‘Self-defeating’ to drop out of EU trade talks in June, says IPPR

Think tank IPPR says there is a ‘deal to be done’ with scope for compromise on key aspects of the level playing field

Following the publication of the UK government’s EU trade deal negotiating position, the progressive think tank IPPR calls on both sides to forge a compromise rather than risk a no-deal scenario.

The think tank has analysed the positions of both the UK and EU on the contentious ‘level playing field’ and has published a briefing setting out the scope for agreement (see table in notes). The analysis revealed that whilst there was a good chance of agreement on taxation, labour and environmental standards, the two sides are at ‘loggerheads’ on state aid and competition policy.

However, IPPR research has found there is little to be gained from the UK diverging from the EU on state aid rules, as current EU rules do not prevent an active industrial policy.

Marley Morris, IPPR Associate Director for Immigration, Trade and EU Relations, said:

“The UK and the EU are at loggerheads as the negotiations begin. But it would be self-defeating for the government to walk away from the table in June if talks haven’t progressed. Without a deal, UK businesses would face a range of tariffs to our biggest single export market.

“In reality, there is a sensible deal to be done. In the most contested area of the negotiations – the ‘level playing field’ – the EU is mostly not looking for the UK to follow EU rules. Instead, it simply wants reassurance that the UK’s labour and environmental protections will not fall too far below the EU’s over time.

“And the UK public agrees: our polling from 2018 found widespread public support among both remainers and leavers for maintaining EU labour and environmental standards, including those on working hours, temporary agency workers’ rights, and renewable energy targets.

“It is mainly in the area of state aid that the EU is looking for the UK to follow EU rules. This is likely to be the hardest to resolve. But as IPPR has previously argued, state aid rules do not prevent the UK from nationalising companies, from investing in research and development, or from tackling regional inequalities. There is little to be gained from ditching the EU rules.

“The EU’s proposal therefore offers zero tariffs on goods without restricting the UK’s sovereignty in the vast majority of areas. It is clearly in the UK’s interests to secure a deal this year.”

ENDS

NOTES TO EDITORS

1. The IPPR Level Playing Field Briefing is available to read here: https://www.ippr.org/blog/level-playing-field-ippr-briefing
2. The 2019 research paper State Aid Rules and Brexit is available to download here: https://www.ippr.org/research/publications/state-aid-rules-and-brexit
3. IPPR public attitudes polling on Brexit, trade deals and state aid from 2018 is available to download here: https://www.ippr.org/research/publications/have-your-cake-or-eat-it
4. More information about Marley Morris is available here: https://www.ippr.org/about/people/staff/marley-morris
5. Table outlining the scope for compromise across aspects of the level playing field:
6. Full length publications on the level playing field and points-based immigration system will be published in the next month.
7. IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org