I am delighted that, on 7 September 2023, the Prime Minister agreed a bespoke deal with the EU for the UK to associate to Horizon Europe and Copernicus programmes. This means that UK researchers can apply for grants and bid to take part in projects under the Horizon programme, with certainty that the UK will be participating as a fully associated member for the remaining life of the programme to 2027.
Horizon will give UK companies and research institutions unrivalled opportunities to lead global work to develop new technologies and research projects, in areas from health to AI. The deal is set to create and support thousands of new jobs as part of the next generation of research talent. It will help deliver the Prime Minister’s ambition to grow the economy and cement the UK as a science and technology superpower by 2030.
The UK's association with Copernicus, the European Earth Observation programme, will provide the UK’s earth observation sector with access to unique data – valuable to helping with early flood and fire warnings, for example – and with the ability to bid for contracts, which they have not been able to access for three years.
I welcome this new deal which increases the benefits to UK scientists, provides value for money for the UK taxpayer, and mitigates the impact that the EU’s delays to the UK's association will have on participation rates of researchers.
The UK agreed to associate to EU R&D Programmes but there have been delays from the EU in finalising UK association. As a result, the UK Government launched the UK Horizon Europe guarantee in November 2021 to make sure all successful UK applicants to Horizon Europe could access the same, full value of funding from UKRI that they would have received from the EU. This has enabled researchers, businesses, and universities to continue their work in the UK and continue important R&D collaboration with European and international partners.
As of the end of February 2023, the Horizon Europe Guarantee has issued grants worth more than £882 million. I fully appreciate the UK's research community's need for stability, clarity and confidence. Therefore, I welcome the recent announcement from the Secretary of State for Science, Technology and Innovation extending the Horizon Europe Guarantee to protect thousands of researchers from uncertainty. The guarantee will be in place to cover all Horizon Europe calls that close on or before the end of June 2023. Eligible, successful applicants to Horizon Europe will receive the full value of their funding at their UK host institution for the lifetime of their grant. Going forward, the UK Government's position will continue to be the same - one of openness to discussions on research collaboration. I welcome the EU’s recent openness to discussions, following two years of delays. I understand that the EU has not yet made any proposals to address the financial terms of UK association, given we are now over 2 years into a 7-year programme, but the UK is ready to work swiftly and constructively together on a range of issues including UK association.
The UK rejoining the Horizon programme is a complex set of negotiations on funding arrangements and governance, and the one way to guarantee that you have the worst outcome in negotiations is to say you will sign up whatever the conditions are. It is absolutely right that the Government does not agree to sign up until the negotiations are completed.
In the event that the UK is not able to secure association with the EU on fair and appropriate terms, I welcome the Government's plan to implement the Pioneer programme. This bold, ambitious alternative would introduce a new long-term programme, established as quickly as possible if needed, and the Government would undertake intensive engagement with researchers and businesses to determine priorities for a programme that would help build on UK strengths and develop new capabilities, while distributing resource and support for the sector across the country.
UK Trade and Business Commission Report
The UK is now trading with the EU as an equal and sovereign partner outside of the single market and customs union. This delivers on the Government’s manifesto commitment to take back control of our borders, laws, and money.
Growth is one of the Prime Minister’s top priorities, and the Government recognises the vital role that international trade plays in supporting our economy. This is why Ministers have implemented a high-quality Trade and Cooperation Agreement (TCA) with the EU. The UK-EU TCA is the world’s biggest ever zero-tariff, zero-quota free trade deal. It secures continued market access across a broad range of key service sectors.
The Government has also negotiated new landmark trade deals with its antipodean partners. Deals were recently finalised with Australia and New Zealand, granting the UK unprecedented access to these markets. This will drive growth, innovation and higher wages across the country, while stimulating demand for Britain’s small businesses.
Similarly, accession to the CPTPP, announced on 31 March 2023, delivers on a post-Brexit agenda for a modern, free-trading global Britain. The UK's membership represents the future of our global trade, partnering with Japan, Canada, Australia, Singapore and New Zealand, and emerging markets such as Mexico, Malaysia and Vietnam. It will add another like-minded partner and strong voice to this powerful alliance, taking the trade bloc’s GDP to £11 trillion. It will give UK businesses tariff-free access on over 99 per cent of goods to a market of around 500 million customers. The partnership will also provide new opportunities for tech, data and the services sector supporting UK businesses and jobs.
You will also be reassured to know that, with our new post-Brexit autonomy, Ministers have removed unnecessary red tape and regulatory burdens. In fact, the Government has recently reduced reporting requirements for small businesses, which could save employers over £1 billion per year.
EU Retained Law Bill
The European Union (Withdrawal) Act 2018 brought a large number of EU laws and regulation into our domestic law. This was called Retained EU Law (REUL), and had special status, reflecting the supremacy of EU law, European Court of Justice case law and EU legal principles. In September 2022, the Government introduced the Retained EU Law (Revocation and Reform) Bill. The Bill will abolish this special status and will enable the Government, via Parliament, to amend more easily, repeal and replace REUL.
As the Bill is currently drafted, almost all REUL is automatically revoked at the end of 2023, unless a statutory instrument is passed to preserve it. This is known as a ‘sunset’ provision. The Government has tabled an amendment for Lords Report, which will replace the current sunset in the Bill with a list of all of the EU laws that it intends to revoke under the Bill at the end of 2023. The remainder will continue in force without the need to pass extra laws. By making it clear which regulations will be removed from our statute book, businesses and all those affected by these laws will have certainty. The Government will retain the vitally important powers in the Bill that allow it to continue to amend REUL, so more complex regulation can still be revoked or reformed after proper assessment and consultation.
Under the EU (Withdrawal) Act 2018, workers' rights have been retained in UK law. The Working Time Regulations provide that, subject to certain exceptions where the nature of the work makes it impractical, employees cannot work more than 48 hours a week averaged, normally, over a period of 17 weeks. It is possible for employees, as it was before we left the EU, to opt out of this provision voluntarily and in writing, either indefinitely or for a specified period. Employers can request that an employee opts out but cannot terminate their employment or treat them unfairly if they decline. Under current EU law, the regulations also impose burdensome recording keeping and reporting requirements on employers, that do not add benefits to workers but impose significant costs to the business. That’s why the Government has announced that it will be consulting on alleviating these requirements, which could save businesses £1 billion without reducing the protections for workers.
The Government provides 52 weeks of maternity leave, with the option to convert it to shared parental leave. In comparison, the EU requirement for maternity leave is just 14 weeks The right to flexible working for all employees was introduced in the UK in the early 2000s, whereas the EU agreed its rules only recently and offers the right only to parents and carers. The UK introduced two weeks’ paid paternity leave back in 2003, and the EU legislated for this only recently.
Ultimately, the UK has one of the best records on workers’ rights, going further than the EU in many areas, and I am determined to build on this progress. By further protecting workers, supporting business to comply with the law, and preventing them from being undercut by a minority of irresponsible employers, the UK can continue to have a high-wage, high-employment economy that works for everyone as we build back better from the pandemic.
CPTPP was created to expand and as it grows the UK will stand to benefit from access to new markets. Economies including Costa Rica, Ecuador and Uruguay have formally applied to join CPTPP. Thailand, the Philippines, and South Korea have also expressed an interest in joining. If these economies were to join CPTPP with the UK, the combined GDP would increase to just over £13 trillion, an expanded group which covered 10% of all UK exports in 2021. Accession puts the UK at the heart of a dynamic group of sovereign countries, including Vietnam which is predicted to be one of the fastest growing economies in the next decades.
CPTPP is one of the most modern trade agreements in the world, with ambitious services provisions that are ideally suited to the UK. The UK already sells more services than we do goods to CPTPP members, worth £31.9 billion, including £2.3 billion in business services such as auditing, accounting and legal services to Australia, £1.3 billion in transportation services to Singapore, and £1.4 billion in insurance services to Canada.
Red tape will be slashed and UK businesses will be operating on a par with local firms, bringing new benefits to the UK businesses like greater certainty around licensing procedures and ensuring independent and impartial regulators. Companies will benefit from smoother access to markets such as Singapore, Malaysia and Vietnam.
The British voted to leave the European Union in 2016. In 2017 and 2019, they voted for parties that committed to implementing the referendum result.
It is overly simplistic to state that Northern Ireland has what we used to have. Leaving the European Union means that we now have the capability to set our own trade policy and sign our own trade agreements. Northern Ireland will, for example, benefit, from our membership of the CPTPP. We could not have been a member of CPTPP and the European Union. We also have the capacity to set our own regulatory environment, our own laws and engage in state aid policies with greater flexibility.
We have also left some of the EU’s overly bureaucratic and anachronistic policies that prevented some industries from responding to more recent developments. The Common Agricultural Policy, for example, has been disastrous for European nature but the glacial pace of change in Brussels prevents countries from taking effective action to remedy the problem. The British replacement scheme, ELMS, will help farmers to farm in harmony with nature by providing public money for public goods. I am sure you will agree that this is a far better policy for 21st century Britain than a policy that awards lump sums per hectare - British taxpayers have been subsidising grouse moors for decades for the enjoyment of a minimal number of people while many native species have entered a steep decline as a direct result of the Common Agricultural Policy.
Membership of the single market without membership of the European Union would be the worst of all worlds. Remaining in the Single Market and the Customs Union whilst outside of the European Union would render the UK rule takers without any capacity to influence future changes in regulations. This would apply to the industries that contribute the most tax revenue to the Treasury. It is simply not practical for a major economy to hand regulatory authority over its biggest industries to other countries.
Brexit Impact Debate
There are clearly many upsides and downsides to Brexit, and each side will emphasise those that support their pre-existing position. In general, I think it is far too early to definitively judge whether Brexit is a success or not, as the disruption would always be greatest in the short term, and the benefits take longer to develop.
Since leaving the European Union (EU) on 31 January 2020, I believe that many benefits of Brexit have also become clear - the Government now has more control over a number of areas, including our borders, laws and money, and I can assure that the Government is now focussed on delivering on the opportunities that Brexit presents.
For example, the UK once again has the ability to make its own trade deals and the Government has an ambitious trade policy in place which will seize on the opportunities available to us as a sovereign trading nation. Recent achievements of this trade policy include securing far-reaching trade agreements with Australia, New Zealand and Singapore. Negotiations have substantially concluded to accede the UK to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The next step in the accession process will be a legal review of the agreement text. This will be followed by formal signature of the agreement. This is a free trade area with a joint GDP of £8.4 trillion in 2020, as well as for trade agreements with India and Canada.
Furthermore, the power to make and scrutinise the laws that apply to us are now back to our Parliament and the devolved Parliaments so that they are now made in Belfast, Cardiff, Edinburgh and London, not Brussels. Additionally, all EU legislation will be amended, repealed, or replaced under the new Brexit Freedoms Bill introduced to Parliament on 22 September. Much of this law was agreed as a messy compromise between 28 different EU member states and did not always reflect the UK's own priorities and objectives. I, therefore, support this Bill as it forms part of a wider plan to do things differently, in ways that work better for this country, and promote growth, productivity, and prosperity.
In the future, I believe that the UK will be able to adapt more easily to the changes and technological innovations of the coming decades. We will be able to set regulations for new sectors to encourage investment and new ideas more quickly than the EU. We will be able to set rules for our benefit. This was made immediately clear in the rollout of the Covid-19 vaccine which began in December 2020. The UK procured vaccines months before the EU, approved the vaccine weeks before the bloc, and vaccinated millions of people at a far quicker pace than our partners on the continent.
The Government also has ambitious plans to level-up the different regions of the country. Free from the limitations of EU funding, the Government is introducing the £4.8 billion Levelling Up Fund, which will invest in local infrastructure projects that improve everyday life, alongside £2.6 billion of investment through the UK Shared Prosperity Fund (UKSPF). The UKSPF will invest in domestic priorities and target funding where it is needed most: building pride in place, supporting high quality skills training, supporting pay, employment and productivity growth and increasing life chances.
Imports from Europe
The trade deal agreed between the UK and the EU ensures that there are no tariffs or quotas on trade in goods originating in either the UK or the EU. Products which do not substantially originate in the UK or the EU are, however, subject to customs duties. This is because these products are not classified as a UK or EU good and so cannot benefit from the preferential treatment that the trade agreement provides.
Customs duties payable on non-UK originating goods exported to the EU only apply when the customs value of the good exceeds €150. The customs value of the good includes the price paid for the product, insurance costs and shipping costs. Shipping cost increases are reflective of changes in the cost of energy globally and therefore are not the consequence of Brexit.
The UK left the EU because 17.4 million people voted in the largest democratic exercise in the history of our country. Remaining in the Single Market and the Customs Union whilst outside of the European Union would have rendered the UK rule takers without any capacity to influence future changes in regulations. This would apply to the industries that contribute the most tax revenue to the Treasury. It is simply not practical for a major economy to hand regulatory authority over its biggest industries to other countries.
I do completely understand your frustration, and hope that, in time, the Governments of UK and EU countries will resolve these issues, and the difficulties such as those you have experienced will become a thing of the past.
Like the Prime Minister, I voted for Brexit, and I believe in the opportunities of Brexit. Nonetheless, we have to accept that Brexit presented a unique challenge in Northern Ireland, specifically to the Good Friday Agreement. The Good Friday Agreement is fundamental to peace in Northern Ireland. It is therefore imperative that when we legislate for Northern Ireland we do so with Northern Ireland’s history and culture taking precedent over ideology.
The Windsor Framework recognises the lessons of the Northern Ireland Protocol. The Green Lane will remove the onerous bureaucratic requirements previously applying to GB-NI trade therefore lessening the influence of the EU in intra-UK relations. It means that our medical regulators in the UK now apply in Northern Ireland too meaning that Northern Irish people will be able to access the medicines that we can in Great Britain. There will be no role for the Europeans Medicine Agency reasserting the primacy of UK medicines legislation. The difficulties with regard to moving pets and plants across the Irish Sea have been resolved. VAT on energy-saving materials, such as solar panels and heat pumps, will be cut and changes to alcohol duties later this year will now be able to apply UK-wide, including the new draught relief for beer in pubs
Perhaps most relevant to the European Union is the Stormont Break. The Stormont Break means that no new or amended goods law can apply to Northern Ireland without the consent of the Northern Irish people. The people of Northern Ireland now have an effective block on new goods law through their democratically elected assembly and the ECJ will no longer be able to affect the day-to-day lives of people anywhere in the UK.
I am sympathetic to the view that no EU law should apply in Northern Ireland but if we want to avoid a hard border in Ireland then there must be a small role for the EU to play. The Windsor Framework ensures a minimum of EU law applies in Northern Ireland by scrapping 1700 pages of EU law meaning less than 3% continues to apply.
In short, the Windsor Framework is a pragmatic document that simultaneously respects the Good Friday Agreement and the result of the 2016 referendum on the European Union. I believe it is a tremendous achievement by the Prime Minister and I wholeheartedly support the agreement.
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