Davis: UK will not have ‘Mad Max’ economy to undercut rivals

Britain's Secretary of State for Exiting the European Union David Davis arrives to a cabinet meeting in Downing street in London, Britain, 19 December 2017. [Facundo Arrizabalaga/EPA/EFE]

Brexit minister David Davis will say today (20 February) that the United Kingdom has no plans to recast itself as a regulation-light economy undercutting rivals on the continent, as he attempts to dispel a major concern of EU leaders.

In the second of several speeches by ministers intended to lay out the government’s plans for Brexit, Davis will tell business chiefs in Austria it is mistaken to think Britain will focus on deregulation after it leaves the trading bloc.

“They fear that Brexit could lead to an Anglo-Saxon race to the bottom. With Britain plunged into a Mad Max-style world borrowed from dystopian fiction,” Davis will say, according to excerpts of his speech.

Davis: Britain has not formally assessed impact of Brexit on economy

Britain has not conducted formal sector-by-sector analyses of the impact that leaving the European Union will have on the economy, Brexit minister David Davis said on Wednesday (6 December), arguing they were not necessary yet.

“These fears about a race to the bottom are based on nothing, not history, not intention, nor interest.

“But while I profoundly disagree with them — it does remind us all that we must provide reassurance.”

Since Britain voted to leave the EU, supporters of Brexit have argued that removing the costs imposed by EU rules is one of the main benefits of leaving the trading bloc.

In the past, ministers have suggested Britain may have to change its economic model to remain competitive and cut taxes and regulation to attract global investment.

But Davis will say that Britain will continue to maintain the highest global standards and is committed to workers’ rights, financial regulation, animal welfare and the environment.

Davis said he wanted to maintain the mutual recognition of British and European regulators.

Britain’s government is hoping its large financial services industry will be able to retain access to the EU markets after it leaves the bloc, two government officials said last week.

“A crucial part of any such agreement is the ability for both sides to trust each other’s regulations and the institutions that enforce them,” Davis will say.

“The certainty that Britain’s plan, its blueprint for life outside of Europe, is a race to the top in global standards not a regression from the high standards we have now, can provide the basis of the trust.”

UK manufacturers urgently need clarity on Brexit

According to another leaked speech, the head of a body representing the industry will say today that British manufacturers urgently need clarity on whether the country will clinch a Brexit transition period to smooth its departure from the EU.

With Prime Minister Theresa May hoping to secure an approximately two-year transition deal from her EU peers next month, Judith Hackitt, chair of the EEF group, said many companies were confused about what Brexit would mean for them.

“Secretary of state, I cannot stress enough the urgency with which we need clarity on any transition deal,” she said in excerpts of a speech she is due to make to attendees of an EEF conference including business minister Greg Clark.

On the permanent deal that Britain will also try to negotiate this year for its future trading relationship with the bloc, Hackett said: “We must avoid new trade barriers, complex customs arrangements, or vastly different regulatory environments.”

She urged the government to recognise the risks of clamping down too hard on EU workers coming to Britain, despite concerns among many voters about migration which were a big factor behind the 2016 referendum decision to leave the EU.

“Government must lead on making the public case that while industry recognises broader public concerns over immigration, companies still need access to the skills at all levels which EU workers currently provide and which cannot be backfilled easily in the short or medium term,” Hackett said.

On domestic policy, Hackett slammed the government’s apprenticeship levy which it introduced in 2017 as a way to fund training for workers.

“Whilst the levy has laudable aims, its impact on employers has been disastrous,” she said. “It is complex, companies are unable to access their funds, and many view it as another tax on business. As a result, we have seen new starts collapse, with many companies postponing or halting apprenticeships.”