No-one is above the law

Since early 2016 the well of public debate has become increasingly poisoned by rising levels of mendacity. It had been occurring before that, of course, but the Brexit referendum campaign brought out the worst in the political class with both sides – but especially the Leavers – making increasingly outrageous claims. One of the lasting consequences of the referendum is that public figures have realised that since there are no sanctions for lying in public debate, this tactic can be repeatedly applied. At some point, however, the lies begin to catch up with you. This week marked such a point with the government apparently intent on trashing its international reputation with its blatant willingness to break international law in order to secure the Brexit deal it wants. 

What happened? 

Earlier this week the UK government presented the Internal Market Bill (IMB) which, as a government minister admitted to parliament, would “break international law in a very specific and limited way.” That is a bit like saying a criminal charged with theft could claim that since they were not charged with murder, they breached only a limited part of the law in a specific way. The legal profession was quick to point out that the Attorney General’s defence of this action was “risible”. The shadow Attorney General noted: “The rule of law is not pick and mix, with acceptable laws chosen by the home secretary or an adviser in Number 10.” Such was the strength of feeling within the civil service that the head of the UK government’s legal department resigned. Clearly this action flies in the face of the image that the UK has tried to project for decades that it stands for the rule of law, and has prompted warnings from three former leaders of the Conservative Party that it threatens to undermine the UK’s standing on the world stage. So why has the government taken such a stance? 

What is the government trying to do? 

The government’s biggest concern is that the Withdrawal Agreement, drawn up by the UK and EU in October 2019 and passed into British law in January 2020, draws a border between Britain and the island of Ireland which runs down the middle of the Irish Sea. This has significant legal and economic consequences. One of those consequences is the treatment of state aid which underpins the enforcement of the European single market. In the Northern Ireland Protocol of the Withdrawal Agreement, Article 10 makes it very plain that “the provisions of Union law [relating to state aid rules] shall apply to the United Kingdom.” In other words, the limits on state aid which were in force when the UK was a member of the EU will also apply in the event that the Withdrawal Agreement comes into effect.

In the IMB legislation presented this week, the Bill states that “Regulations … may (among other things) make provisions – (a) about the interpretation of Article 10; (b) disapplying, or modifying the effect of Article 10”. Clause 45 of the IMB goes on to say the provisions in the bill “have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent.” In other words the government has given itself carte blanche to take actions which are unlawful. This is not “a very specific and limited” breach of the law. The government intends to drive a coach and horses through it.

What is the point of such action? 

A number of well-placed sources have reported that the UK has taken specific exception to state aid rules because it wishes to provide support to the tech industry as the economy repositions for the digital age. Ironically, the UK has traditionally been opposed to state aid to support particular industries. According to the EU’s State Aid Scoreboard the UK share of state aid spending in 2018 was 0.34% of GDP versus an EU average of 0.76%. It could thus double its support and not be out of line with the rest of the EU. Without knowing exactly who in government is pushing the idea, we know that Dominic Cummings, Boris Johnson’s key adviser, is passionate about all things tech. According to Cummings: "Countries that were late to industrialisation were owned/coerced by those early (to it) ... The same will happen to countries without trillion dollar tech companies over the next 20 years." 

But the UK’s efforts to back industrial winners over the last 70 years have been abysmal. British Leyland, the former state-owned car giant, was a microcosm of all that was wrong with state-backed capitalism: Management which did not know how to manage organising a labour force which did not want to work to produce cars for a public which did not want to buy them. Previous efforts to back tech companies include ICL, formed in 1968 to create a British computer industry that could compete with major world manufacturers like IBM - an experience that did not end well. ICL was sold to Fujitsu in 1990. Nor did the Conservative government raise any eyebrows when ARM was sold to Softbank in 2016. In any case, for all the noises about generating tech titans to compete on the world market, the UK will not be able to develop one if it is unable to sell into the European market. And that is precisely what will happen if the current spat results in no trade deal between the UK and EU. 

Implications 

It is worth noting that the agreement which Theresa May’s government reached with the EU did not envisage a border in the middle of the Irish Sea. In her words to parliament, “no UK Prime Minister could ever agree to” such a plan. Her government therefore reached an agreement with the EU which created a UK-wide ‘single customs territory’, avoiding the need for customs checks between Great Britain and Northern Ireland although the province maintained regulatory alignment with the EU. But Northern Irish politicians objected because it would have introduced differences in regulation between Northern Ireland and the rest of the UK, even though a majority of the population were in favour. Hardline Brexiteers (including Johnson) objected because it would have meant the UK remaining in a customs territory with the EU, removing the UK’s ability to vary its tariffs. Therefore the plan which the Johnson government signed up to allowed the UK to vary tariffs but in return reintroduced the sea border. 

For anyone in government to argue that they did not understand the implications of the plan is disingenuous. This was a plan the Johnson government negotiated and signed up to in October 2019; sold to the electorate during the election campaign (“Our deal is the only one on the table. It is signed, sealed and ready”) and was passed by a majority of 331 to 231 in the House of Commons on 9 January. Johnson owns this – there is no getting away from that fact. So why undertake such a stupid act? 

Perhaps one of the objectives is to prompt the EU to walk away from negotiations, thereby delivering the no-deal Brexit which some in government appear to want. With the EU rather than the British government withdrawing, the government could then blame the adverse economic fallout on the EU. But the experienced EU negotiators are smarter than to fall for that trick and have instead called for the UK to withdraw its plans to override the Withdrawal Agreement by end-September or potentially face a legal challenge. The US has also applied pressure with Nancy Pelosi, speaker of the House of Representatives, warning that if “Brexit undermines the Good Friday accord, there will be absolutely no chance of a US-UK trade agreement passing the Congress.” The Johnson government is thus looking ever more diplomatically friendless. Going ahead with a policy which jeopardises a trade deal with both the EU and the US would be the height of stupidity.

As to how all this ends, the next few days will tell. The IMB may fail to pass the House of Commons if sufficient MPs rebel against the government. It may be blocked in the Lords where by convention manifesto commitments are not blocked (the Salisbury Convention), but a policy which contravenes promises made to the electorate is likely to promote significant resistance. It may even be passed into law! However, I maintain that there is still a Brexit deal to be done but the limits of what the EU will tolerate are being tested. Whatever happens, this is a government which is rapidly losing the trust of large parts of the electorate as well as unsettling the international diplomatic community. At a time when it is drawing up new measures to combat the spread of Covid-19, it would do well to remember that they will only be successful if people comply with the law. And as last year’s legal challenge made clear, even the government is not above the law.