Given that Mrs Theresa May seems certain to be returned as UK Prime Minister with a greatly increased majority after the UK General Election on 8 June next, it is worth paying particular attention to what the Conservative Party manifesto which was launched yesterday has to say on Brexit issues in general and trade, immigration and agricultural issues in particular.
The manifesto actually has little new to say on these topics, with the exception of a new promise to extend agricultural support at current levels to the end of the next parliament, i.e. 2022 compared to the current commitment to maintain support at current levels to 2020. Given that EU agricultural spending may well be reduced in the next Multiannual Financial Framework period, we could end up with the paradoxical outcome that farmers in the UK, supposedly the greatest critic of the CAP, will receive higher payments following Brexit than if the UK were to remain a member of the EU, at least for a period (though of course direct payments are only one factor in farm incomes, and changes in trade access, tariff protection and exchange rates would also need to be factored in).
However, the manifesto is noteworthy for its confirmation that Mrs May seeks a ‘hard’ Brexit. It reiterates that the UK wishes to leave the single market and also the customs union, without including the mollifying phrase in her Lancaster House speech that the UK might continue to be associated with the customs union in some way.
The manifesto reiterates the pledge to reduce net immigration to the tens of thousands annually from the hundreds of thousands currently, with a specific focus on recruiting high-skill individuals for “strategically-important sectors such as digital technology”. There is no explicit mention of labour needs of the UK food and agricultural industries which are currently met by non-UK nationals.
The manifesto recognises that the UK may wish to participate in specific European programmes and that it would be reasonable to contribute to the cost of these programmes, but it restates the view that “the days of Britain making vast annual contributions to the European Union will end”.
On Northern Ireland and the North-South border in Ireland, gone is the airy commitment to no return to the borders of the past. Now, all that is promised is the maintenance of “as frictionless a border as possible for people, goods and services between Northern Ireland and the Republic of Ireland” which is a rather meaningless platitude to which all can aspire but which recognises the inevitability of “frictions”, that is, border controls, which currently do not exist.
On trade policy, the manifesto gives the most explicit indication yet that the UK intends to replicate the EU schedules when lodging new UK schedules with the World Trade Organization, but without going into the difficulties in addressing agricultural subsidy ceilings and tariff rate quotas in this process. The manifesto sets out the ambition to replicate all existing EU free trade agreements. And it also confirms that the UK will introduce a new Trade Bill in the next Parliament. This will presumably, among other things, adjust the UK’s applied tariffs compared to those it will inherit from the EU under the Great Repeal Bill in line with the manifesto ambition to make the UK a global champion “for an open economy, free trade, and the free flow of investment, ideas and information”.
On devolved government, the manifesto reiterates that the powers of the devolved administrations will increase following Brexit but asserts that “we must also ensure that as we leave the EU no new barriers to living and doing business within our own union are created”. However, it contains no details on which further powers devolved administrations might be given and whether the funding arrangements for devolved administrations will be altered.
Finally, the manifesto repeats the Prime Minister’s assertion that “no deal is better than a bad deal for the UK”, despite the fact that there no reputable economic support for this view.
Relevant extracts from the manifesto on these issues are reproduced below.
Leaving the European Union
We want to agree a deep and special partnership with the European Union. This partnership will benefit both the European Union and the United Kingdom: while we are leaving the European Union, we are not leaving Europe, and we want to remain committed partners and allies to our friends across the continent.
The negotiations will undoubtedly be tough, and there will be give and take on both sides, but we continue to believe that no deal is better than a bad deal for the UK. But we will enter the negotiations in a spirit of sincere cooperation and committed to getting the best deal for Britain. We will make sure we have certainty and clarity over our future, control of our own laws, and a more unified, strengthened United Kingdom. We will control immigration and secure the entitlements of EU nationals in Britain and British nationals in the EU. We will maintain the Common Travel Area and maintain as frictionless a border as possible for people, goods and services between Northern Ireland and the Republic of Ireland. Workers’ rights conferred on British citizens from our membership of the EU will remain. We will pursue free trade with European markets, and secure new trade agreements with other countries. We want to work together in the fight against crime and terrorism, collaborate in science and innovation – and secure a smooth, orderly Brexit. And we will protect the democratic freedom of the people of Gibraltar and our overseas territories to remain British, for as long as that is their wish. The final agreement will be subject to a vote in both houses of parliament.
As we leave the European Union, we will no longer be members of the single market or customs union but we will seek a deep and special partnership including a comprehensive free trade and customs agreement. There may be specific European programmes in which we might want to participate and if so, it will be reasonable that we make a contribution. We will determine a fair settlement of the UK’s rights and obligations as a departing member state, in accordance with the law and in the spirit of the UK’s continuing partnership with the EU. The principle, however, is clear: the days of Britain making vast annual contributions to the European Union will end.
We want fair, orderly negotiations, minimising disruption and giving as much certainty as possible – so both sides benefit. We believe it is necessary to agree the terms of our future partnership alongside our withdrawal, reaching agreement on both within the two years allowed by Article 50 of the Treaty on European Union.
Britain is an open economy and a welcoming society and we will always ensure that our British businesses can recruit the brightest and best from around the world and Britain’s world-class universities can attract international students. We also believe that immigration should be controlled and reduced, because when immigration is too fast and too high, it is difficult to build a cohesive society.
Thanks to Conservatives in government, there is now more control in the system. The nature of the immigration we have – more skilled workers and university students, less abuse and fewer unskilled migrants – better suits the national interest. But with annual net migration standing at 273,000, immigration to Britain is still too high. It is our objective to reduce immigration to sustainable levels, by which we mean annual net migration in the tens of thousands, rather than the hundreds of thousands we have seen over the last two decades.
We will, therefore, continue to bear down on immigration from outside the European Union. We will increase the earnings thresholds for people wishing to sponsor migrants for family visas. We will toughen the visa requirements for students, to make sure that we maintain high standards. We will expect students to leave the country at the end of their course, unless they meet new, higher requirements that allow them to work in Britain after their studies have concluded. Overseas students will remain in the immigration statistics – in line with international definitions – and within scope of the government’s policy to reduce annual net migration.
Leaving the European Union means, for the first time in decades, that we will be able to control immigration from the European Union too. We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs.
We will therefore ask the independent Migration Advisory Committee to make recommendations to the government about how the visa system can become better aligned with our modern industrial strategy. We envisage that the committee’s advice will allow us to set aside significant numbers of visas for workers in strategically-important sectors, such as digital technology, without adding to net migration as a whole.
However, skilled immigration should not be a way for government or business to avoid their obligations to improve the skills of the British workforce. So we will double the Immigration Skills Charge levied on companies employing migrant workers, to £2,000 a year by the end of the parliament, using the revenue generated to invest in higher level skills training for workers in the UK.
A global champion of free trade
The United Kingdom will be a global champion for an open economy, free trade, and the free flow of investment, ideas and information. Open and free trade is key to international prosperity, stability and security – it is an essential component of an economy that works for everyone. We believe the UK must seize the unique opportunities it has to forge a new set of trade and investment relationships around the world, building a global, outward-looking Britain.
Britain has always been a great trading nation. Trade will continue to be crucial to our future growth and prosperity. As we leave the European Union, we want to negotiate a new deep and special partnership with the EU, which will allow free trade between the UK and the EU’s member states. As part of the agreement we strike, we want to make sure that there are as few barriers to trade and investment as possible. Leaving the European Union also means we will be free to strike our own trade agreements with countries outside the EU.
We will ensure immediate stability by lodging new UK schedules with the World Trade Organization, in alignment with EU schedules to which we are bound whilst still a member of the European Union. We will seek to replicate all existing EU free trade agreements and support the ratification of trade agreements entered into during our EU membership. We will continue to support the global multilateral rules-based trade system. We will introduce a Trade Bill in the next parliament.
Our countryside communities
We have huge ambitions for our farming industry: we are determined to grow more, sell more and export more great British food. We want to provide stability to farmers as we leave the EU and set up new frameworks for supporting food production and stewardship of the countryside. So we will continue to commit the same cash total in funds for farm support until the end of the parliament. We will work with farmers, food producers and environmental experts across Britain and with the devolved administrations to devise a new agri-environment system, to be introduced in the following parliament.
Role of devolved administrations
As powers return from the EU, we will be able to determine the level best placed to take decisions on these issues, ensuring that power sits closer to the people of the United Kingdom than ever before. We expect that the outcome will be a significant increase in the decision-making power of each devolved administration but we must also ensure that as we leave the EU no new barriers to living and doing business within our own union are created. In some areas, this will require common UK frameworks. We will work closely with the devolved administrations to deliver an approach that works for the whole of the United Kingdom and reflects the needs and individual circumstances of Scotland, Wales and Northern Ireland.
We will protect the interests of Scottish farmers and fishermen as we design our new UK farming and fisheries policy. And as we develop our new trade policies, we will pay particular attention to using the United Kingdom’s muscle to promote Scottish exports around the world.
We will protect the interest of Welsh farmers as we design our new UK farming policy and work with the devolved administrations to ensure the strength of the Welsh brand is maintained.
This post was written by Alan Matthews
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