Brexit is not done – and the UK needs to rethink how it manages its relationship with the EU

A new report from UK in a Changing Europe highlights some of the problems with the way the government has managed Brexit since the UK left the EU in 2020. Approaches have developed piecemeal as a result of individual decisions by an ever-changing cast list of ministers. An incoming government should set a more strategic course.  

It will need to work out how to approach the upcoming review of the Trade and Cooperation Agreement, due to start in May 2026, and an array of deadlines which fall the other side of the election. But the UKICE report makes clear that there are bigger questions to address.

Do responsibilities for handling post-Brexit relations sit with the right departments?  

There is little discernible appetite in either the Conservative or Labour parties for more machinery of government changes. But there are options for responsibility changes without reorganising and renaming departments. The first issue is whether to leave the lead on EU issues in the Foreign, Commonwealth and Development Office (FCDO), where it moved overnight when David Frost quit the government in December 2021. The FCDO clearly has a big role on EU relations, and that may increase if a future government majors on more structured defence and security cooperation. But most day-to-day concerns are about detailed regulations, their impact on UK business and on the UK internal market – and the implications for Northern Ireland and on UK wider trade policy – not big vision policy. Responsibility should return to the centre of government as the logical place to connect those moving parts.

Second is whether it is time to remove one of the post-referendum anomalies. In 2016 there was a clear split created by Theresa May. The Department for Exiting the EU (DExEU) would lead on EU negotiations; the Department for International Trade (DIT), while specifically excluded from a role in the UK’s biggest trade deal, would lead on every other trade deal. That always created an incentive for DIT ministers to want the hardest possible Brexit to maximise their flexibility to do new deals. But in the long run it makes no sense to segment trade policy responsibilities in that way.

Does the UK need a clear trade strategy, including its trade relationship with the EU?  

The UK has revealed preferences on trade – but these change with the prime minister and secretary of state. With the EU it was to prioritise regulatory freedom (for GB at least) over market access. For the rest of the world, however, it seemed to be – under the Boris Johnson/Liz Truss tenures – to notch up as many deals as possible, even though some in the cabinet worry how completed deals will impact on farmers. What the UK has never done is set out some clear objectives for its trade policy which takes full account of what that means for its trade relationship with the EU and for the UK internal market. A new government should do that (and give parliament a chance to debate it – along with the objectives for individual trade deals).

Does the government have a clear view on the balance of advantage between alignment with the EU and regulatory divergence?  

One advantage of a clearly defined trade strategy would be to force ministers to address what they want on regulation. The progress of regulatory divergence since Brexit has resembled a random walk as ministers have been buffeted by the competing pressures of ideology and practicality – but this uncertainty, and as a result instability, is making the UK less competitive. A new government needs to give clarity on its approach.

Do ministers have a clear view about the job of regulators and are regulators resourced to do it?  

That lack of strategy has extended to regulators themselves. It is no surprise that regulators could not find requisite expertise overnight and have struggled even with increased funding. But ministers have not been clear what they want regulators – and newly created arm’s length bodies – to do. And although current ministers pay lip service to the merits of independent regulation, their reflex is to executive interference, which can come at a cost of the attractiveness of the UK as a regulatory environment.  

Are there repatriated areas where they can provide greater policy and funding certainty?

The track record of replacement funding schemes is patchy at best. It is easy to put those down to teething troubles, but one thing the EU did offer was predictable seven-year funding cycles. Being nimble has benefits, but it can rapidly turn into dithering and tinkering. Combine that with an instinct to centralise and even some EU-sceptics have found themselves hankering after the stability and clarity of the past. A future government needs to think where and whether it can recreate that certainty.  

How do UK ministers and the devolved governments want to interact with each other ?  

Brexit placed extreme pressures on the relationship between the government in London and the devolved governments – tension that ramped up with the passage of the Internal Market Act which they see (with some justification) as curtailing the extent to which they can use their devolved powers. A new government should think about how it wants to approach managing the post-Brexit relationship – both on domestic regulatory policy but also on trade policy.  

How do ministers propose to manage the continuing complexity of the issues affecting Northern Ireland?

And last, but absolutely not least, any new or returning government needs to keep Northern Ireland front of mind. The failure of the EU’s new Geographic Indications directive to get cross-community consent on a DUP motion before Easter shows that the UK government will repeatedly be forced to make decisions on Northern Ireland. The Safeguarding the Union paper makes commitments about being clear on the impact on Northern Ireland of regulatory changes, and any government is now obliged to keep on top of the future legislative agenda in Brussels to keep the Northern Ireland assembly informed. Careful, consistent anticipation and management will be needed to avoid the need to be sucked into constant last-minute rows.