UK-EU Future Relations

Future Relations between the UK-EU with David Lidington

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For our first UK-EU Relations Committee event after the summer, the Chamber welcomed Sir David Lidington, former Chancellor of the Duchy of Lancaster, and UK MP, to speak about ‘Future Relations Between UK-EU’.

The nature of the current relationship between the UK and the EU was described like the fallout after a major earthquake, with a series of aftershocks taking place on both sides. The wounds generated by Brexit are taking longer to heal than would have been thought, and though it is in the interest of both sides to build a close partnership, there is not enough strategic thinking on what the long-term relationship should look like, but that should come with time.

The current UK Government policy suffers from two main flaws. The first being described as ‘cakeism’ – the Government wants to be free of EU legislative control but at the same time wants to enjoy the fruits of the EU market. Secondly, the UK Government overestimates the importance of the UK in the agenda of the other 27 EU member states, who though they place importance on a good relationship with the UK, it is not as important to them as other issues.

Next, three issues were outlined that can be seen as the most important when considering the future of UK-EU relations. The first was the issue of Northern Ireland and the Northern Ireland protocol. The protocol is becoming the key issue in Northern Ireland and threatening the power sharing devolved institutions prior to its 2022 election. To compromise, the UK Government must own its deal and negotiate conformity with the EU sanitary laws, to stop businesses from having to deal with two lots of expensive compliance costs. The EU should compromise by taking a more risk based and targeted approach to enforcement checks in Northern Ireland. However, the UK is likely to continue extending the deadline, to avoid causing any issues in Northern Ireland.

Secondly, the issue of new technology and modernisation could be an area where the UK does diverge from EU policies. The Chinese challenge in 21st century technologies is real; by 2049 the Chinese government aims to be dominant in 21st century technologies. The current UK Government believes that the EU has been too restrictive in its approach to new technology and that the UK needs to modernise quickly in response to the Chinese threat. Subsequently, in areas such as genetic modification policy could be where we see the greatest split in policy between the UK and the EU. In addition, in the financial services sector we are also likely to see some divergence. As the UK no longer has a seat at the EU table to regulate on financial services, they are likely to look for other financial services hubs. After the UK has negotiated its financial services agreement with Switzerland, they are likely to look for other hubs such as New York, Dubai, and Singapore.

Finally, the issue of defence and foreign policy. The strategic need for the West to unite against the threats posed by Russia and China was discussed. We must try to invent new arrangements such as the possibility of an augmented G7, which would be a network of countries which share Western values. Largely, so far we have seen the current UK Government stick closely to the EU foreign policy standpoint and we can probably expect this to continue.

In conclusion, Brexit is completed and there is no going back, however there is a young and vocal pro-European population in the UK which could affect things long term. What is most likely in the long term, is an ambitious association agreement which seeks to reenergise innovation and work together to address the significant challenges of China and Russia. The role of the Chamber was also discussed as being a platform for British and European officials and regulators to meet and understand the needs of international business.

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Confirmed Mr David Lidington

Mr David Lidington

Former Chancellor of the Duchy of Lancaster,
David was elected Member of Parliament for Aylesbury in 1992 and has held a number of positions including Shadow Secretary of State for Northern Ireland from 2003 to 2007 and Shadow Minister for Foreign and Commonwealth Affairs from 2007 to 2010. He was Leader of the House of Commons and Lord President of the Council from July 2016 to June 2017. He then served as Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster between 8 January 2018 and 24 July 2019.

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