Arthur Reynolds is a journalist, a former civil servant and government speechwriter.
I’ve recently returned from a week in quite possibly the bleakest city known to man: Brussels. Dark, wet and cold, the place is a soulless mass of grey concrete, populated by ashen-faced bureaucrats who look like they could use a good dose of Prozac.
An exiled British PR man offered a novel explanation for the Europeans’ moodiness – they’re missing us Brits. Since we’ve left, there’s no one to go on the razz with. Yet, if our Prime Minister has anything to say about it, a pint of Guinness and a healthy dose of banter could be back on the menu in Brussels.
On Brexit, Mr Burnham has gone on a rapid journey. During the Makerfield by-election – a contest, lest we forget, that took place less than five months ago – he assured voters: “Britain will be stuck in a permanent rut if we’re just constantly arguing and people are pulling away from each other … I am not proposing that the UK considers rejoining the EU.” Quite.
But in his back-to-the-future conference speech, Burnham began to reverse course by promising to set out “what I believe the different options are for Britain’s long-term relationship with our European partners.”
The next day, he took us further into his confidence, telling the Today programme, “we could look at what George Osborne has said about a customs union … or we could go all the way.” An utterance that could easily be mistaken for a chat-up line at the Model United Nations. Whitehall officials, however, did not see the funny side. An anonymous source told the Observer: “Officials were totally reeling. It was a million miles away from what they have been working on.”
A UK-EU summit slated for 20 November in Brussels, only the second since Brexit, will officially cover defence and security, energy, ‘people-to-people contacts’, migration and law enforcement. But Burnham’s freewheeling has given it a new meaning and officials a huge amount of new work. Speaking to the Sunday Times, he has even defended freedom of movement, drawing a distinction between “revolving door migration where people would come and then go back” and the subsequent Boriswave.
Labour Kremlinologists, including Patrick Maguire, have suggested this could be an attempt to soften up Eurocrats who see the four freedoms as nigh on sacrosanct before negotiations to join the single market or customs union. For the sake of our democracy, I hope they are right – Brexit was nothing if not a rejection of the free movement of people and the failure of subsequent migration policy does not alter this fact.
That being said, neither the single market nor the customs union is anything close to universally popular among the ministers or officials who would need to make them work. This, I can’t help but think, is not something Mr Burnham has fully thought through.
Take the beefed-up Department for Business, Innovation, Science and Trade. Its Secretary of State, Jonathan Reynolds, warned Labour Conference that a return to the customs union would force “a whole range of alignment on regulatory issues” and that constant “constitutional questions” cause “a lot of uncertainty for business.” He’s not wrong. And perhaps more pertinently, rejoining the customs union would force Britain to surrender our independent trade policy, rendering large parts of his department obsolete.
Ignore the centrist dad podcasters: independent trade policy has been one of Brexit’s great successes. Were it not for Brexit, the Chancellor would not have been free to use Wednesday’s Budget to suspend tariffs on 101 food products, heating oil and fertiliser – building on the cuts introduced in 2021, when Britain almost doubled the number of products attracting zero import duties compared with the EU regime we inherited.
We have secured access to Indian government contracts beyond that offered by the EU’s agreement. And we became CPTPP’s first new member, a trading bloc with combined economic output of almost £13 trillion. Its members include Vietnam and Malaysia, forecast by the IMF to grow by 8.4 and 5.2 per cent respectively this year, compared with 1.4 per cent across the EU.
Yet I can’t help but think that, if my old department loses its trade-negotiating role, it will only have itself to blame. Its own assessments of trade agreements admit government modelling does not capture dynamic changes over time. The department should have made these limitations central to its explanations of the deals it made, or even better, completed more sophisticated modelling. Instead, it allowed cautious headline estimates – like CPTPP increasing long-term GDP by only 0.06 per cent – to become the accepted verdict on what our independent trade policy could achieve.
On AI, however, the department has done a better job of explaining what is at stake. Giving evidence to MPs last week, Reynolds cautioned against overregulation jeopardising Britain’s access to frontier AI models and defended our flexible approach to regulation. The Business Secretary is not freelancing; the government’s own AI Opportunities Action Plan argues, “The UK’s current pro-innovation approach to regulation is a source of strength relative to other more regulated jurisdictions and we should be careful to preserve this”.
Rejoining and subjecting Britain to the EU’s AI Act would achieve the opposite effect. Google has warned that the Act risks “slowing Europe’s development and deployment of AI”. Its disclosure requirements and potential approval delays could threaten Britain’s status as the world’s third-largest AI market and accelerate the exodus of our most promising startups across the Atlantic.
I am not sure if this concerns Burnham; he shows little interest in AI or tech, preferring to ground himself in the physical – buses, water, trains. But in education, rejoining the EU would scupper one of the only ‘achievements’ of the government he inherited: imposing VAT on private schools. Taxing education is outlawed by the EU and a Labour government tempted to challenge this should be wary that when the Greeks tried to do the same during the Eurozone crisis, they earned a swift rebuke from Brussels.
It’s no wonder, then, that Lucy Powell – a spiteful class warrior if ever I saw one – has described going beyond the Government’s existing EU reset as “not possible nor desirable”.
Then there is devolution, supposedly Burnham’s governing philosophy. He wants mayors freed from Whitehall’s interference to support local businesses, yet rejoining would require them to abide by EU rules on subsidies and public procurement. Which decisions does he want to pass down to local leaders, and which does he propose to surrender to Brussels? For a man so exercised about where power sits, he has offered remarkably little explanation of how he wishes to exercise it.
But could there be a silver lining? We are constantly told that Brexit is the reason for the relentless growth in Whitehall’s headcount. Might rejoining – or even entering a customs union or the single market – allow it to shrink? I wouldn’t count on it. Some trade and regulatory work might disappear, but negotiating another settlement and implementing European rules or spending programmes would create plenty more.
Brussels’ bureaucrats may be happy with the idea of Britain’s return, and its publicans happier still. Whitehall and Burnham’s Cabinet, however, need rather more to go on than the suggestion we could “go all the way”. He owes them – and the rest of us – an explanation of where he intends to take Britain and what he is willing to sacrifice to get there.