Johnson set to tear up EUrules on tax and workers’ rights
No10 said to object to range of demands set out by European Commission in draft negotiating paper
BORIS JOHNSON is preparing to dismiss demands by Brussels for the UK to abide by EU rules on tax and workers’ rights after Brexit.
No10 is understood to object to a raft of stipulations in a draft negotiating mandate submitted to EU leaders by the European Commission – as senior Tories described some demands as “ridiculous”.
The disclosure comes after David Frost, the Prime Minister’s Europe adviser, held talks with British officials last week to finalise the UK’s negotiating position for trade talks with the EU.
Mr Johnson’s negotiators are expected to insist that the UK should be given a deal akin to the EU’s agreements with countries such as Canada, South Korea and Japan, which they say involve less stringent requirements than those set out in the draft mandate.
The EU insists that the UK must agree to a “level playing field” in order to guarantee that the country will not undercut the bloc with a Singaporestyle low tax system.
But a Conservative source warned that the election had given Mr Johnson a “strong mandate” to “focus on sovereignty”. The clash over a fundamental demand by the EU appears to increase the likelihood that trade negotiations could end without a deal at the end of this year, when the Brexit transition period expires.
Tomorrow evening, Mr Frost is due to give a lecture in Brussels on the EU and the type of relationship the UK is seeking with the bloc after Brexit.
Meanwhile, Liz Truss, the International Trade Secretary, hit out at a US decision to increase tariffs on aircraft parts imported from Europe and the UK, in a trade war over EU subsidies given to Airbus, the aerospace giant. She said: “The tariffs on aircraft parts announced by the US today are in no one’s interest and harmful to both the UK and US.
“I have spoken to my US counterparts, calling on them to engage and reach a negotiated settlement.”
Mr Johnson is seeking a tariff-free trade agreement with the EU, but the commission’s draft negotiating mandate makes clear that, because of the UK’s “geographic proximity to the EU”, such a deal would be contingent on guarantees that “a level playing field is ensured through robust commitments”. It adds: “These commitments should prevent distortions of trade and unfair competitive advantages.
“To that end, the envisaged agreement should uphold the common high standards in the areas of state aid, competition, state-owned enterprises, social and employment standards, environmental standards, climate change and relevant tax matters. In so doing, the agreement should rely on appropriate and relevant union and international standards.”
Mr Johnson’s negotiators are expected to resist any suggestion that the UK should be subjected to more stringent requirements than South Korea, Japan and Canada, which all negotiated trade deals with the EU without such sweeping demands for their regulations to remain in line with those of the EU.
Ministers will claim that many of the EU’s standards fall below the UK’s, including rules relating to workers’ rights, environmental protections and health and safety. Senior Tories have dismissed as “ridiculous” the idea that the UK should comply with EU tax regulations when the country was a founding member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and has long enforced its own anti-avoidance rules.
Last month Michael Gove, the Chancellor of the Duchy of Lancaster, said he was unable to guarantee “frictionless” trade with the EU because of its demands on the need for the UK to align with its rules.
He said: “We want trade to be as frictionless as possible, but the EU is clear, you can only have fully frictionless trade if you accept all of their rules, if you accept all their laws, you are subordinate to their judges, you are subordinate to their political structures.
“We want to have as close as possible a relationship with the EU. The approach we want to take is built on the relationship they have with Canada. That means a relationship where there are ultimately no tariffs.”
A Conservative source said: “We have a strong mandate to get Brexit done, get a future trade deal and focus on sovereignty. This is in line with EU trade deals they have done before – and we expect the same to apply to us.”
Senior aides to the Prime Minister last night vowed to scrap the BBC’s television licence fee and replace it with a subscription model. The move could force the corporation to downsize and sell off most of its radio stations.
‘We want to have as close as possible relationship ... built on the relationship that they have with Canada’