23
Examination of witnesses
Philip Rycroft, Shanker Singham and Anton Spisak.
Q25 The Chair: Good afternoon and welcome back to the Lords European Affairs Committee. We are pursuing our inquiry into the UK-EU reset of relations. I am delighted to welcome a number of new members of our committee who have joined for the first time today: Lord Frost, Lord Whitty, Baroness Winterton and Baroness Suttie; unfortunately, the latter cannot be with us today, but they are our four new members.
I also give a very warm welcome to our three witnesses. We have in the room with us Anton Spisak, who is an associate fellow at the Centre for European Reform and a former official in both the Foreign Office and the Cabinet Office. Online, we have Shanker Singham, the chairman and CEO of Competere Ltd—I hope I pronounced that right—and a former adviser in the Department for International Trade; and Philip Rycroft, a former Permanent Secretary in the Department for Exiting the EU. Everyone is very welcome indeed.
We shall have a transcript after this, which we will of course send to you. We will take an hour or possibly a bit longer if you have that time available, as there is a lot of ground to cover. I will ask you to kick off, perhaps fairly briefly. The other thing I should perhaps say is that you should not all feel that you have to answer each question. You can select questions and, if you do not particularly want to intervene, we are very happy for you to pass to give more time to others.
My opening question to all three of you is: what do you think the Government should seek to achieve, given that they have decided to go for this reset? What would you regard as a successful outcome from this reset? Shall we start online with Philip, perhaps, and then come to Anton and then to Shanker?
Philip Rycroft: Good afternoon, Chair, and good afternoon to the committee. Thank you very much for inviting me along this afternoon. It is an interesting and important question. It is worth going back to basics briefly.
The EU-UK relationship is a fundamental one. The EU is still our major trading partner. Clearly, our defence and security interests are absolutely linked into the European continent. A lot of water has flowed under the bridge since 2016. We are facing substantial disruption to the global trading order. We have a hot war and a revanchist power on Europe’s borders and very unpredictable policy-making now in the US. The interests of the UK and the EU in facing those issues still remain very much aligned, to my mind, so it seems to me that any sensible Government in the UK would be looking to achieve a good, stable and productive relationship with the EU.
The question of how far this Government seek to take that relationship is an interesting one. It is early days still but they have been keener, perhaps, hitherto to stress their red lines—what they will not do: go back into the single market and the customs union—than they have been to outline what they see as the long-term future relationship with the EU.
That is a very big question. I am not sure that this Government will get to it any time soon. I personally believe that that requires a deep national conversation; indeed, I am not sure that we are ready as a nation to have that conversation. What we will see over the next little while, I think, will be a relatively curtailed ambition. It will be useful and important, but it will not presage a fundamental change in the relationship that we have. As I say, there will be progress, hopefully, but we will see how far that goes.
I have one final thought: the notion of a reset can be slightly misleading, in that it implies that we will go from state A to state B and that is it. In fact, this relationship has always been, and will always be, a relationship that evolves and changes over time. What happens over the next year or two will not be the end of the story by any means. It will be part of that continuum of evolution over the longer term.
The Chair: I think we said in our call for evidence that this is a moving target, as you say. Mr Spisak, do you want to pick up from there?
Anton Spisak: Thank you very much for having me today. I would say that an initial goal of the reset was definitely to inject more stability, confidence and trust into this relationship, which has really been hindered by low trust in the past couple of years. In many ways, this goal has been achieved by the Government, I think. All the initial steps that the Government have decided to take in the past six months—with the Prime Minister going to the European Council dinner last night; with the Foreign Secretary deciding to establish a new foreign policy dialogue; and with the decision to set up a new political summit between the EU leadership and the Prime Minister—are constructive steps that have really helped improve the political climate between the European Union and the UK Government in those past six months. The real question is: what will happen now with the reset? Are the two sides ready and prepared to translate some of that improvement in the political climate into more concrete commitments, including more concrete policy commitments?
There is now a real window of opportunity between this moment—last night—and 19 May, when the new summit will take place, where the two sides should really step up and explore a number of strategic interests that they have in common. One of those is to discuss, in concrete terms, how they can step up co-operation on security and defence in the light of a change of policy in the US Administration and the new risks that are coming from Washington DC. Secondly, they should really explore new economic security risks, which are something that have really emerged in the past couple of years. Lastly, they should also try to put the relationship on a more stable footing with a number of measures that can be taken to stabilise some of the aspects of the trade and co-operation agreement and to deepen co-operation. I am sure that we can get into the details of all these different aspects in a later discussion.
The Chair: We will definitely tease out all things those in questions. Mr Singham, please.
Shanker Singham: Thank you very much, Chair, and thank you to the committee. I want to focus more on the economic relationship between the UK and the EU. Here, what I think the Government need to be guided by is, first of all, not viewing the relationship with the EU in isolation. It is part of a whole set of relationships that the UK has around the world, and it needs to be viewed in that light. In that context, there are a couple of key constraints or operating principles, if you will: one is the maintenance of the UK’s independent trade policy; and the second is the maintenance of the UK’s domestic regulatory autonomy, so that it can improve its regulatory environment. Both of those are areas where you can find economic growth and GDP per capita gains.
Subject to those constraints, I would suggest to the Government that a good outcome here, on the economic partnership, would be to do everything possible to have as good a trading relationship with the EU as you can get without violating those constraints. Within that, there is quite a lot that you can do. I am sure that we will get into this later on, but there is certainly a lot that you can do with regard to the improvement of the TCA. There are areas of the TCA, such as services and the mutual recognition of goods, that could be improved.
There are a lot of unilateral things that the UK can do to improve the flow of imports into the UK. We should remember that imports are as important as exports from the UK to the EU. Our exports rely on raw material imports and so on, so you have to view both of those things together. We can also improve UK border control measures. There are many things that the EU is advancing on, in particular things like its customs reform and “Trust and Check”—its trusted trader scheme—where it is possible for the UK and the EU to have a better set of relationships.
Obviously—I am sure that we will get into this as well—there are certain aspects of the relationship regarding Northern Ireland that could be improved. We have the Windsor Framework coming into full implementation at the end of March, but there are things that can be improved.
The UK must also recognise the much-changed environment in the past month, with the new US Administration. In that context, some of the things that we might have thought were settled are changing; for example, the EU’s regulatory system is changing and is a moving target. We have to be conscious of that triangular relationship between the US, the EU and the UK, as well as of our role in it. I will be happy to explore all those things in greater detail later on.
The Chair: Thank you very much. The one area that we will probably not dive deeply into is Northern Ireland—because we now have a Northern Ireland Committee, which will take the lead on that, and we have so much on our plate in this inquiry—but we are well launched, I think.
Q26 Lord Jackson of Peterborough: Thank you, Chair. What is your assessment of the Government’s reset policy so far? Is it ambitious enough? Is there merit to the criticism that it is not moving fast enough and has unclear objectives? I read the very interesting article by Mr Spisak on the reset. In it, he partly posits a binary choice between the US and the EU. What specifically had you in mind, Mr Spisak, when you wrote that?
Anton Spisak: Thank you for that question. On the first part of the question—the general approach that the Government have taken to the reset—I would say that the initial focus on confidence-building was the right one, rather than moving straight into the negotiations. There was always a risk that the European Commission would just dismiss any ideas for improvements as being unrealistic at that stage. Also, given the electoral cycle in the EU, EU institutions were in flux in the second half of last year so it was difficult to engage on substance.
I think that now is the time to engage in substance. My article suggests a number of areas where this could be done, including on security and defence through a new security and defence partnership. An initial step could be a non-binding declaration, but that could then be built into a more formal set of arrangements. On economic security, I think that this is currently an underdeveloped area of the relationship that deserves greater attention.
The second half of the question is where we will get into all the interesting dynamics that are now emerging between the US, the EU and the UK. It is fair to say that there is a great deal of uncertainty and unpredictability coming from Washington DC. We have seen, in just the past couple of days, the decisions of President Trump to impose tariffs on some of the closest allies of the United States but then to suspend those tariffs—or at least pause them for the time being.
Depending on what comes from the US, an interesting dilemma will be created for the Labour Government. I do not think it inconceivable that the Trump Administration might try to pull the UK away from the EU, which it sees as an outdated, overly bureaucratic institution, and try to create a set of incentives for the UK Government to come closer to the economic agenda of the US Administration.
Of course, all will then depend on the detail of the offer. There are some ideas floating around Washington DC about potentially offering the United Kingdom accession to the USMCA deal, which will be up for renegotiation next year. There are ideas about extending membership of that arrangement to other countries beyond Mexico and Canada. This would, in many ways, be a game-changer for the UK Government in thinking about how to construct post-Brexit trading relationships. Again, a lot depends on the policy specifics of what that would entail but, if it were to happen, it would potentially create a significant point of divergence between the approaches that the Government and the US are taking towards the European Union.
I would caveat all this by saying that we just do not know at this point, but it will be a really interesting time to think about the set of strategic interests that the UK has and that we have together, as the western economic alliance—not only with the US but with the European Union and other partners.
Lord Jackson of Peterborough: Thank you. That is very helpful.
The Chair: Do either of the other witnesses want to comment on Lord Jackson’s question?
Shanker Singham: I would just say one thing on the choice that we may or may not have. I tend to agree with the Prime Minister that it is not a choice between the US and the EU. I think that the Government should be wary of being put in a position of making false choices. There is a choice to be made, but it is a choice that is perhaps different from what many people think is the choice. There is a view that you have these three big regulatory blocs—the US, the EU and China—and that, as a third country, we must make a choice between them. I do not think that.
I think that the choice is between two operating systems. One is an operating system based on mutual recognition, equivalence, adequacy and those kinds of things. That is the relationship that we currently have under the TCA with the EU, which could be expanded and deepened in terms of mutual recognition and so on. I think that that is the kind of agreement the US will probably put before the UK. It may well be some sort of USMCA accession. I think that it is more likely to be a bilateral offer agreement but that it will be heavily based on the text of the USMCA—possibly even simply the text of the USMCA, as amended, because Trump is in the process of probably using tariffs with Canada and Mexico to renegotiate the USMCA. Where we will be challenged and there will be difficulty, I think, is that the rules of origin in that USMCA offer from the US will be very tight and very illiberal.
The question then becomes: what does the UK do in response? That is why I have recommended—the Trade Facilitation Commission, headed up by your colleague, Lord Agnew, has also recommended this—that the UK join the PEM convention. It is, in essence, a rule of origin convention that allows you to cumulate across your European and North African supply chains. I see no problem with doing both that and a USMCA with quite restrictive rules of origin. In some ways, that combination could drive manufacturing into the UK, which would not be a bad outcome.
So, there is not a choice between the EU and the US here. The question is: are you going to follow the regulatory, mutual recognition kind of approach, with regulatory competition and recognition, or will you choose some sort of alignment to EU rules? Alignment to EU rules prevents you improving your own regulatory system and damages your independent trade policy. It does not achieve much in terms of the paperwork that would still be required because you are outside the customs union and the internal market. The better choice is to follow the TCA and trade agreement model, which we are also part of through the CPTPP.
I will close by saying something about the CPTPP, to which we have obviously already signed up. When President Trump pulled the US out of the TPP in the first Trump Administration, he simultaneously renegotiated NAFTA into the USMCA by, in large measure, porting over a number of the chapters from the TPP. So we have already signed a lot of the chapters that would be in the US offer, which puts the UK in quite a strong position in this process going forward.
The Chair: There were a lot of issues there. We have a separate session next week to dig even deeper into the trade issues, but thank you so much for that.
Q27 Lord Stirrup: I would like to probe further this issue of red lines; I shall take it in three parts, if I may. First, will there be UK red lines? It seems clear from what the Government have said that there will. The issue of non-membership of the single market and the customs union seems fairly clear cut, but the free movement of people is perhaps a little more nebulous. Have the Government left themselves any wiggle room in that area, particularly for young people?
The second dimension of the question is: should there be red lines, for example on security and defence? A recently published article, which Mr Spisak co-authored, said, “The EU needs to move beyond conventional frameworks and recognise the UK as a strategic partner, rather than an ordinary third country”. Well, yes, but this committee has heard evidence that that is extremely unlikely. Should that be a red line for the UK—that is, if it is to participate in these things, it must be a strategic partner, given that there are many other non-specific EU routes for such co-operation? What about fishing for sand-eels? Should that be a red line in terms of environmental issues?
On the third dimension, the question is: what is the likely impact of any of these red lines on the actual negotiation process?
The Chair: We should perhaps give Mr Rycroft the first shot at that. It is a risk of being online that you always go third.
Philip Rycroft: There is a lot wrapped up in that. The big red lines are clear, as you have intimated: not going back into the single market and the customs union. That reflects the political reality of where we are at; whether that should pertain in the long term is a debate for another day.
Wrapped up in that is the question you ask about freedom of movement, particularly in respect of youth mobility. It is a really interesting question. My personal view is that the Government have made a big strategic mistake by seeming to equate youth mobility with freedom of movement. If they do concede on youth mobility now, there will be lots out there saying that they are bending to the will of the EU and that this is a precursor to going back to freedom of movement. Of course, it is not: it is time-limited, visa-driven, reciprocal and, in my view, a very good thing, not just for youngsters in the EU but for youngsters in the UK as well. It is a big ask for the EU; I hope that the Government respond to that sensibly in terms of achieving some of their other goals.
As for setting out other red lines at this stage, personally, I have rather a lot of empathy for the sand-eels, so I hope that that issue does become a red line for the sake of the puffins and other sea-birds. More seriously, this is going to be a complex, multi-part negotiation. As I said earlier on, it is not going to conclude in May this year. It is in effect a continual negotiation from here for ever, just as the Swiss have found over the past few decades. So it seems to me that the Government need to be very careful about spraying red lines around at this stage. They should be canny and agile in their negotiating strategy.
It is worth saying that we also have to be cognisant of where the other side is coming from. Lord Jackson asked about ambition. Of course the UK should be ambitious, but that ambition must be framed in what is going to be, or is likely to be, achievable from the EU perspective. The EU is, as we know, a tough negotiator. It negotiates in its own interests. The TCA, because of its emphasis on goods and because of the surplus in trade that the EU has with the UK on goods, works pretty well for the EU, so it is not going to be in a huge rush to improve it just because the UK is asking. As Anton described it, it is about building up that trust over time, being seen as good neighbours and building on defence and security in particular; personally, I think that that is the most fruitful line to take. All of that will, it seems to me, build up over time a context where we may get more out of the EU, with it recognising that our asks are ultimately good for it as well. We need to be a bit wary of the red lines, however; the Government have made a particular misstep by making youth mobility seem like a red line, which at some point they will have to step over.
Anton Spisak: I do think that there is quite a bit of room for manoeuvre within those red lines. I do not think that those red lines are as set in stone as they may seem. Let me give you a thought experiment as an example. In December the European Commission concluded its agreement with Switzerland; it is something that it has been negotiating for many years. In that agreement—it is hugely significant for the UK-EU reset, by the way, but we can get on to that in a minute—it agreed, in essence, to allow Swiss product standards to be recognised as equivalent to the EU’s product standards across a range of goods categories. It also agreed a common food safety area based on harmonisation with EU law.
That harmonisation is not based on traditional dynamic alignment as we know it from the EU system. It is based on a similar system to the one that is part of the Northern Ireland arrangement: the Windsor Framework. Alignment happens through decisions of the Joint Committee rather than dynamically, and it also does not include direct jurisdiction for the European Court of Justice; it includes a role for the independent arbitration panel, with an option to refer those questions to the European Court of Justice where matters of EU law are involved. Would this fall under the Government’s red line of not seeking membership of the EU single market or not? That is a question for the Government to ask. In my view, it would not, because we are not talking about formal membership of the single market, but it would clearly be a substantial improvement on the status quo and a substantial change to the nature of that trading relationship; it would put the UK much closer to, and partially integrate it into, the single market, though only for goods and not for services. The agreement is still pending ratification, but that is just a little thought experiment for you all and for the Government to think about in the light of this change that has happened on the EU side in the past couple of months.
What I would say in terms of the EU’s interests in all of this is that the European Commission has gone through a process of formulating its own interests in the past couple of months. There is not anything surprising in that list of interests on the offensive side. The Commission talks about improving trade in energy and updating the fisheries arrangements, which are due for renewal in June 2026 in any case. It also includes things like improving mobility arrangements for young people, and so on. None of that is new to the UK side; it has been on the table for quite some time.
On the defensive side, again, it emphasises the need to protect the integrity of the single market—that phrase has been talked about a lot in the past couple of years—and to avoid selective participation in the single market, which would seem to preclude an arrangement like the one the Commission has just concluded with the Swiss. At the same time, that precedent has now been set by the Commission and by the team of negotiators, who are, by the way, also leading on the UK relationship. All of this is adding a new dynamic to this negotiation—one that is hugely consequential for the reset.
The Chair: I am just looking at the time; we had better move on. I again welcome Lord Frost to the committee.
Q28 Lord Frost: Thanks, Chair. The Government have—as far as we can tell, anyway—identified three priority negotiating objectives for the trade and mobility area, though it does slightly depend on which day you ask them. As far as we can tell, the three areas were an SPS agreement, help for touring artists and MRPQ—the mutual recognition of professional qualifications. How much difference do you think these things will make to the economic relationship and trade with the EU, if any? Maybe this is one for Shanker to start off with.
Shanker Singham: Going back to the red lines, I would say that you have to get behind the customs union and the single market and understand why those are red lines. The only two economic red lines, for me, would be on independent trade policy and on domestic regulatory autonomy. You would look at everything through that lens.
In looking at the mutual recognition of professional qualifications through that lens, for example, you would say that it does not harm your trade policy or affect your domestic regulatory autonomy; therefore, it is something that you would want to do. To echo what Philip said about the youth mobility scheme, these are the sorts of things that can be done, that will be good for both the EU and UK economies, and that do not implicate those red lines.
On the other hand, an SPS agreement would have to be looked at very carefully. If it is along the model of the EU-New Zealand veterinary agreement, which is a mutual recognition agreement allowing different specific regulations as long as the ultimate outcome is objectively the same—a WTO kind of standard—then I would have no concern. On the other hand, something that leads you towards dynamic alignment or harmonisation, or something like that, does have an effect on your regulatory autonomy.
I want to say something about why the regulatory piece is so important, as this is sometimes lost in the discussion. There are three regulatory costs. Businesses generally recognise two of them. One is the cost of compliance. Nobody wants to comply with burdensome regulation so, obviously, you want your regulatory system to be the least burdensome that is possible. There is also the cost of divergence, which is a very operative thing in the context of the UK and the EU diverging.
The biggest regulatory cost of all is the cost of regulation that has a damaging effect on competition. Our economic models and studies, and my Growth Commission’s models, have suggested that that cost is three to four times bigger than the cost of your traditional trade barrier at the border.
It very much depends on what system of regulation you are aligning to. If you are aligning to something that is very pro-competitive, that cost would be small and your divergence cost would be the most important thing. If you are aligning to something that is very anti-competitive, your divergence cost is much smaller and you would want to do something different. In the current context, the EU itself recognises that its regulatory system is damaging to competition. Various organisations have shown the cost of this—some 3% of EU GDP per capita—and we have the Draghi report and so on.
If the European regulatory system changes—that may be starting, with regard to the impact of the US Administration and what they are doing—we might want to revisit this at some point in the future, but, at the moment, regulatory autonomy is very important. Simply having it is not enough, though. You have to do something with it. You have to improve your regulatory system, in general, and continue to do that.
The Chair: Who would like to follow up on that?
Philip Rycroft: I am happy to come in. The three areas identified are important in their own right but, clearly, they are not economic game-shifters. Of the three of them, the SPS deal probably has the biggest potential impact.
I will touch briefly on touring musicians. This is just part of the joy of life, is it not—the ability to get artists and creative folk about the place without the sort of hassles that they face at the moment. This is not hugely economically important but, symbolically, it is useful to have. I know that the EU has jibbed at it; I hope that it will change its mind.
It is interesting that the services side of the UK economy is doing pretty well in terms of exports, particularly in unregulated services. MRPQ might be useful for legal financial services, such as architects and so on, but, for some of the services that are doing pretty well—on the consultancy, computer and IT side of things, for example—it is perhaps not that relevant. It will be useful and a good thing to have if we can get it, but it will be hard fought. There will be a lot of concern about the competitive threat to the provider of services in individual member states.
The SPS thing is the most interesting and most economically significant. If we could do something to relieve the burdens that UK exporters are facing in the food and drink sphere, that would be great. Let us not forget that we have a form of unilateral disarmament at the moment where the UK border is still not, to memory, fully functioning; UK exporters have faced those burdens from day one, pretty much. There were stories over the weekend about cheese exporters and the number of processes they have to go through now, which they never had to do before.
The point that Shanker makes is absolutely fundamental. What is the resolution of this? Is it some sort of mutual recognition, or is it dynamic alignment? I think that that will be the really tough negotiating question that the Government will face. On dynamic alignment, let us not forget that that requires the UK Parliament to follow the twists and turns in SPS law coming out of the EU, pretty much on a day-to-day basis. There is a huge volume of legislation that is difficult and controversial. If a mutual recognition route is available, the Government should push hard for it.
I will make one final, quick point on this. New Zealand represents 1% or 2% of the EU’s food trade. The UK is closer to 10%, and we are physically a lot closer as well. So, whether or not the EU would accept a New Zealand-like deal for the UK is a big issue. There will be hard negotiating yards for the UK to get an outcome that allows for mutual recognition rather than dynamic alignment.
The Chair: We will move on at this point; we can always come back to these issues as we go through.
Q29 The Duke of Wellington: Following on from that incredibly interesting series of answers, as Lord Frost said, the Government have stated that they are seeking agreements on such things as SPS, touring artists and the mutual recognition of professional qualifications. What, in the opinion of the three of you, are the other areas of the economic relationship that the Government ought to try to negotiate? Perhaps Mr Rycroft could respond initially.
Philip Rycroft: I will come back on this briefly as I am sure that both Anton and Shanker will have views on it. As they have said, there are other areas that the Government could look at. It will be a bit about assessing where the ambition of the EU lies and what is the negotiating art of the possible.
I declare an interest here as a non-executive director of the UK Accreditation Service. One overarching area, which picks up Shanker's theme of mutual recognition, is the mutual recognition of conformity assessment. It is basically about saying, “We trust your accreditation body to ensure that your conformity assessment bodies do their work well. Therefore, if they say that a product conforms to an appropriate standard, we believe that assessment”. This would avoid UK companies—and, indeed, EU companies—having to do the evaluation of a product twice, once for the UK market and once for the EU market. That sort of thing, which is scalable and does not require dynamic alignment, is in the interest of EU firms as well as that of UK firms. It is a bit technical, a bit behind the scenes and not that exciting, but it is really important for economic dynamism and trade between the two parties. It is the sort of thing that I hope the Government will start to put a bit of negotiating oomph into.
As you extend out from that, step by step—not frightening the horses and not seeming to be getting into the single market through a back door—I think that it could be a productive approach to take. However, this will only unroll over time; you are not going to get there in one bound.
The Chair: Before others respond, can I just ask whether you have any thoughts on another area that has been in the press recently: aligning with the emissions trading system and the carbon border adjustment mechanism? Are those also valuable things that the Government should look at?
Anton Spisak: Going back to the initial question from Lord Frost, the three areas that the Government identified are important but, equally, I worry that they are relatively marginal in the broader context of the UK-EU relationship. Also, they seem to mask a certain lack of strategic vision on the overall relationship and the broader question of how Europe fits into the Government’s strategy for growth, trade and industrial policy.
If I were to prioritise areas that should guide the Europe strategy for the next couple of years, I would pick three. One is improving trade in goods, which is enormously important in the light of what has happened to UK trade and economic performance since the pandemic; I say “since the pandemic” because it is difficult to disentangle the effects of the pandemic and Brexit. We know that what has happened to UK trade openness is striking and concerning. Based on the latest figures, since the last quarter of 2019, just before the pandemic, UK trade openness has fallen by 6%. If we compare this to G7 countries—I am using the G7 average—in the same time, it grew by 7%; that is a difference of 13 percentage points in what has happened to UK trade in the past five years.
This is almost exclusively driven by a fall in goods trade because services trade has held up in this time; that is really remarkable, by the way, and deserves a whole other discussion. There is a serious problem on the goods side that relates to trade with not only the European Union but non-European countries: the UK is an outlier when it comes to this trade performance, relative to other similar economies. I am surprised that this fall in trade openness is not linked to the growth story that we tell about what has happened to the UK economy in the past couple of years because relative decline in trade openness seems to be a real drag on UK growth, at least in the short term. It deserves a far greater focus in the Government’s growth strategy than there has been to date.
If this is the reality that we face, the Government should use the reset to come as close as possible to the single market in goods. It should explore, as Philip suggested, mutual recognition arrangements for product standards across a range of areas. It should also explore an SPS agreement, given that the percentage of agri-food trade in overall trade with the EU is actually very small. The relative loss of regulatory autonomy would be quite small in exchange for quite a big gain in the reduction of regulatory burdens—but that is my personal view. This is one area that the Government should explore.
Lastly, there is clearly a space to explore something closer on energy trade, where there remain a number of issues that were left unresolved in the TCA, including the trading of electricity. The question of the linkage of the emission trading systems is enormously important not only in its own right but in the light of the application of the carbon border adjustment mechanism, which will come into effect soon and will potentially see new tariffs on British exports into the EU. There is merit in linking to the ETS. Again, there are precedents; for example, the Swiss have a sort of associate membership of the ETS. They align to it in domestic law, in essence, but they are not formally part of the emission trading system. So there are some interesting precedents to explore there; it should be a priority for the Government to look at those.
The Chair: I am going to play my role as Chair and say that we probably need to accelerate a bit if we are going to get through in a reasonable time, but I do not want to prevent Mr Singham commenting.
Shanker Singham: I can do so fairly quickly. In terms of other things that the UK can do, beyond what we talked about, I mentioned the PEM convention before. That would be useful for the cumulation of supply chains and would have some effect. There is no silver bullet; you need to do lots of different things. I agree with Philip that mutual recognition of conformity assessment and market surveillance is important, but I would go further. I would use the precedent of the best mutual recognition agreement: the Trans-Tasman Mutual Recognition Agreement between New Zealand and Australia. It contains not only conformity assessment and market surveillance but underlying product market regulation, which is the holy grail of mutual recognition. You should ask for these things; you may not get them, but you should certainly ask for them.
There are quite a lot of other things that we can do unilaterally. We have unilaterally recognised medicines approvals from the US, the EU and Japan. In other words, with an approval from one of those regulatory agencies, you can put a product on the market in the UK without having to get UK regulatory approval. You could also do these kinds of things—this kind of unilateral recognition—in the SPS area. The UK has a trade deficit with the EU on SPS goods; we import a lot more than we export. Making those imports easier through a unilateral recognition of SPS would allow you to simplify your import border controls because you would be requiring importers only to prove that the goods were EU-origin. There is a lot there that could be done. Each of these things gives you a little benefit; you add up all the benefits and you start to get a significant contribution to growth.
The problem with SPS and alignment agreements is that they cut your trade policy and your regulatory autonomy because the one area where EU regulation is probably the most restrictive is the SPS area. Therefore, it is the area that most of our trading partners want to see progress on. What the US is doing is that the Administration have basically issued an injunction, through an executive order, to all the agencies to look at unfair trade practices in foreign countries. That will be the basis of their tariff policy going forward after April, and SPS will certainly be right in the crosshairs. We must do what we can on SPS, but not do anything that will have implications for our ability to do gene editing and all the other things that are tremendously beneficial for our agricultural sector. Those are some of the things that we could certainly advance on immediately.
The Chair: Well, that is a pretty extensive list from the three of you for us to get our teeth into.
Q30 Baroness Hayter of Kentish Town: I should avoid commenting but let us say that my former committee, the International Agreements Committee, was perhaps not quite as pleased with the New Zealand-Australia agreement on mutual recognition as has been suggested. My question has already been covered to some extent but, just in case, I will ask it. Is there anything more you want to add about how the Government can best join up their two main thrusts at the moment? One is the EU reset; the other is the growth objective. How can the EU reset sit with the growth objective, which obviously includes foreign direct investment and other things? Also, how does the EU reset sit with the Government’s wider international objectives, such as solidarity, development, human rights and trade—the other things that they are getting up to?
Anton Spisak: Perhaps I can expand on some of the points that I made earlier. It is really important to link the fall in trade openness in the past couple of years with the growth agenda; that seems to me to be one crucial, missing part of the Government’s strategy at present. Equally, we are in a very difficult time internationally where some of the geopolitical and geo-economic forces will make it far more difficult to trade freely, including with our closest partners and allies; those would traditionally have been the US and the EU. We are also seeing a real rise in protectionist measures across the board.
The UK, again, is a bit of an outlier in not really having formulated its economic security strategy to date even though a lot of other western countries, including the United States and the EU—as well as Japan and South Korea—have laid down a set of principles guiding economic security in this day and age. More clarity on the economic security strategy that the Government are using would be helpful, as would closer co-ordination with the European Union on things such as trade defence instruments, export controls and foreign direct investment.
Co-ordination on all those areas would be beneficial because, at present, they are largely unaddressed in the relationship. Getting people in the same room to discuss these things on a regular basis and building a regular cadence of meetings—especially at this moment in time when quite a lot is happening internationally—would really help. In the big picture, there is a bit of tension between trying to do these things and the global headwinds that the Government face, but it will be important to link all these things into a coherent strategy.
Ultimately, the effectiveness of any strategy does not depend on whether it is written in a polished document or drafted somewhere in Whitehall. It depends on whether there is shared understanding across the Cabinet and the Government on the sets of priorities. I think that linking growth, trade and Europe should be one of them.
The Chair: Would either of our online witnesses like to comment further?
Philip Rycroft: Can I come in briefly? Clearly, growth absolutely must be the priority for this Government—indeed, for any Government. Looking at productivity growth over time, the UK has been trundling along with very low productivity growth, hence the problems with raising money for public services and so on.
It has always been the case, as regards what you need to do to drive growth in the UK economy, that most of it has been tangential to our obligations coming from the EU. When it comes to stuff like planning, infrastructure, investment, research and development skills, all of this is emerging out of a domestic policy context, and the Government are rightly focusing on that. Clearly, access to the EU market was important in that space in terms of opportunities for trade and so on, but the main drivers of growth are around domestic policy.
The linkage now between the growth agenda and the broader international agenda—not just the reset of relations with the EU but beyond—is about confidence for businesses. It is about stability. It is about regulatory certainty. It is about the attractiveness of the UK as a destination for investment.
As everybody has pointed out, this is a difficult road that the Government will have to walk. They will have to box very cleverly between their relationship with the EU and their relationship with the US. This is one of the consequences of coming out of the EU: the UK is no longer part of one of the big three trade blocs in the world, and there is a risk that we will get ground small between them.
Coming back to what we were discussing earlier on, the Government will be loathe—rightly so—to have to make a choice between those trade blocs. Let us hope that they are not forced to do so. In my view, what they should be doing all the time is thinking about what the steps that they take will do to generate confidence in the UK as a place to do business. That will be fundamental, ultimately, to their growth agenda.
The Chair: Thank you very much. We will move on to Baroness Anelay.
Q31 Baroness Anelay of St Johns: Thank you. This afternoon, we have heard clear evidence about the complexity of the issues that are part of the reset negotiations. I want to look now at the machinery of government, which is providing those negotiators and that negotiating stance for the UK. What do our witnesses consider to be the challenges of managing any negotiation with the EU that spans multiple departments of government and policy areas, including both the devolved and reserved ones? How do you assess any progress that the Government have made so far? Perhaps Philip Rycroft might want to start.
Philip Rycroft: You are asking very big questions today. That is another huge question. Clearly, as you are aware, there is a long history of the management of EU matters in the UK Government. I was the last joint chair of the interface between what was once UKRep and the Cabinet Office; the last manifestation of that was the Rycroft-Barrow meeting as part of the co-ordination mechanisms in Whitehall.
Basically, in my view, the Government will have to find their way back into that space. How do you co-ordinate effectively? A theme running through everything that we have been discussing today is the way in which EU issues permeate into so much policy thinking in a UK context. To cut to the chase, it is sensible that the responsibility for that co-ordination has been brought back into the Cabinet Office from the FCDO. The Foreign Office never had—begging your pardon, Chair—the capability to delve deep into the many nooks and crannies of industrial and economic policy that EU issues required, and that remains the case today.
The other thing underpinning this is that the Cabinet Office is one of the three centres of government that has clout over the rest. Re-establishing something along the lines of the old European and Global Issues Secretariat is the right thing to do; hopefully, that will power up the Government on this. I have just one caveat: the UK has always struggled a bit to develop the right sort of expertise on European issues within Whitehall and the devolved Governments. That will not get any easier over the next little while, and the UK is going to have to work very hard to ensure that it grows and incentivises that expertise in Whitehall.
You mentioned the relationship with the devolved Governments. The whole Brexit saga was not kind to the sustaining of this union. There is a long, sorry story there, which I will not go through today. The long and short of it is that a Government coming in and seeking to reset relations not just with the EU but, to some extent, with the devolved Governments must utilise mechanisms in a way that reframes intergovernmental relations; that is the subject of a big inquiry by one of your colleague committees, the Constitution Committee. It has to infuse those new structures with a spirit of collaboration and co-operation with the devolved Governments to ensure that their views are taken into account on a day-to-day basis.
Make no bones about it: that is not an easy thing for Whitehall to do. It is difficult, it takes time and it requires trusting the devolved Governments. That trust is not always there but it is critical if you want people in Scotland, Wales and Northern Ireland to believe that their interests are being advanced as the UK thinks through its future relationship with the EU. That understanding and trust were seriously damaged, in the case of Scotland and Northern Ireland, by the Brexit process, given the way in which those parts of the UK voted. This is a fundamental challenge for the Government to pick up.
The Chair: Those were some challenging remarks about the Foreign Office, in view of the fact that two former officials of the Foreign Office are on this committee, but I thank you. Again, bearing in mind the time, does anybody have any additional, urgent points to make?
Shanker Singham: Yes, I have one quick follow-up. One of the challenges in the past, which has occurred totally naturally but has nevertheless been a problem, is the bifurcation and siloing of EU negotiation policy from rest-of-world negotiation.
The US, in particular, is critical now. That is a real tectonic shift. In the machinery of government, you want a single mind over all of this. If the goals and critical growth mission of the Government concern how to increase household income or UK GDP per capita, you cannot ignore these other forces coming from the US and China. If you had that kind of negotiating apparatus, wherever it belongs—it may be in the Cabinet Office—it needs to be a single mind. Both the UK and the EU will be under a lot of pressure, from the US, on our policy on China. Anton was talking about that in terms of trade defence measures; there is a lot that the US, the UK and the EU could agree in terms of an overall approach to China. That will probably be the biggest single trade issue coming at us.
You, Chair, mentioned the CBAM. We have to look at European member states that are pushing back on a lot of the EU pipeline. Going forward, I think you will see—not just from the EU but from Canada—that the response to some of the Trump uncertainty is a real driver to making your own economy more competitive. We already have France and certain elements in Germany talking about delaying some of the EU pipeline. My Growth Commission did a study on the effect of the UK joining the CBAM; it is probably a cost of £700 in GDP per capita in the UK. There is a whole range of the EU pipeline that we should not rush to replicate because of the damaging effect that it will have on UK GDP per capita.
The core answer is that a single mind over all of these issues is really important, because there are so many trade-offs and it is such a moving target.
The Chair: It will be interesting for the committee to investigate whether the creation of this Michael Ellam job will put at the heart of the Cabinet Office somebody who can look at trade policy across the board, as well as in the EU. We hope to hear from him at some point. I turn to Lord Whitty; again, I welcome him to the committee.
Q32 Lord Whitty: Thank you. In a sense, you have started to answer my question about what difference the changes to this and its location in the Cabinet Office will make. You have indicated that it needs to go further, but do you advise of any other changes in this area? My recollection from years back is that, for example, in Norway, there was a single point for dealing with the EU. For institutions in Switzerland, there was not; Switzerland therefore had a hundred or so treaties with the EU. In addition, we have talked entirely about economic matters. Do you assume that the changes in Whitehall and the focus in the Cabinet Office, which you want strengthened, also apply to areas such as the environmental and human rights agendas?
The Chair: Anton, you have passed on one or two questions.
Anton Spisak: I have one comment in addition to what has been said already. There is a real need to invest in resources in Brussels. I know that this may seem a little counterintuitive, in that the UK has obviously left the European Union, but the job of influencing the EU from the outside is much harder than when you are sitting in the room. The resources you need are one common denominator: if you look at the Norwegian mission, the Swiss mission and so on, they have a lot of people and resources in Brussels to influence the EU system effectively.
The other element of this is that a lot of UK companies have European subsidiaries and channels to influence the EU and its legislation much more effectively than just the UK’s government Minister making the same point to their Brussels counterpart. So the Government must become much more sophisticated about how they engage with the EU system and get very creative about doing that in practice.
Philip Rycroft: On the back of that, back in 2017-18, when we were beginning to think about post-Brexit arrangements for what was then the UK permanent representation, exactly the point that Anton has just made was at the top of our mind. We came to the counterintuitive conclusion that the mission might need to be bigger and more extensive than it was at that time.
What has happened since is that the numbers in the mission are rather smaller than they used to be. I think that this is very short-termist and a bit of an own goal by the UK. We have to strengthen that; it requires different skills because you are trying to access institutions from the outside. In that respect, the Civil Service could learn a lot from industry in terms of how it seeks access in its lobbying efforts in the EU. A big change in thinking is needed; I am not sure how far that has advanced, but it should certainly be going a lot further.
What Lord Whitty said about the range of issues being looked at from the centre is absolutely right. This is why the Cabinet Office nexus is so important: because, in essence, it is co-ordinating. It does not try to do everything; it co-ordinates across government. The formal expression of that in meetings, as they used to be constructed and held by the Cabinet Office, was a revolving cast list of departments sat around a table to bring their wisdom to bear on the issue of the day.
It is not just about constructing a negotiating line on a single issue; it is about constructing your overarching negotiating approach. Given the interface between foreign and domestic issues that dealing with the EU entails, the Cabinet Office nexus was so important. There was no failing on the part of the Foreign Office, of course, but the Foreign Office was coming into that and bringing its point of view to bear while the Cabinet Office was doing its role as the co-ordinating point in government.
To reiterate the point, this requires the building up of that expertise, not just in the Cabinet Office but across Whitehall, to ensure that the UK Government get the best service that they require.
Q33 Baroness Nicholson of Winterbourne: As a point of entry into this complicated debate, I was most amused by the idea that Norway had a single identification for the EU. Presumably, that was the gentleman who picked the receiver up and said, “No. Where are the fish?” As a comment, when we are looking at whether EU negotiations are helpful to our other negotiations, I wonder whether there is not a very constructive point here. One of our very best Commission trade envoys was Peter Mandelson, who is now our ambassador to the United States of America—not Canada, I think.
The Chair: Not yet, anyway.
Baroness Nicholson of Winterbourne: But he might be able to stop what is going on. Obviously, we have this difficult time of swinging between these vast continents that have huge trade strengths while we are struggling with the little reset that we are having today, with very modest ambitions for the European Union—step by step, I hope. Also, we have the USA with all sorts of excitements going on. On top of that, nobody has yet mentioned the trade strength of some Commonwealth countries. We merely refer to Australia or something but, in fact, there is a lot of strength there as well.
Do our witnesses feel that we have any useful indicators as to how we can improve our negotiations in this astoundingly difficult time, when movement everywhere is very difficult indeed? We are closer to the USA than most other nations—in fact, probably the closest of the lot. How are we going to expand that? Is there anything in the EU negotiations that will help us there? I would very much like to hear those points be elaborated on by our rather exceptional witnesses.
The Chair: Who is going to kick off on that? Perhaps I could turn in your direction, Shanker.
Shanker Singham: Certainly. Those are very good comments and questions. On the Commonwealth, significant numbers of the CPTTP members are Commonwealth countries, including, obviously, the big ones: Australia, New Zealand, Canada and Malaysia. You also have other countries that are in the CPTTP accession line. It is an important strategic trade partnership that the UK has and is part of, as the first accession member; we cover ourselves somewhat there. There is certainly more to be done with other Commonwealth countries.
The UK is in an interesting position because we are one of the few—perhaps the only—industrialised country that is, shall we say, in the frame for deals with the US, the EU, the CPTTP countries, et cetera. That provides an interesting opportunity for the UK. I would not be unduly concerned about the fact that the UK is not as large as some of these other countries or blocs that we have mentioned. There are many middle-power countries that do very well as a result of those kinds of relationships. One thinks of countries such as Chile, Singapore and New Zealand, which have been able to generate significant GDP per capita gains as a result of the relationships they have; there is no reason why the UK cannot build on that.
One area where there will be much closer interest and alignment between the US and the EU—you are starting to see it already—is the economic security issue that Anton mentioned, particularly with regard to our approach to China. If we—the EU, the US and the UK collectively—get the approach to China right, it will be a massive gain for global GDP per capita. If we get it wrong, it will have a significant wealth-destruction effect.
How do we get it right with China? There is potential for an agreement with the EU, the US and the UK—one that means that, if China is distorting its market for trade advantage in ways that damage competition, we have a robust mechanism to deal with it. At the same time, we must send a signal that we welcome imports from and trade with China. We are not trying to tell it how to organise its economy; we are saying that, if it organises its economy in such a way that it damages competition in relevant markets, we have a robust mechanism to deal with that. This approach is along the lines of some of the EU tools that have been developed and is certainly along the lines of the US thinking; it would be an area where we could very much work together and develop a closer approach overall.
Anton Spisak: I very much agree with Shanker. There should be a common objective guiding the US, the UK and the EU in approaching economic issues from China. At the same time, if we look at the approaches to date, there are strong indications that there is a growing divergence between them. To take the example of tariffs on electric vehicles, if you look at the approaches of the US Administration, the UK Government and the European Commission, you see that they are very different. The UK Government have not taken any action, even though the import rates for Chinese electric vehicles coming into the UK has been higher since 2020 than for those coming into the EU. There are good reasons for that—it is a judgment call to prioritise consumers as opposed to producers; this is the result of the assessment the Government have done on this issue—but there is divergence between the positions that are being taken.
We can also look at export controls on critical technology. In the past 24 hours, we have seen a retaliation from Beijing directed at the biggest US technology companies, as well as the consequences of that. We have not yet seen this done to some of the UK manufacturers. The differences are starting to emerge; it will be difficult in practice to align these approaches, even though the benefits of that to the western economic order would be enormous.
Q34 Lord Stirrup: The Government have said that they are committed to being as transparent and open as possible with Parliament on the reset. At the same time, they have said that they are not going to publish a reset policy paper. Were they right to do so? Would such a document be a help or a hindrance in this kind of negotiation? More widely, on transparency, since any negotiation is essentially a combination of wins and losses, Parliament—and, I suspect, the public more widely—will be interested in what the overall balance sheet looks like, including whether it is overall in credit or in debit for the UK. Would it not be a good thing to have a mechanism to assess the outcome of any negotiations and to provide some kind of independent analysis of the costs and gains—for example, the likely economic gains from anything that is achieved in the negotiation? This would aid transparency in that it would help Parliament and the public assess whether the concessions that have been made in the negotiation were worth what we got. Also, the fact that such an assessment was going to be made might help to concentrate the minds of those who are doing the negotiation. What does the team think?
Philip Rycroft: I will start on that. You are talking about an impact assessment, which is a tool that the Government should use for all policy developments in order to illustrate to Parliament and the public what the costs and benefits of a policy might be. Back in the day, in 2018, the department for which I was responsible produced, with colleagues in the Treasury, an impact assessment on the various possible outcomes of Brexit. All of them were demonstrated, from an EEA-type deal to something like what we got through to no deal. That assessment was controversial and much disputed, but all of those outcomes would ultimately have been negative for the long-term prosperity of the United Kingdom. It was interesting that, from memory, such an impact assessment was not done for the TCA itself, but Lord Frost will correct me if I am wrong on that.
It is important that the Government are clear on their negotiating objectives. There is a tendency in the UK to think that you have to hide all your negotiating objectives. The EU, by contrast, is a more open book in terms of its negotiating approach. It is an interesting contrast; we have something to learn from the EU on that score. There needs to be more clarity on the negotiating objectives, not least so that they can then be properly assessed.
The problem with the way these negotiations will move forward is that they will be rather more piecemeal than the big set piece you get with something like the TCA. There will be some significant moments where two or three things land together but, if you take the argument that all three of us have been making in the course of this afternoon—that this will be a continuous negotiation in which the objectives need to extend over time—you are never going to get to one point when you say, “It’s done and dusted, and there is your overall impact assessment”.
The risk for the Government is that they get slightly caught on what are perceived as the concessions they have made, and that they have difficulty in defending those. Ultimately, the Government must take their courage in their hands, be clear about their objectives, be honest about the cost benefits of those objectives and set all that out clearly as they set off into the negotiations. They must then do the rigorous impact assessments afterwards. I absolutely advise that that is how the Government should approach it; whether they will or not remains to be seen.
Anton Spisak: I differ slightly from Philip, in that I think it was the right decision not to publish anything to date. The reason for that is that it would have been an easy excuse for the European Commission to refute a lot of the objectives and the means that the Government may have suggested for pursuing those objectives. It is a very easy argument for the Commission to say that it does not stack up to the full freedoms, the integrated single market and so on.
Tactically speaking, it was the right decision not to do that now, but I also think—this takes me back to my initial point—that we now have a window of opportunity until the political summit on 19 May. As I suggested in my recent paper, the UK Government and the European Commission should be working towards some sort of renewed political declaration that sets out a set of shared objectives and a shared road map for pursuing them in the next 12 to 18 months. That would be the right time to consult businesses, civil society and other stakeholders on those objectives, as well as to have a public debate with experts about the right means and policy instruments to meet some of those targets. A shared document would be a way to build a bit of consensus and shared understanding between the two sides on what they want to negotiate. There are some different ideas at the moment, and building as much of that shared understanding as possible would be the right step forward. If that were an outcome of the summit meeting, it would be a very good one, in my view.
The Chair: All of that suggests—personally, I agree—that this May meeting will really be the launch of the more detailed phase, and that it will be several years before one gets to any clear outcomes. There is a risk that the summit may be seen as the endpoint or a moment for a great declaration of a triumphant outcome. Clearly, it will not be that; it will be the start, or kick-off event, of a long and complex process.
Anton Spisak: I agree. Also, there is a debate happening at the moment between member states in Brussels around what kind of procedural approach is the right one. Should the EU take a package-based approach where nothing is agreed until everything is agreed—that is a common refrain from the past couple of years; no doubt it is very familiar to people in the room—or should it take a more incremental, step-by-step approach? There is a difference in views among the member states.
I think that a package approach would in many ways be beneficial to some of the UK’s interests in expediting a lot of these difficult issues. The deadlines for a number of questions that are part of the trade and co-operation agreement—the fisheries question expires at the end of June 2026—would help expedite a lot of the other tricky issues. I think that there is some merit to that over the incremental approach, where we will just be waiting for the outcome of individual negotiations that are somehow added to the TCA in phases or done through other legal means, which could mean that we will be negotiating on all this for the next five, six or seven years—however long. We will see where this debate lands in Brussels, but I think that it is an important one to watch for the UK Government.
The Chair: We have talked about influencing the EU so I will pass straight on to Baroness Hayter to ask our last question.
Q35 Baroness Hayter of Kentish Town: Had 4 July not happened, I do not know what inquiry we would be doing now, but we would surely be moving on to what should be in the review of the TCA. We have covered a lot of areas to do with the reset, but are there other things that we must not forget and which would have been on our agenda for the review of the TCA? There may be areas such as consumer policy or the way the TCA has set up its own institutions. Are there things that we ought to have in the back of our mind and that we should not forget because of the reset?
Shanker Singham: I will have a crack at that one. There may be a slight difference in approach to the TCA reset between the UK and the European Commission. The Commission regards the TCA reset very much as, “How is the TCA working? Where there are compliance issues, how is it being complied with?”, before it gets on to the next stage of figuring out whether it is going to change it and how. The UK Government are much more focused on what changes we could have.
The announced reset is now subsuming that process. You are right, Chair, that this May will be the start of a whole set of processes and discussions that will go through and incorporate the TCA review. To that end, it is totally appropriate for Governments to set out their negotiating objectives in broad terms. That is what the UK should do. However, on the specifics of the negotiations, it is inevitable—because there will be wins and losses, as you have noted—that, as much as Members of Parliament have an important function in approving any package that comes back, the Commission and any other country will not want to negotiate with individual Members of Parliament, or Members of Congress in the US. Having a package that is submitted for an up or down vote, as it were, is probably the better way to go.
I will just sound a note of caution. I am fully supportive of impact assessments and so on, and I have written extensively about them, but I have a note of caution—I say this as someone who has spent 30 years developing economic models—on the limitations of economic modelling. Economic modelling will not tell you the impact of the dynamic effects of regulatory reform or business confidence—all these things. Economic models frequently underestimate the effects of trade deals; I can give you lots of examples of this. This does not mean that we do not do them—it is very important to do them—but we cannot unduly fetishise economic models and just say, “The laptop tells me this, therefore we must do this”. Ultimately, it is for Governments and trade policy, whether it is the EU reset negotiations or everything that we do with the US and China. This is part of a global trade strategy and, ultimately, the Government must be responsible for it.
Equally, it is important not to think simply that your commercial policy is the aggregation of what businesses tell you they want. Governments have to think about incumbents, new businesses, new entrants, the businesses of the future and consumers. There is a whole range of things that Governments must think about, so we must be careful in how we use those raw inputs in the overall negotiation of these things.
The Chair: That feels to me like a very good way of rounding off a complex and useful discussion. Unless any other members of the committee have anything that they would like to come back on or raise as a final comment, on behalf of all of us, I say a very warm thank you to all three of you. That was a really interesting, enlightening session—I have certainly learned a lot—and it was very helpful in terms of framing our report. I declare the public part of our meeting over.
