The UK Government is currently consulting through a White Paper on how the UK internal market should operate after Brexit. Like much of the conversation about Brexit, it’s a political tussle pretending to be about economics.
Devolution gives the Scottish Parliament and Government powers to legislate on agriculture, environment, animal welfare and many aspects of food. These powers have operated within the framework of EU law, and as we leave the EU some new UK frameworks have to be developed and existing ones strengthened.
So far, so good: but how far those frameworks are developed bottom up and agreed (as happens in the EU) and how far they are decided top down and imposed has been a sticking point since soon after the Brexit vote.
This White Paper is the latest move in this long running game of Go as governments tussle over territory. So what does it say, and what are the implications for food policy in Scotland?
It starts with a non-problem: internal barriers to trade in the UK. As its own figures show, there aren’t any. People move, goods move, services move. With everyone going cashless, we don’t even have to worry about using Ulster or Clydesdale banknotes in other parts of the Union.
While many of the ‘what if’ scenarios suggest Scotland might want to create trade barriers, it’s hard to escape the irony that Scotland and Northern Ireland voted decisively against new barriers to trade with the EU – and that the most likely barriers involve Northern Ireland’s complex position as the lock in the trade canal between the UK and Ireland.
So what imagined trade barriers does the White Paper seek to prevent? In essence: higher standards, pro-environment regulation, policy divergence.
The examples quoted in the document could not be more explicit. Pesticide regulation, food safety requirements, additional information on food labels, minimum pricing, deposit return schemes and procurement requirements are all seen as creating barriers to trade – as all costs and no benefits.
The White Paper sets out two core principles: ‘mutual recognition’ and ‘non-discrimination’.
Mutual recognition and non-discrimination
Mutual recognition is the most obvious threat to standards. It means a product which meets standards in one part of the UK can be sold anywhere in the UK. Chlorinated chicken, GM corn flakes – if a UK government decides at any future date that opening the UK market to these foods (with or without temporary tariffs) is a price worth paying for a trade deal with the US, then they can be sold anywhere in the UK.
This principle applies to a wide range of goods and services, not just food. For example Scotland proposes to ban the sale of diesel and petrol vehicles from 2032. This would be impossible if it came ahead of a UK ban currently scheduled for 2035.
This anchor to the bottom makes it pointless to lobby the Scottish Parliament and Government to introduce higher standards or progressive regulation. That’s bad for democracy and takes us back to pre-1999 when the only way to get change was at Westminster.
Many of the policy levers for delivering Good Food Nation in Scotland – method of production labelling, state aid to support short food chains, tougher regulations for caterers and retailers, more assertive use of public procurement – could not be used by the Scottish Government if they diverged from UK Government measures.
Because the white paper is lacking in details, it’s hard to know what else might get caught up in the non-discrimination principle. Scotland, unlike England, still has the Agricultural Wages Board which guarantees minimum wages and working conditions; it also has different farming subsidies – could either of these be challenged under this principle?
At a more local level, schemes like Preston’s community wealth building which uses procurement to build the local economy could be challenged as indirect discrimination. The White Paper specifically quotes the example of a school in Wales to procuring milk from Wales as a barrier to trade.
At the end of the day, though, this White Paper is about power and politics: who gets to make the rules. The Internal Market proposals will trump existing common frameworks and will constrain the powers of devolved governments to diverge. It proposes a new unelected body to decide whether laws or regulations created in Holyrood are compatible with the ‘internal market’.
It undermines the principle and practice of devolution (which recent polls show is supported by 80% of Scots). This isn’t just bad politics: the focus on deregulation is bad economics and bad policy-making.
The case for regulation
First, regulation drives innovation. Emissions standards make for cleaner air. Building standards make for warmer homes. Restricting antibiotic use makes for smarter farming.
Dave Lewis, ex CEO of Tesco, talking about the urgent need for change in the food system, said recently:
“.. heavy-duty change cannot be left to the market. The right regulatory context, access to capital and incentives to innovate are critical.”
For fintech, there’s Deutche Bank’s digital innovation White Paper :
“The next few years will shape the future of financial technology. This makes conducive and forward-thinking regulation one of the most significant catalysts for unlocking the full benefits of emerging technologies for corporates and financial institutions.”
Reviewing the impacts of environmental regulations on competitiveness, Dechezlepretre (2017) concludes ”there is strong evidence that environmental regulations induce innovation activity in cleaner technologies.”
Second, devolution has been a social innovation test bed. Policies developed by devolved administrations – whether on smoking, or climate change, or deposit return, or the wellbeing of future generations – have rippled out to the rest of the UK.
The EU provides a playing-field that’s level enough to be fair, and flexible enough to allow nations and regions to diverge in policies and regulations.
This White Paper proposes a monochrome UK where the narrow interests of business obliterate any local differences in the values and views of its citizens expressed through their elected representatives. And the White Paper is unapologetic about this:
“Smooth trading arrangements across the UK constitute a key factor in the UK’s ability to implement international trade deals, a building block of the UK’s economic future”.
Nourish has always called for greater food democracy: for people at all levels of government to have more power to shape the way land is used, food is produced, traded, labelled and marketed. These proposals move power and accountability further away from people in Scotland, and should be resisted.