and has pushed to have them accepted in trade deals with other countries.