Brexit and Paul Cezanne, France and EU Law

Brexit and Paul Cezanne (1839-1906)

At the beginning of 2023 one of the premier art exhibitions in London was the Paul Cezanne exhibition at the Tate Modern.

The exhibition has been a glorious celebration and study of European painting through the work of one of France’s most revered post-Impressionist artists.

Around the exhibition halls are written a number of memorable sayings from Cezanne, which help define the man and his work. One of them (from the year 1905) reads: “In my opinion, one does not replace the past, one only adds a new link.” Is this a metaphor for Brexit and a prescient affirmation that the UK remains part of a greater European tradition regardless of Brexit’s centrifugal force?

Brexit and France

On 11th January 2023, The Times reported that King Charles III, the new British King, had chosen France for his first state visit abroad, with the visit planned to commence on 27th March 2023. According to The Times report, this visit might well be preceded earlier in March 2023 by a Franco-UK summit in Paris between UK Prime Minister Rishi Sunak, and French President Emmanuel Macron, and this summit has since been announced.

With these apparent attempts to improve relations between the UK and France following the tensions caused by Brexit, it is worth looking at the state of trade and investment between the two countries.

On 19th December 2022, the UK’s Department for International Trade (DIT) published one of its regular factsheets on UK-France trade and investment, which showed that total trade in goods and services (exports plus imports) between the two countries was £78.3 billion in the four quarters to the end of Quarter 2 (Q2) 2022, an increase of 20.6% or £13.4 billion from the four quarters to the end of Q2 2021. Of this £78.3 billion:

  • Total UK exports to France amounted to £36.5 billion in the four quarters to the end of Q2 2022 (an increase of 17.5% or £5.4 billion compared to the four quarters to the end of Q2 2021); and
  • Total UK imports from France amounted to £41.8 billion in the four quarters to the end of Q2 2022 (an increase of 23.6% or £8.0 billion compared to the four quarters to the end of Q2 2021).

According to the DIT factsheet, France was the UK’s 5th largest trading partner in the four quarters to the end of Q2 2022, accounting for 5.3% of total UK trade.

The factsheet also showed that, in 2020, the outward stock of foreign direct investment (FDI) from the UK in France was £85.5 billion accounting for 5.2% of the total UK outward FDI stock and that, in the same year, the inward stock of FDI in the UK from France was £69.1 billion accounting for 3.6% of the total inward FDI stock.

Hopefully, these trade and investment figures indicate a positive growth path between the UK and France for the post-Brexit period ahead.

Meanwhile, a healthy rivalry between London and Paris in matters such as the tech sector continues, with Laura Citron, the CEO of London & Partners, writing an article in the City AM of 12th January 2023 that “we should see the growth of other tech cities in Europe as a positive. Seen from Silicon Valley, New York or Shanghai, Europe is a single technology market with London as its capital”.

We shall see what happens!

Brexit and the Retained EU Law (Revocation and Reform) Bill (“ the Bill”)

On 18th January 2023, The Times reported that the UK Government is seeking to address concerns of some MPs that the Bill in its original form would erode parliamentary sovereignty in that it would give too much power to government ministers to remove EU-derived law from the body of UK law by secondary legislation without proper scrutiny and debate by MPs.

According to The Times, a cross-party amendment to the Bill would force the UK Government to detail in a more transparent way (including the publication of advance lists of laws to be repealed) the EU-derived laws that the Government would plan to scrap pursuant to the Bill.(The proposed amendment was subsequently defeated when put to a vote in the House of Commons but the concerns suggested by the proposed amendment have not gone away.)

The Times article quoted a UK Government spokesman as saying of the Bill that: “Cabinet agreed none of this work was about watering down standards, such as our strong record on workers’ rights, maternity rights or environmental protection, having raised domestic standards over recent years to make them some of the highest in the world.”

The strength of feeling by environmental organisations about the implications of the Bill for the environment are, however, particularly marked. According to The Times, Wildlife and Countryside Link (W&CL – a coalition of environmental organisations) has released figures claiming that dropping or weakening EU laws in four sectors could cost £82 billion over 30 years.

The Times quoted Richard Benwell, W&CL’s chief executive, as saying: “Prevention of air and water pollution, protection of precious wildlife and habitats, precautions against hazardous chemical use – they are all put at risk [by the Bill]. If longstanding protection for nature is removed or weakened, the economic consequences could run into the billions.”

The naming of names seems to matter in the context of the Bill and one new clause on “assimilated law” was said to have been approved for insertion in the Bill during the report stage and third reading of the Bill in the House of Commons later in the day of the 18th January 2023. This new clause apparently provides for retained EU law and related bodies or types of law to be known by new names as regards all times after the end of 2023 – thus, retained EU law would be known as assimilated law, and retained direct EU legislation would be known as assimilated direct legislation. This new nomenclature may affect perceptions of the objectives of the Bill but will it reduce the more fundamental concerns that have been expressed about the Bill?

Brexit and the Future of EU State Aid Policy

On 25th January 2023, EU Executive Vice-President, Mme Margrethe Vestager, gave a speech on the future of EU State Aid policy to the so-called High Level Forum of EU Member States. The timing of the speech was significant, particularly given the then recent announcement of President Biden’s green subsidy package for US- based businesses under the US’s Inflation Reduction Act, which some would argue is more of a generalised tool to boost the competitiveness of US businesses rather than a means of supporting US businesses to realise specific objectives (such as the achievement of net zero in terms of greenhouse gas emissions).

Mme Vestager was quite clear in her speech that state aid was not the appropriate means to boost the general competitiveness of EU-based businesses. She gave three main reasons for her view:

  • “…Long term competitiveness relies on robust and fair competition, and more importantly on the level playing field in the single market. It cannot be based on the artificial short-term boost that subsidies can provide, and should provide”
  • “…A fruitless subsidy push comes at a high price for taxpayers. We can never forget that every Euro spent on state aid is money taken from someone’s salary, or added to the cost of a product she’s already bought…” and
  • “…The reality in the EU today is that not all countries have the same capacity to spend. This means that a subsidy race between the [EU] Member States will always be inherently unfair…”.

However, Mme Vestager did make it plain that she was not saying that nothing should be done – far from it. It is rather that actions taken should be “fact-based and targeted”. She referred in this respect, by way of example, to the work that the EU Commission was currently doing on a new Temporary Crisis and Transition Framework, relying on two pillars:

  • “…[Making] the calculation of the aid amount simpler and the approval faster…”; and
  • “…[ Introducing a ] new anti-relocation investment aid possibility for productive investments in strategic sectors for the green transition…”.

The UK’s response to the Biden green subsidy package and to the EU’s own developing response to that package is as yet unclear, but in an opinion article for The Sunday Times business news section on 29th January 2023, Sunday Times journalist, Oliver Shah, talked of the UK being caught between a “US rock” and a “European hard place”.

The UK Chancellor of the Exchequer, Jeremy Hunt MP, however, seemed much more upbeat in his Bloomberg speech delivered on 27th January 2023 (just over 10 years after former UK Prime Minister David Cameron’s own Bloomberg speech on the UK’s future in Europe), when reportedly Mr Hunt foresaw a possible future for the UK as the new Silicon Valley, based on the four Es – enterprise, education, employment and everywhere”.