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Fears rise over post-Brexit workers’ rights and regulations

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Via Financial Times

The British government is planning to diverge from the EU on regulation and workers’ rights after Brexit, despite its pledge to maintain a “level playing field” in prime minister Boris Johnson’s deal, according to an official paper shared by ministers this week.

The government paper drafted by Dexeu, the Brexit department, with input from Downing Street stated that the UK was open to significant divergence, even though Brussels is insisting on comparable regulatory provisions.

The issue will come to a head when the UK begins the next phase of talks with the EU to forge a new trade deal. However, the UK in effect still faces the prospect of a no-deal Brexit next week unless EU states agree a new extension date for when the UK will leave the bloc. France was on Friday pushing for a shorter extension date than the one Mr Johnson has requested.

In a passage that could alarm Labour MPs who have backed the Brexit bill, the leaked government document also said the drafting of workers’ rights and environmental protection commitments “leaves room for interpretation”.

The paper appears to contradict comments made by Mr Johnson on Wednesday when he said the UK was committed to “the highest possible standards” for workers’ rights and environmental standards.

The document said the UK’s and EU’s “interpretation of these [level playing field] commitments will be very different” and that the text represented a “much more open starting point for future relationship negotiations”. It added that London believed that binding arbitration would be “inappropriate”.

The document boasts that “UK negotiators successfully resisted the inclusion of all UK-wide LPF rules” in the previous Theresa May deal.

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Jenny Chapman, Labour’s shadow Brexit minister, said: “These documents confirm our worst fears. Boris Johnson’s Brexit is a blueprint for a deregulated economy, which will see vital rights and protections torn up.”

Mr Johnson has in the past been a persistent critic of what he sees as unnecessary regulation from Brussels. Jeremy Corbyn, Labour leader, this week pointed out that Mr Johnson had once described employment regulation as “back-breaking”, saying the bill’s provisions offered “no real protection at all”.

But the prime minister vowed to “ensure that whatever the EU comes up with, we can match it and pass it into the law of this country”.

The document gets to the heart of the dilemma between London’s desire to stay within the EU’s regulatory orbit while also seeking to diverge from the EU economic model. Speaking in New York in September, Mr Johnson set out a vision of Britain as a low-tax, lightly regulated economy on the edge of Europe — a vision that alarms some EU leaders.

Mr Johnson’s deal leaves the UK with freedom to set its own regulatory standards from the end of its post-Brexit transition period, which runs to the end of 2022 at the latest. But the EU has warned that Britain’s prospects of getting an ambitious trade deal with Brussels depend on it continuing to uphold robust rules.

The new deal is very different to Theresa May’s, in which the UK made a legal commitment not to roll back EU regulatory standards in areas such as social and environmental protections as long as her “backstop” plan for preventing a hard Irish border was needed.

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This was scrapped by British and EU negotiators because, unlike the backstop, Mr Johnson’s deal does not involve a UK-EU customs union with free movement of goods.

Under Mr Johnson’s deal, the legally binding “level playing field” provisions that remain in the exit treaty are almost exclusively limited to Northern Ireland. But the non-binding political declaration on future EU-UK relations makes clear that there is a direct link between Britain’s regulatory environment and market access.

The declaration said both Britain and the EU should continue to uphold “the common high standards” applicable at the end of the post-Brexit transition period in areas such as state-aid policy, social and environmental regulation and tax.

It also made clear that the ambition of any future trade deal would be linked to Britain’s willingness to stick closely to relevant “union and international standards”.

Existing EU trade deals, such as those with Japan and Canada, have some provisions on limitations to state aid and respect for international climate and labour market accords, but breaches of the commitments do not lead to punitive tariffs.

EU officials have been clear, though, that something stronger is needed for the UK, given the risks that regulatory dumping in Britain, combined with extensive market access, could pose to European companies. The declaration stipulates that the level playing field commitments in a future trade deal should be backed by “enforcement and dispute settlement”.

Dexeu decline to comment.

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