Brexit deal threatens UK labour and climate standards, thinktank warns

IPPR says commitments on workers’ rights are weak, but agreement is better than a no-deal outcome

UK workers’ rights and climate and other environmental protections are at serious risk of being eroded under the Brexit trade deal, a leading thinktank has warned.

The Institute for Public Policy Research said that under the agreement struck on Christmas Eve, to be debated by MPs this week, commitments on workers’ rights and environmental standards to maintain fair competition between UK and EU businesses were considerably weaker than expected and would make it hard to prevent standards diverging over time.

The “delicate compromise”, designed to secure UK sovereignty while also ensuring tariff-free trade, will be especially difficult to enforce if the UK fails to keep pace with improved EU levels of labour standards or environmental protection, the thinktank said.

The IPPR’s analysis highlighted three important benefits from the deal, which it argued made the agreement preferable to a no-deal outcome: tariff-free and quota-free trade in goods, continued social security coordination between the UK and the EU, including healthcare coverage, and continued data sharing for security purposes.

There is a protocol with arrangements for the coordination of social security benefits for UK and EU citizens – for example, UK citizens living in the UK and working in the EU, UK citizens temporarily visiting the EU, and UK citizens moving residence to the EU (and vice versa). This covers a range of benefits, including sickness, maternity and pensions.

However, the IPPR said the new process agreed for safeguarding a “level playing field” between UK and EU businesses after Brexit set such a high bar for proof that UK standards could easily be watered down.

Under the agreement, if the UK fails to keep pace on EU levels of labour, social or environmental protection and this affects trade or investment, the EU could take proportionate measures in response, such as introducing tariffs.

But there are strict criteria: any assessment of the impact of divergence must be based on “reliable evidence” and not mere “conjecture or remote possibility”, the agreement states. Even then, proposed “rebalancing measures” – sanctions in the form of tariffs, designed to compensate one side for an unfair disadvantage – could be referred to an arbitration tribunal before they can be introduced if one side requests this.

The arbitration panels are likely to include foreign judges, but the European court of justice will not be involved after pressure from the UK. As a result, the IPPR said, “rebalancing measures are only likely to be used in a rare number of scenarios”.

Ursula von der Leyen, the European commission president, said there would be a review after four years to ensure that the level playing field was working.

Boris Johnson told the Sunday Telegraph that the deal would provide new “legislative and regulatory freedoms to deliver for people who felt left behind”.

However, Marley Morris, the IPPR’s associate director for immigration, trade and EU relations, said: “This thin deal is better than no deal at all, but still creates major trade barriers with our closest neighbour, which will inhibit growth and slow the economic recovery.

“The protections it offers on labour and environmental standards are also surprisingly weak and appear to leave considerable scope for a UK government to weaken EU-derived protections. This leaves protections for workers, climate and the environment at serious risk of being eroded.”