The ability to cut red tape was a key Brexit prize—but Eurosceptics are in for a nasty shockby Pawel Swidlicki / March 18, 2018 / Leave a comment
We are almost one year down with one more to go in the Article 50 negotiating window, and the broad contours of the post-Brexit order are slowly coming into focus. Notwithstanding the non-negligible risk of a “no deal” scenario, following Theresa May’s Mansion House speech and the leak of the European Union’s draft negotiating guidelines for the new relationship, we have a good sense as to the likely direction of travel.
One striking feature of this new order is that rather than serving as the launch ramp into a low-tax and deregulatory cornucopia, Brexit is likely to entail an increase in the overall bureaucratic burden. This is no small irony given that hostility to “EU red tape”—both genuine and perceived—has long been a key driver of anti-EU sentiment, particularly among adherents of the Thatcherite tradition. For the likes of Jacob Rees-Mogg, Priti Patel and Owen Paterson, the best post-Brexit template for the UK is not Norway, Switzerland or even Canada, but rather Singapore, which entails scrapping a swathe of EU rules they believe are holding back British business.
For a variety of reasons however this ambition is likely to be frustrated, at least for the foreseeable future. Firstly, the EU has made the maintenance of the so-called Level Playing Field—a euphemism for the UK not undercutting the EU in areas like social and employment laws, environmental regulations and taxation—a precondition for any form of new preferential trade deal. The UK is simply too big and too close for the EU to be relaxed about it pursuing a radically different economic model, hence the EU’s demands for concrete safeguards of the sort it did not expect of Canada or Japan.
The UK economy would be badly hit by having to move to World Trade Organisation rules in March 2019. The EU knows this and has not been afraid of using its leverage to cajole the UK into accepting its position. Back in January 2017, Philip Hammond hinted to the German media that the UK might abandon “mainstream European social and economic thinking,” an exercise in kite-flying that went badly across the EU. Just over a year later, David Davis pledged Brexit would not plunge the UK into a “Mad Max-style dystopia,” and that the UK and EU faced…