Prime minister Theresa May’s departmental restructuring, conducted in the wake of last month’s EU referendum result, is sending confusing signals to Brussels, the Institute for Government has warned.
Despite the lack of a firm policy on the trade relationship that the UK will seek once it formally triggers the “Article 50” route to leave the union, IfG programme director Daniel Thornton said the creation of a Department for International Trade suggests that the intention is to leave the EU’s common customs union.
A machinery of government statement from the Cabinet Office following the DIT’s creation on July 13 said the department would be responsible for “preparing for and then negotiating free trade agreements and market access deals with non-EU countries”.
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However, Thornton that while new international trade secretary Liam Fox (pictured) has advocated leaving the EU customs union and the single market, that appaeared to put him at odds with May’s stated aim of avoiding the creation of a land border between Northern Ireland and the Republic of Ireland.
In a blog post this week, Thornton – who served as a senior Downing Street official under former prime minister Tony Blair – said membership of the customs union was a key element of single-market membership.
And he warned that Fox’s comments, coupled with his department’s remit, could be interpreted as sending the message that the UK would opt out of the closest economic ties with the EU.
“UK ministers appear to be on different pages,” he said. “The very fact that Liam Fox and his new department have been tasked with striking new international trade deals seems to suggest that the government does intend to make a clean break from the customs union – because, as a member, building these new relationships would not be possible.
“But the prime minister’s comments in Scotland and Northern Ireland suggest a prioritisation of new trading arrangements that are as close to the status quo as possible. At some point soon, these ambiguous signals will have to be resolved.”
The precise structure and leadership set-up of the new trade department also remains unclear.
This week Civil Service World sought clarification on the status of DIT acting permanent secretary Martin Donnelly, who is also joint permanent secretary at the newly-created Department for Business, Energy and Industrial Strategy.
However a DIT spokesperson said no decisions have yet been taken on the recruitment of a full-time permanent secretary for the department, or on the future of UK Trade and Investment as a stand-alone brand within the DIT. All UKTI staff, previously part of the now-scapped Business, Innovation and Skills department, have moved over to DIT.