BREXIT
UK elections: Historic result for Labour, but no vote share gains
Note4Students
From UPSC perspective, the following things are important :
Prelims level: British Parliamentary system
Mains level: Impact on India-UK relations
Why in the news?
Keir Starmer is poised to become the next Prime Minister of the UK, following Labour’s landmark victory securing a substantial majority.
Labour Party Comes to Power after 14 Years of Conservative Rule:
- Electoral Outcome: Labour secures a decisive victory in the UK elections, winning 412 seats in the House of Commons, ending 14 years of Conservative governance.
- Majority: Labour has achieved the largest majority in British politics since the early 20th century, with over 290 seats ahead of the Tories.
- Voter Sentiment: The election reflects a strong anti-conservative sentiment rather than a resounding endorsement of Labour, with significant losses in Conservative strongholds.
- Strategic Shifts: Labour’s success is attributed to strategic moves to appeal to rural and traditionally Conservative areas, contrasting with losses in urban and progressive strongholds.
Left and Right Streams in the UK:
Left Stream (Labour Party):
- Traditionally advocates for social justice, welfare state policies, and government intervention in the economy to reduce inequality.Strong support from urban areas, progressive voters, trade unions, and historically marginalised groups such as minorities and low-income earners.
- Under Keir Starmer, Labour has moved towards the centre, focusing on appealing to more rural and traditionally Conservative constituencies.
Right Stream (Conservative Party):
- Favors free-market policies, limited government intervention, and emphasises individual responsibility and economic freedom. Strong support from affluent voters, business interests, rural communities, and traditionally conservative values such as patriotism and national sovereignty.
- The Conservative Party has faced challenges with internal divisions over Brexit and criticism for austerity measures implemented during previous administrations.
Impact on India:
- India-UK FTA: The Labour Party has maintained its commitment to completing the FTA, though the timelines will remain uncertain for some time. Key sticking points include India’s demand for greater access for its skilled professionals in the UK market and the UK’s push for lower import duties on goods like Scotch whisky and electric vehicles.
- Defence and Security Cooperation: The India-UK defence and security partnership is likely to continue strengthening, building on recent momentum from the 2+2 mechanism and Defence Minister Rajnath Singh’s visit in early 2024. The UK is expected to maintain its support for a rules-based order and continue working with India to promote a “free and open Indo-Pacific”.
- Visa Rules: India has been in talks with the UK for the past few years to relax visa rules for its citizens. With the Labour Party coming into power, there might be some uncertainty around the progress of these discussions.
- Carbon Tax: While the FTA might reduce or eliminate tariffs, Indian exports could still face hefty carbon taxes, unlike UK exports to India. The Labour Party has always been in favour of imposing a carbon tax, which could impact Indian industries
Conclusion: India should leverage diplomatic channels to strengthen economic cooperation with the UK under Keir Starmer’s leadership. This could include negotiating bilateral trade agreements, promoting investment opportunities, and collaborating on emerging sectors like technology and renewable energy.
Mains question for practice:
Q Discuss the potential implications of Keir Starmer’s ascension to UK Prime Minister on India-UK relations. 10M
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BREXIT
Windsor Framework: The deal between UK and EU
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Windsor Framework
Mains level: Not Much
The ‘Windsor Framework’ will replace the Northern Ireland Protocol, which had proved to be among the thorniest of Brexit fall-outs, creating problems both economic and political.
You must know!England is a country in its own right and forms part of Great Britain, along with Scotland and Wales. Great Britain is a geographical term that refers to the island that contains England, Scotland, and Wales. On the other hand, the United Kingdom (UK) is a sovereign state that includes England, Scotland, Wales, and Northern Ireland. Hence, England is a part of Great Britain, and Great Britain is a part of the UK. |
What is the Northern Ireland Protocol?
- After the UK left the European Union, Northern Ireland remained its only constituent that shared a land border with an EU-member, the Republic of Ireland.
- Since the EU and the UK have different product standards, border checks would be necessary before goods could move from Northern Ireland to Ireland.
- However, the two Irelands have had a long history of conflict, with a hard-fought peace secured only in 1998 under the Belfast Agreement, also called the Good Friday agreement.
- Fiddling with this border was thus considered too dangerous, and it was decided the checks would be conducted between Great Britain and Northern Ireland.
- This was called the Northern Ireland Protocol.
Why was it contentious?
- Under the protocol, Northern Ireland remained in the EU single market, and trade-and-customs inspections of goods coming from Great Britain took place at its ports along the Irish Sea.
- The checks made trade between Great Britain and Northern Ireland cumbersome, with food products, especially, losing out on shelf life while they waited for clearance.
- Some taxation and spending policies of the UK government could not be implemented in Northern Ireland because of EU rules.
- The sale of medicines, too, was caught between different British and EU rules.
What does the Windsor Framework proposes?
- The Windsor Framework Deal proposes two crucial aspects. The first aspect is the introduction of a green lane and red lane system for goods.
- The green lane system will be for goods that will stay in Northern Ireland.
- The red lane system will be for goods that will go to the EU.
- The second aspect is the ‘Stormont Brake’.
- It allows Northern Ireland lawmakers and London to veto any EU regulation.
- The veto is applicable if they believe that the regulation affects the region adversely.
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BREXIT
[pib] Agreement between India and UK on custom cooperation approved
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Agreement on assistance in customs matters
Background of the agreement
- The Cabinet, chaired by Prime Minister has approved the signing and ratification of an Agreement with the UK on Customs Cooperation and Mutual Administrative Assistance in Customs Matters.
- The Agreement would provide a legal framework for sharing of information and intelligence between the Customs authorities of the two countries.
- It will also help in the proper application of Customs laws, prevention and investigation of Customs offences and the facilitation of legitimate trade.
- The Agreement takes care of Indian Customs’ concerns and requirements, particularly in the area of exchange of information on the correctness of the Customs value, tariff classification and origin of the goods traded between the two countries.
Impact
- The Agreement will help in the availability of relevant information for the prevention and investigation of Customs offences.
- The Agreement is also expected to facilitate trade and ensure efficient clearance of goods traded between the countries.
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BREXIT
UK turns to Indo-Pacific
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Quad
Mains level: Expansion of Quad
Britain wants to expand its influence among countries in the Indo-Pacific region to try to moderate China’s global dominance.
Seems like QUAD is getting attention from other democratic nations for the big-brother role!
What is the news?
- A document laying out post-Brexit has highlighted foreign defence policy priorities of the UK.
Britain’s post BREXIT plan
- This document is Britain’s biggest foreign and defence policy review since the end of the Cold War.
- It sets out a planned increase to Britain’s nuclear arsenal to weigh against evolving global security threats and underlines the importance of strong ties with the US while naming Russia as the top regional threat.
- It sets out how PM Boris Johnson wants to be at the forefront of a reinvigorated, rules-based international order based on cooperation and free trade.
Focus on Indo-pacific
- China and the U.K. both benefit from bilateral trade and investment, but China also presents the biggest state-based threat to the U.K.’s economic security, the report said.
- Calling the Indo-Pacific increasingly the geopolitical centre of the world, the government highlighted a planned British aircraft carrier deployment to the region.
- Britain, the world’s sixth-largest economy, is dwarfed economically and militarily by China.
- The UK believes, through soft power and strategic alliances, it can help persuade Beijing to play by the rules of a new, more dynamic international system.
Content over Hong Kong
- The Sino-British ties have tensed since over issues including Beijing’s security crackdown on former British colony Hong Kong.
UK needs India for this juncture
- UK PM Boris Johnson has called ”India is an increasingly indispensable partner for the United Kingdom.”
- India’s skilled labour, technological assistance and the vibrant market will open a lot of avenues for Britain which has recently parted ways with the European Union.
- India is not the world’s largest telecom market; it is also the fastest-growing.
- According to a study on India’s telecom sector, an increase in telecom subscriptions often touches 20 million a month.
- India also offers the cheapest data compared at current market exchange rates. As per cable.co.uk, the price per GB data in India to be $0.09.
- Along with the world, India is now steering towards 5G. The UK will need India’s help to marginalize China in the telecom market.
What else?
- The report categorised India as “an international actor of growing importance”
- Earlier the British government has approached Washington about a “D10” club of democratic partners, based on G7 plus Australia, South Korea and India.
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BREXIT
[op-ed snap] What Brexit means for the EU and its partners
Context
On January 31, 2020, the United Kingdom left the European Union, the EU project will be taken forward by the 27 member states.
A structured exit
- Minimum disruption: This is largely thanks to the Withdrawal Agreement that was negotiated with the U.K., which enabled “an orderly Brexit”.
- One that, at least for now, minimises disruption for our citizens, businesses, public administrations, as well as for our international partners.
- An arrangement of the transition period: Under this agreement, the EU and the U.K. agreed on a transition period, until the end of 2020 at least.
- During which the U.K. will continue to participate in the EU’s Customs Union and in the Single Market, and to apply EU law, even if it is no longer a Member State.
- During this period, the U.K. will also continue to abide by the international agreements of the EU, as we made clear in a note verbale to our international partners.
Building a new partnership between the EU and the UK
- Degree of continuity: With the transition period in place, there is a degree of continuity. This was not easy given the magnitude of the task.
- By leaving the Union, the U.K. automatically, mechanically, legally, leaves hundreds of international agreements concluded by or on behalf of the Union.
- Building new partnership: That work will start in a few weeks as soon as the EU 27 Member States have approved the negotiating mandate proposed by the European Commission, setting out our terms and ambitions for achieving the closest possible partnership with a country which will remain EU’s ally, partner and friend.
- Links and shared values: The EU and the U.K. are bound by history, by geography, culture, shared values and principles and a strong belief in rules-based multilateralism. Our future partnership will reflect these links and shared beliefs.
- Working on topics beyond trade: Both sides want to go well beyond trade and keep working together on security and defence, areas where the U.K. has experiences and assets that are best used as part of a common effort.
- Cooperation on the wide topics: In a world of big challenges and change, of turmoil and transition, we must consult each other and cooperate, bilaterally and in key regional and global fora, such as the United Nations, the World Trade Organization, the North Atlantic Treaty Organization or the G20.
- Collective responses to handle global challenges: Today’s global challenges- from climate change to cybercrime, terrorism or inequality — require collective responses.
- The more the U.K. is able to work in lockstep with the EU and together with partners around the world, the greater would be chances of addressing these challenges effectively.
Way forward
- Continuing project forward as 27: At the very core of the EU project is the idea that it is stronger together; that pooling resources and initiatives is the best way of achieving common goals. Brexit does not change this, and efforts must be taken to continue this project forward as 27.
- Note for the partners: EU’s partners can be sure that EU will stay true to an ambitious, outward-looking agenda-be it on trade and investment, on climate action and digital, on connectivity, on security and counter-terrorism, on human rights and democracy, or on defence and foreign policy.
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What has happened?
A referendum – a vote in which everyone of voting age can take part was held to decide whether the UK should leave or remain in the European Union and Leave won. <what is the difference b/s referendum and plebiscite?>
What is this UK, Britain, Ireland, Republic? What’s going on? Is Scotland a separate country?
Without going into the history-
- Full name is United Kingdom of Great Britain and Northern Ireland i.e Great Britain plus N.I.
- Great Britain – It contains 3 somewhat autonomous regions – England, Wales and Scotland
- Republic of Ireland separated from northern Ireland and UK in 1920s and is a separate country now <Belfast is capital of which Ireland and what is the capital of Wales and Scotland?>
But why this referendum
Conservative govt led by David Cameron had promised this referendum if they won the general election and as they won this referendum was held
What is European Union?
- It is an economic and political partnership involving 28 European countries <latest country to join EU?>
- It is a single market (common market) allowing goods and people to move around, basically as if the member states were one country. So basically any French citizen can travel to Germany and work there without visa.
- You can visit whole of EU with a single visa <no internal borders>
I had to take a separate visa to travel to London. How about that?
- So this common visa thing is applicable only to countries that are party to Schengen area <where is Schengen btw?>
- There are 26 Schengen countries (22 EU + 4 Non EU)
- 4 Non EU – Iceland, Norway, Switzerland, Liechtenstein <btw Liechtenstein is a double land locked country. Look in the map and find out which other country is doubly landlocked, There’s only one other>
- 6 EU not party – Bulgaria, Croatia, Cyprus, Ireland, Romania and the UK.
So as UK is not party to Schengen, you had to take Visa.
What about euro? I had to use pound in UK. Isn’t the Euro currency of EU?
- Euro currency is used by Eurozone countries. Eurozone is subset of EU. Only 19 EU countries are part of it. Obviously UK is not party to it.
- Euro is also used by 4 other European countries – Vatican, Andorra, San Marino, Monaco
Any history ? How did EU begin?
- It grew out of a desire for peace in a war-torn and divided continent. It started in 1951 with European Coal and steel community of 6 countries by treaty of Paris <France, Germany, Italy, the Netherlands, Belgium and Luxembourg>
- 1957 – European Economic Community (EEC) or common market was formed by treaty of Rome,
- 1973 – Britain, Denmark and Ireland joins the EEC <total 9 countries now>
- 1992 – Maastricht treaty was signed and comes into force in 1993. Formal beginning of EU
- 2002 – Euro replaces national currency in eurozone
What does EU do?
- Eu oversees co-operation among its members in diverse areas, including trade, the environment, transport and employment
- Common security and foreign policy
- coordinates policy on asylum, immigration, drugs and terrorism <that’s why so much concern over migration fro middles east and north Africa>
- EU policies on workers’ rights and other social issues <UK not part of this social chapter either>
- Promotes human rights, give aid to agriculture, fisheries etc
Okay, sounds great but how does it all work?
EU works through 4 main institutions
- European Commission – All powerful bureaucracy of member states <each country, one representative>, propose laws, implement laws, job is to promote European interest, not the interest of member countries, HQ in Brussels <where is Brussels>
- European Council – It’s a political body, leaders meet here
- European Parliament – Directly elected MPs <MEPs> vote on almost all the issues now days. It sits in Strasbourg <where is Strasbourg?>
- European court of rights – name explains everything <where is its headquarters?
Why do Brits want to leave EU?
- Sovereignty – that Britain ceded its sovereignty, right to pass its own laws to bureaucrats sitting in Brussels <Doesn’t India lose its sovereignty by being member of UN?>
- Regulations – That Brussels imposed too many regulations that hurt British business interest
- Money – Billions of pounds of entry fee with very little to show in return <Britain don’t have many farmers to get agriculture subsidies>
- Open borders/ migration – even though Britain is not part Schengen, workers from rest of the EU can come their freely and work there. Large numbers from eastern europe came just to claim British benefits, social security and all <so called welfare tourism>
- Ever Closer Union – detested the idea of United states of Europe <closer political union, confederation sort of thing>
Why did Cameron want UK to stay in EU?
- Single market – much easier to sell things while being member of single market
- Security
- Britain’s status in the world is enhanced as part of EU
How is single market different from free trade area?
- In FTA there are no tariffs except on some negotiated goods and services but in single market, even labour mobility is free
- In Single market, you impose common tariffs on all imports, it;s like a single country for the purpose of trade and commerce
- There are common standards etc. <environment, labour, quality etc.>
What is European free trade association (EFTA)?
- It is FTA of 4 European countries -Iceland, Norway, Switzerland, Liechtenstein <do you recall they are all part of Schengen>
- All of them have signed FTA with EU. Britain can sign similar FTA with EU now
What happens now?
- Britain would negotiate its exit <under Lisbon treaty>, But the fear is of contagion. Eurosceptic parties of other countries would also press for similar referendums.
- Plus as Scotland has voted overwhelmingly in favour of stay (68%), there would be fresh demand for referendum on Scottish independence. Similarly is the case with northern Ireland.
Impact on India
- No direct impact but expect turbulence in stock and forex market. Panicky investors may withdraw their hot money out of India
- On positive side, India can sign FTA with Britain