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More effective EU policy needs Whitehall to be rearranged

The Cabinet Office, Whitehall (Alamy)

Jill Rutter

6 min read

The departments created to deliver Brexit may be gone but there are still major questions about whether Whitehall is equipped to effectively deal with the European Union.

Theresa May’s first act as new prime minister in July 2017 was to create two new Brexit departments: the Department for Exiting the EU to manage Brexit, and the Department for International Trade to secure trade deals with the rest of the world. The latter inherited the trade policy role that the EU had played for the UK since entry in 1973.

Seven years on, neither department exists.

DExEU first lost its lead responsibility for the negotiations when its permanent secretary, Olly Robbins fell out with Secretary of State David Davis and moved to work unambiguously for Theresa May in a revived Europe Unit in the Cabinet Office. Boris Johnson then moved the negotiating into No 10 and terminated DExEU symbolically on the day the UK left the political institutions of the EU on 1 January 2020.

Staff who did not have a department to go back to were moved into the Cabinet Office and ended up working either on planning for the end of the transition or redeployed onto COVID when Whitehall pressed the panic button a few weeks later.

Three years later, Rishi Sunak ended the freestanding trade department, merging it back into a reshaped business department, shorn of its energy and climate and research responsibilities.

That structure looks as though it might now hold. 

No one wants to reinvent DExEU – in that sense, Brexit is done. Many of the trade officials now back in the business department came from there in the first place and there are benefits in bringing trade and business together. It means that the trade department will have potential sectoral interests top of mind, and it means that trade can become part of an industrial strategy if we ever have won. It has had the added impact of finally allowing specialists in the trade department some locus on the trade relationship with the EU, which has until now been treated as totally distinct from.

Meanwhile, it was clear that if Labour wins, Ed Miliband at least would be pushing for a department to go with his shadow ministerial role, and Sunak has saved him the bother of creating a new freestanding department. 

The so-called Brexit opportunities unit has now moved to the business department and merged with the better regulation unit into a new Smarter Regulation Unit which makes sense, as there is no rationale for two competing units. Many in the Department of Energy Security Net Zero seem happy to get their independence back. 

More troubled is the creation of the Department of Science, Innovation and Technology using bits of bits of DCMS and BEIS. Creating a new department out of severed limbs of other ones is always one of the hardest machinery of government changes to make work.

But even though the structures look set, there are still some elements of unfinished business.

The rapid departure of Lord Frost from Johnson’s Cabinet led to transfer of lead responsibility for the relationship with the EU from his unit in the Cabinet Office to the FCDO – the ironic result is that Lord Cameron now finds himself joint chair of the UK-EU Partnership Council.

But the UK has no structured relationship with the EU around the matters that FCDO is responsible for – most of the business of the plethora of specialised committees is trade and regulatory minutiae. FCDO is better at big picture trade-offs than that sort of nitty gritty. 

Moreover, managing the relationship with the EU is like playing a game of multi-dimensional chess.

There is the domestic regulatory angle to think of; the impact on the internal market of GB where the Scots and Welsh governments will have views; the impact on Northern Ireland – indeed the UK Government committed in its “deal” to get the DUP back into power sharing to monitor its own proposals to highlight where they risk creating regulatory divergence. Add in the need to look at the impact as well on other trade deals (the responsibility not of the FCDO but of DBT) and it becomes clear that there is a big coordination task to be done.

Before Brexit, the UK used to have a widely admired system of coordinating its approach to the EU centred on the Cabinet Office. There is a clear case for creating similar machinery again and bringing it close to the teams managing intergovernmental relations (housed in Michael Gove’s department – but not clear whether that persists post-election) and Northern Ireland.

There is another post-Brexit anomaly.

In what looks like a hangover from the Brexit preparations, responsibility for readying the borders also lies in the Cabinet office. That seems to be an active decision to keep it away from the Home Office. But while the short-term task of readying the border might be a project that can be run from the Cabinet Office, it looks like the wrong place long-term.

The lead on the EU relationship becomes a more important issue for a government that seeks change and wants to engage more. It is not clear in current circumstances that a Foreign Secretary, making their mark on the international stage at a time of massive geopolitical tension would want simultaneously to be working through the details of a new sanitary and phytosanitary agreement with the EU – and whoever is in charge would need to be well plugged in to work through the domestic and trade angles of any closer alignment with the EU.

It looks like there could be a strong case for giving coordination back to the Cabinet Office.

That could also be part of filling a gap that many of those we spoke to for our report identified – in having somewhere in government that could bring back together the nexus of issues around domestic and international economic policy in a world driven increasingly by geopolitical tensions and security concerns, but which is trying to change direction radically to meet net zero. They felt that the UK’s apparent inability to work out how it wanted to respond to the US’s Inflation Reduction Act and the EU’s Next Generation programme left the UK vulnerable in a world dominated by power blocs which we are outside. 

Most of the structures may be in place – but there is still a strategic gap on managing the EU relationship and on international economic policy more generally. 

It may fall to a post-election government to decide how it wants to fill it.

Jill Rutter is a Senior Research Fellow at UK in a Changing Europe.

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