Category: Policy & Business

EU/Japan Economic Partnership

On 18th July, the EU-Japan Economic Partnership Agreement was signed in Tokyo, thus finalising negotiations on a major new free-trade deal for Europe.  The EU Commission is claiming that this is another major success and pointedly mentions that it is a powerful signal that cooperation, not protectionism, is the way to tackle global challenges.  The deal still needs to be ratified by EU legislatures over the coming months.  Key points include:

  • Bilateral trade – offers substantial opportunities to further expand EU’s exports to Japan, estimated at €86 billion per annum (€58 billion for goods and €28 billion for services).
  • Customs duties – the deal seeks to remove €1 billion worth of duties which affect both European exporters and consumers.
  • Agri-food trade – the EU claims that its exports of processed agri-food to Japan could increase by more than half (circa €1 billion increase), with dairy exports potentially doubling.  The agreement will see Japan eliminating duties on more than 90% of EU agricultural exports from day one.  Current Japanese tariffs on EU food and drink products are 38-40% for cheese and 38.5% for beef.  For products that are too sensitive for Japan to remove duties completely, duty-fee quotas or reduce duties for EU produce will be increased.
  • Geographical Indications (GIs) – the EU wants Japan to recognise 205 GIs, so that only products with this status will be allowed to be sold in Japan under the corresponding name.  This list includes Scottish Farmed Salmon, West Country farmhouse Cheddar cheese, White Stilton cheese / Blue Stilton cheese and Scotch Whisky.
  • Food standards – the EU will continue to have the right to apply the precautionary principle and will apply its own standards to all goods and services sold in Europe.  For example, any food, clothing, or cars coming from Japan to the EU must respect all EU rules.  The deal also permits the EU to set higher standards for product or food safety, and higher levels of protection for labour or the environment, if it so wishes. T his, once again, emphasises the EU’s determination to continue to uphold its standards when trading internationally and is a signal to the likes of the US that the EU will not accept lower standards with respect to agri-food.

Whilst all of this sounds positive, from a UK perspective the big question concerns Brexit and whether the UK agri-food industry will see any benefit.  Central will be the eventual agreement which the UK strikes with the EU on its future relationship. The fact that some UK GIs are included in the list can be seen as a positive and, provided that the UK and the EU can agree a transition that gives the UK equivalent rights as present, implies that it would continue to benefit from such trade deals – at least during the interim.

What happens thereafter is highly questionable.  Japan has been unusually vocal in urging the UK to minimise any trade disruption arising from Brexit.

An overview of the EU-Japan Economic Partnership is available via: http://ec.europa.eu/trade/policy/in-focus/eu-japan-economic-partnership-agreement/

A chapter-by-chapter breakdown of the deal is available via: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1684   Please note that the Trade in Goods chapter alone is over 500 pages long, and makes for pretty heavy reading!

Brexit: Future Relationship White Paper

Following on from last week’s negotiating proposals supposedly agreed by the Cabinet at Chequers, the UK Government published, on 12th July, its long-awaited White Paper setting out its detailed vision on the future UK-EU relationship.  The 98-page document has received a cautious welcome by the EU-27 who are mindful of the deep divisions within the British Government.

In the White Paper, the UK Government is essentially seeking an ‘association agreement’ with the EU of unprecedented scale and depth so that the UK can achieve a ‘principled and practical Brexit’ which respects the referendum result and simultaneously acknowledges the deep trading relationship between the two parties.  The key points from an agri-food perspective are set out below;

  • Frictionless trade for goods: at the border between the UK and the EU.  This encompasses the establishment of a free trade area for goods as a means to protect the deeply integrated supply chains and ‘just-in-time’ processes developed over the past 40-plus years.
  • Common Rulebook for goods including agri-food: would seek to avoid customs and regulatory checks at the border but would only cover ‘those rules necessary to provide for frictionless trade at the border’.  The White Paper identifies three broad categories of rules relevant to agri-food and fisheries:
    1. Sanitary and Phytosanitary (SPS) rules – would be included in the common rulebook.  Linked with this, the UK would ‘make an upfront choice to commit by treaty to ongoing harmonisation with the relevant EU rules, with all those rules legislated for by Parliament or the devolved legislatures.’
    2. Rules relating to wider food policy – this would include marketing rules that determine how agri-food products can be described and labelled.  As these do not need to be checked at the border they would not be included in the common rulebook.  Geographical Indicators (GIs) (e.g Stilton cheese and Melton Mowbray Pork Pies) would also be included in this category and the UK will be establishing its own GI scheme after Brexit in accordance with WTO rules.  As part of this, the UK would open its GI scheme to both UK and non-UK applicants.
    3. Agricultural and Fisheries Policies – as previously communicated, the UK will leave both the CAP and the Common Fisheries Policies, thus enabling it to pursue domestic policies which best serve the UK’s interests.  Thus, these rules would not be included in the common rulebook. For fisheries, the UK is proposing annual negotiations with the EU on access to its waters.  Some EU Member States will have significant concerns about this.
  • Facilitated Customs Arrangement (FCA): would seek to ‘remove the need for customs checks and controls between the UK and the EU as if they were a combined customs territory’.  The Government claims that it would enable the UK to control its own tariffs for trade with the rest of the world.  For businesses this would mean;
    • where a good reaches the UK border, and the destination can be robustly demonstrated by a trusted trader, it will pay the UK tariff if it is destined for the UK, and the EU tariff if it is destined for the EU.  This is most likely to be relevant to finished goods; and
    • where a good reaches the UK border and the destination cannot be robustly demonstrated at the point of import, it will pay the higher of the UK or EU tariff.  Where the good’s destination is later identified to be a lower tariff jurisdiction, it would be eligible for a repayment from the UK Government equal to the difference between the two tariffs. This is most likely to be relevant to intermediate goods.

The UK Government claims that up to 96% of UK goods trade would be able to pay the correct or no tariff upfront, with the remainder most likely to use the repayment mechanism.  This is in effect combining the Customs Partnership and ‘Max-Fac’ proposals in the last year’s paper, both of which were rejected by the EU.  There was an acknowledgement by the UK that this system would become operational in stages as both sides completed the necessary preparations.  Given where the infrastructure is currently at, this process could take several years.  The UK Government has already stated that it envisages the UK remaining part of the EU Customs Union for a year after the end of the Transition Period.  This may well get extended.  It is unclear what ability the UK will have to strike Free-Trade Agreements (FTAs) with other countries whilst it remains within the Customs Union.

  • Rules of Origin: agreement not to impose tariffs, quotas or routine requirements for Rules of Origin on any UK-EU trade in goods.  This would allow EU content to count as local content in UK exports to its FTA partners for Rules of Origin purposes, and UK content to count as local content in EU exports to its FTA partners.  ‘Diagonal cumulation’ would allow UK, EU and FTA partner content to be considered interchangeable in trilateral trade.
  • Trade with non-EU countries: the UK’s claims that the FCA will enable it to strike Free Trade Agreements with non-EU countries as the UK will have its own schedule with the WTO.
  • Participation in EU agencies: UK would seek continued participation in agencies which facilitate goods being placed on the EU market but conceded that it would not have voting rights.
  • State Aid: the UK would continue to apply the EU’s State Aid rules via a common rulebook. Although elsewhere in the document, the Government is seeking to reserve its right to make its own arrangements regarding tax. As highlighted in a recent article, there were questions about whether there would be limits on the UK implementing agricultural policy tools such as tax deposit schemes (e.g. similar to the Australian Farm Management Deposit Scheme) which do not comply with EU State Aid rules. This is an area that will require clarification, potentially via the Agriculture Bill due later in the year. 
  • Maintain high standards in environment, employment and consumer protection rules: includes ‘non-regression provisions’ to ensure that current high standards are maintained by the UK.
  • Northern Ireland/Ireland: taken together, the UK Government believes that its proposals (including the points set out above) would see the UK and the EU meet their commitments to Northern Ireland and Ireland through the overall future relationship.  It claims that this would preserve the constitutional and economic integrity of the UK, honour the letter and the spirit of the Belfast (‘Good Friday’) Agreement and ensure that the ‘backstop’ solution of the Withdrawal Agreement will not have to be used (i.e. Northern Ireland remaining in the Single Market).  The Irish Government in particular has responded positively to this as it is also seeking to resolve the frictionless border riddle via the overall UK-EU relationship.  However, the UK Government’s proposals are arguably narrower than what was envisaged in the December Joint Report which contained commitments on protecting the all-island economy and North-South cooperation. The latest UK proposals are very much focused on goods trade only (i.e. services are omitted). 
  • New Joint Institutional Arrangements: these are required to manage the future relationship in key areas such as the common rulebook, including a clear process to update relevant rules in a manner that respects the UK’s sovereignty and provides Parliamentary scrutiny.  This will include regular dialogues at leader (PM) and Ministerial levels.  There would be a Joint Committee to discuss and interpret regulations as well to resolve disputes which may arise.  At times, such disputes could be resolved via a binding independent arbitration.  These bodies would have oversight by the European Courts of Justice (ECJ) as the interpreter of EU rules, but only the UK courts (whilst giving regard to EU case law) could give judgements on rules which apply to the UK.  Here, the UK is effectively conceding that in areas where it commits to adhering to the common rulebook, the ECJ would (indirectly) hold sway. 
  • End to Free Movement: however, the UK proposes introducing new frameworks which would enable ‘UK and EU citizens to continue to travel to each other’s countries and businesses and professionals to provide services’.  In agri-food, the provision of services associated with the supply of input equipment for example, is an important consideration and whilst the UK proposals imply that such arrangements could continue along much the same lines as present, questions remain about the extent to which this will be the case. 
  • Mutual recognition of professional qualifications: including for those working in the veterinary and agri-food sectors.  The extent to which this includes low or unskilled workers remains to be seen and is unlikely to be clarified until the Migration Advisory Committee (MAC) publishes its report in September

The white paper is available via: https://www.gov.uk/government/publications/the-future-relationship-between-the-united-kingdom-and-the-european-union

Whilst there has been a polite initial response from the EU, the proposals are likely to raise several objections from their side including:

  • Indivisibility of the Single Market:  the EU will fundamentally object to the UK wanting to remain in the Single Market for goods, without accepting the EU’s rules on freedom of capital, services and movement.  This separation, combined with the potential for divergence in areas not covered by the common rulebook, could give the UK competitive advantages in years to come and could undermine the rationale for EU membership by others.  This could potentially include the protection currently afforded by GI designations to EU-27 brands (e.g. Parmesan cheese) sold to the UK if the UK decided not to continue with existing GI legal protections.
  • Trade with non-EU countries: whilst the proposals focused heavily on tariff-free access between the UK and the EU, the UK wants to reserve its right to do free trade deals with other countries, potentially including agri-food products.  Whilst the UK’s participation in a common rulebook for agri-food trade would limit the scope for cheap imports, there is still a possibility that such trade could significantly displace EU exports to the UK, if third countries met the standards required.  This would have an onward impact on domestic prices in the EU-27.  The EU is expected to push-back strongly on this to curtail any potential displacement.
  • Complexity and cost: the UK’s proposals amount to an elaborate set of mechanisms to replicate its current access to the EU across a wide variety of areas.  To some, it is akin to the arrangements between the EU and Switzerland which Brussels is keen to rationalise.  Therefore, the EU is likely to have serious reservations about the creation of new frameworks adding yet more complexity to what is already and intricate tapestry.  There is little detail in the White Paper as to how much all of this will cost, but one can anticipate that the EU will expect the UK to bear a substantial proportion of any funding involved.

Whilst many questions remain unresolved, the UK Government’s White Paper provides a credible starting point for the substantive negotiations with the EU to take place.  These need to be urgently accelerated as there is a huge amount of ground to cover between now and the autumn.  For the agri-food sector, the commitment to ‘ongoing harmonisation’ via a common rulebook for agri-food trade should provide some welcome reassurance for the industry generally, particularly those which are heavily dependent on EU export markets.  Furthermore, given President Trump’s claim that the UK proposals would likely ‘kill’ the prospect of the US-UK trade deal, this may also be seen as a positive by those concerned with the potential for cheaper imports to undermine UK farming.  That said, a lot of uncertainty remains especially given the principle that ‘nothing is agreed until everything is agreed’.

Farm Regulation Review

The regulation and inspection of farms in England could see a big shake-up if the recommendations of a review currently underway are accepted by Government.   This could include a new over-arching regulator and the licencing of farms to operate.

The Farm Inspection and Regulation Review was launched in March and is being led by Dame Glenys Stacey.  It is due to present its findings by the end of the year, but has recently published an interim report.  In terms of the current arrangements, Dame Glenys seems unimpressed.  The report finds that the rules and standards faced by agriculture are complex and confusing; deriving from a vast number of pieces of legislation.  The inspection regime was not found to be excessive compared to other industries.  However, most farm visits are not ‘inspections’ as would be widely understood – they are often for a single purpose rather than a ‘holistic’ overview of the entire farming operation.  Much of the inspection landscape is skewed by the enforcement of CAP schemes.  Of course, with Brexit, there is an opportunity to start afresh in terms of regulating agriculture.  A new regime is proposed by the report with the following features;

  • there should be a single Regulator for the farming industry (OfAg?).  This would have its own skilled field force to inspect and regulate.  Some inspections could be contracted-out to third parties (i.e. making more use of existing farm-assurance arrangements)
  • standards should be simplified and it should be made plain to farming what is required of it.  The industry should play a part in setting these standards so that it has ‘ownership’
  • a range of approaches is needed – with a mix of ‘carrot’ and ‘stick’, and an ability to have a proportionate sanction for non-compliance (at present, there is often little middle ground between doing nothing and bringing a criminal prosecution)
  • the use of registration or licencing of farms (or activities) should be expanded.  This allows the regulator to both know where activities are being carried-out, and gives them a sanction in the form of the withdrawal of the licence
  • farms should be assessed periodically (the implication is that some farms may actually be inspected more often than at the moment – indeed, the document states “enforcement should be ramped-up”).  However, the inspection/assessment should be ‘supportive and holistic’ trying to drive improvements rather than ‘catch farmers out’
  • a farm rating system should be considered.  It is stated that “ratings could drive improvements and offer market value to the farmer”
  • as ever, the use of technology is heralded as a way of making the process more efficient.

The full interim report can be found at – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/724785/farm-inspection-review-interim-report.pdf

 

Environmental Stewardship Payment Update

We have written previously about the delay in payments to ES agreement holders.  The expectation was that all 2017 payments would have been completed by the end of June, but this has not been the case.  New payment targets will mean that some will still be waiting until October, or even beyond.  Natural England has said it aims to have made advanced payments to 95% of 2017 ES claimants by 15th August and 98% of final payments by 15th October 2018; nearly a year and a half after they submitted their claim.  The payment schedule is meant to be 75% of the value by December in the claim year and the remaining 25% by the end of June in the year following.  Payments under these agreements are calculated on income foregone and therefore by their very nature, this will mean that agreement holders are waiting for money that they will have already spent on capital items or environmental management practices that they have had to follow as part of the requirements of their scheme agreement.

 

 

Hot Weather Stewardship Derogations

England

Natural England has received a number of requests for derogations due to the hot and dry weather, particularly to cut hay earlier than agreements allow due to early ripening.  In situations where agreement holders are unable to meet the requirements of their agreement they can request a Derogation under Environmental Stewardship or a Minor and Temporary Adjustment (MTA) under Countryside Stewardship.  Application forms are available on the Gov.UK website, but Natural England must give a derogation or MTA before agreement holders can make changes to their agreement.

Wales

Meanwhile in Wales, RPW has given a blanket derogation to allow the immediate cutting of hay meadows under Glastir options 22, 122, 124, 126, 130 and 166.  There is no need to contact RPW in these circumstances; just ensure farm records are kept up-to-date.  The derogation allows contract holders to cut only – as long as all other requirements are adhered to their Glastir payment will not be affected.  Where the delivery of other Glastir options is being affected by the weather, contract holders must contact RPW either in writing or through their RPW Online account, detailing why they are unable to carry out the requirements of the option.  Requests for these derogations will be considered on a case-by-case basis.  Where a derogation is granted, contract holders will not be paid for that option in 2018, but they will not receive penalties.

Welsh Post Brexit Consultation

The Welsh Government has joined those from Scotland and England in publishing its ideas for supporting agriculture after the UK leaves the European Union.  Following the recent trend for flowery titles, the consultation is called ‘Brexit and Our Land: Securing the Future of Welsh Farming’.  It runs until the 30th October and can be found at – https://beta.gov.wales/sites/default/files/consultations/2018-07/brexit-and-our-land-consultation-document_0.pdf

The proposals are based on the five core principles set out by the Welsh Government back in March.  All current CAP schemes would be replaced by a Land Management Programme which would have two main elements;

  • Economic Resilience Scheme – to promote the efficient production of food and timber
  • Public Goods Scheme – as the name suggests, to pay land managers to deliver public benefits where there is no market mechanism

Turning to the first of these, the Economic Resilience Scheme would not just be for primary producers but would aim to make a difference right along the food (or timber) supply chain.  Although there is only a broad outline at present, funding under this heading looks to be in the form of one-off, or time-limited payments such as grants, loans and guarantees – i.e. there would be no long-term ‘income support’.  Five areas have been highlighted for intervention;

  • increasing market potential – this aims to grow and improve the market for Welsh produce with higher demand/prices flowing down into improved farmgate prices.  It will involve the promotion of the Welsh food ‘brand’ at home and abroad.  There will also be measures to improve the efficiency of the supply chain and greater collaboration
  • improving productivity – will cover ‘on-farm’ improvements such as infrastructure grants, tackling animal health and disease, the application of new technology and data, and farm skills
  • diversification – both capital grants for projects, and support and advice
  • risk management – improving business skills, greater collaboration for better resilience and potentially government initiatives to deal with market volatility
  • knowledge exchange, skills and innovation – which could include a farmer CPD scheme

The Public Goods Scheme is highlighted as offering a ‘new income stream’ for farmers and land managers.  It is specifically highlighted that payment rates need to be higher than the ‘income foregone’ model seen under current CAP agri-environment schemes.  Land managers will be paid on the outcomes they can deliver for society in the following areas;

  • decarbonisation and climate change
  • habitats and ecosystems
  • flood risk reduction
  • air and water quality
  • soil conservation
  • heritage and conservation

Again, there is little more than broad principles, with the scheme still being designed.  However, multi-year contracts look likely, with some sort of premium if groups of land managers work together to deliver ‘scale’ in agreements.

Alongside the support schemes ‘regulatory simplification’ is also promised.  A ‘step change in the advice offer’ is also highlighted to give farmers support as they make important decisions about the direction of their businesses in the post-Brexit landscape.  This looks set to build on the current Farming Connect programme.

In terms of getting to the new system, a transition much like that in England is proposed.  The 2019 year will see the BPS operate as it does currently.  Then, from 2020, direct support will gradually be phased-out with the new arrangements being fully in place by 2025.  There is no detail as yet on how the phasing will be undertaken – but the capping of large payments is mentioned as an option.

Overall, the approach of the Welsh Government looks rather closer to Defra’s plans than those in Scotland.  The difference in the Welsh plans compared to England, however, is more of a balance in supporting an efficient food production sector as well as paying for public goods. 

Global Demand for Food

Global demand for food is set to slow down over the next 10 years.  This is the forecast from the Organisation for Economic Co-operation and Development (OECD) and the UN’s Food & Agriculture Organization (FAO) as published in their Agricultural Outlook 2018-2027.  The slow-down is expected for most types of food, but in particular cereals and meat.  The first time the two organisations produced a similar report, was in 2008 when there was a global food crisis, since then low stocks have been replenished whilst rising incomes in developing markets had boosted demand; this is now expected to increase at a slower rate.

At the launch of the report in Paris on 3rd July, the head of the OECD said ‘for most commodities demand growth will average only a little bit more than growth in world population, for the foreseeable future’, stressing that the current problem is not one of food shortage but of ensuring that food is accessible to the poor.  The FAO chief explained that growth in demand for meat was expected to slow down in China.  One of the main challenges according to the report is improving the sustainability of food production and it emphasises we should use this window of opportunity, whilst stocks of food are strong, to improve way food is produced and marketed.  The OECD Secretary-General also expressed concern over escalating trade tensions, stating international economic cooperation was the ‘only hope, to meet the challenges facing the global trading system today’.

Rented Sector

The Government is seeking views on overcoming the barriers to Landlords offering longer tenancies in the private rented housing sector.  The consultation also invites comments on the proposal for a three-year tenancy with a six month break clause.  Deadline for responses is 26th August.  The full consultation can be found at https://www.gov.uk/government/consultations/overcoming-the-barriers-to-longer-tenancies-in-the-private-rented-sector

UK’s Brexit Negotiating Proposals

On Friday 6th July, the Cabinet finally appeared to reach agreement on its negotiating proposals for the future trading relationship between the UK and the EU.  These proposals are based on 12 key principles (see graphic below) which the Prime Minister had hoped would provide “a precise, responsible and credible basis” for progressing the negotiations.  It could be summarised that these proposals amount to ‘Norway plus’ for goods (including agri-food) and ‘Canada plus’ for services.

Chequers’ Proposals – 12 Key Principles

Some of the key points of relevance to agri-food include;

  • Free trade area for goods – seeks to avoid friction at the border, particularly between Northern Ireland and Ireland where agri-food accounts for almost half of total goods trade. For UK agriculture, this is positive as it would help safeguard key export markets in the EU.
  • Facilitated customs arrangement – seeks to remove needs for customs checks and controls between the UK and the EU “as if a combined customs territory”.  The UK would apply the EU Common External Tariff (CET) for goods destined for the EU-27 with the UK controlling its own tariffs so that it can have an independent trade policy.  Notably, this would become operational in stages as both sides complete the necessary preparations.  This effectively combines the customs partnership and ‘max-fac’ proposals of last year but is realistic to acknowledge that the infrastructure to do this is several years away.  There are concerns around what this would mean for agricultural trade as it will be very difficult for the UK to complete trade deals with other countries without having some increased access for agri-food goods.  The EU will be keen to minimise such scope as this would dilute what is a key export market for Irish, French, Dutch and Danish farmers particularly.
  • Common rulebook for all goods including agri-food – committing by treaty to ongoing harmonisation with EU rules on goods, covering only those necessary to provide frictionless trade at the border.  Following on from previous point, this would have to include agricultural goods meaning that for UK agricultural produce that is traded with the EU-27, EU rules would hold sway.  Some could interpret this as offering scope for divergence to emerge for agricultural produce that is not traded with the EU.  But this would be a minefield.  The capability to effectively manage dual standards in a manner that would satisfy consumer concerns and both EU and non-EU food inspectors is simply not available and would take years to establish.
  • Parliamentary oversight – for incorporation of EU rules into the UK statute with the ability to choose not to do so, recognising that there would be consequences to this. T his likely to cause concern to the EU who will be keen to ensure that potential future uncertainty if Westminster decided not to pass a given EU regulation is minimised.
  • State aid and competition – UK commitment to apply the common rulebook in these contexts would set limits on which agricultural policy tools the UK could adapt in the future.  For instance, tax deposit schemes such as the Australian Farm Management Deposit Scheme do not comply with EU state aid rules.
  • Maintain high regulatory standards – including in terms of consumer and employee rights as well as the environment.  This would mean a continuation of the standards currently in place which once again should help safeguard the UK agricultural industry from third country competition.  A strong environmental focus is already being pursued vigorously by the Defra Secretary.
  • Northern Ireland – the Government believes that these proposals meets its commitments relating to Northern Ireland and Ireland whilst maintaining the constitutional and economic integrity of the UK but would obviate the need for the ‘backstop’ solution envisaged by the EU (i.e. NI remaining part of the EU customs territory) to be brought into effect.
  • Leaving the Common Agricultural Policy – enabling the UK to pursue a domestic agricultural policy which would work in the best interests of the UK.  Here, some questions remain over how a level playing field would be upheld in Northern Ireland where its farmers would be competing directly with Irish farmers still operating under the CAP.  Potentially, the EU Commission’s proposals offering Member States added flexibility in developing national strategic plans in combination with similar flexibility (and funding) at a devolved level for Northern Ireland could minimise any potential policy gaps which could open-up.

The proposals seek to strike a delicate balancing act between Single Market access on the one hand and UK sovereignty on the other.  Of course, the EU has yet to formally respond but the initial signs are that they will be taken seriously by Brussels as a basis for substantive negotiations on the future UK-EU relationship.  As mentioned previously, it is high-time for the London-Brussels negotiations to take centre stage (despite this morning’s event covered by an accompanying article) as both parties have a duty to minimise the immense uncertainties which have emerged for both UK and EU citizens.

The UK Government plans to publish its White Paper setting-out the detail underpinning these proposals later this week.

Brexit Secretary Resigns

The Cabinet’s unity on the Chequers negotiating proposals on Brexit (see accompanying article) lasted barely 48 hours as David Davis resigned as Brexit Secretary on 8th July.  In his resignation letter, he claimed that the proposed Parliamentary controls envisaged by the Prime Minister would end-up being illusory and that he could not continue to serve in the cabinet as a ‘reluctant conscript’.

The Brexit Secretary’s misgivings about the Government’s direction have been well-documented in recent months.  Mr Davies’ frustration grew as Downing Street exerted ever-more direct control over the negotiating process, whilst there were continued to delays to the publication of the DEXEU White Paper which he believed would provide much needed detail on the UK Government’s negotiating position and desired destination.  In recent days, it became increasingly apparent that David Davis’s vision of Brexit was inescapably incompatible with the PM’s and it is therefore unsurprising that he has resigned.  However, it does throw the Government’s supposed united stance and Cabinet collective responsibility into turmoil.

Dominic Raab (Housing Minister) has been announced as the new Brexit Secretary.  Some see Mr Raab as one of the ‘talented new generation’ of Conservatives and he has been touted as a future leader.  His credentials for that particular post are going to be fully tested in the coming months as he negotiates with Mr Barnier.

Earlier, it had been speculated that Michael Gove would replace David Davis.  However, many within Defra, especially those who have been working hard on the Health and Harmony consultation and the Agriculture Bill will no-doubt breathe a sigh of relief because otherwise several months of hard work would have been called into question.  With Parliament due to rise for the summer on 20th July, it looks possible that Michael Gove’s intention to have the Agriculture Bill before the House by the summer recess may not be achieved, particularly given recent events and Mr Gove’s heavy involvement with Number 10 on Brexit.