The prime minister is said to be planning on distancing the UK from EU rules and diluting workers’ rights and environmental protections after he delivers Brexit. This has raised concerns among member states, especially Germany, that Britain will become a low-tax, lightly-regulated economy which would pose a threat to the European community. The leaked report seen by the Financial Times comes from the Department for Exiting the European Union (DExEU).
It said the wording of the drafted commitments on rights for workers and protections for the environment contained in the political declaration left “room for interpretation”.
The document said “UK negotiators successfully resisted the inclusion of all UK-wide level playing-filed rules” in Theresa May’s deal.
Officials at the Brexit ministry wrote that the UK’s and EU’s “interpretation of these commitments will be very different”, and that the text represented a “much more open starting point for future relationship negotiations”.
Business secretary Andrea Leadsom has rejected the story, describing it as “not correct”.
She said Britain “will maintain highest standards of workers rights and environmental standards when we leave the EU”.
The leak comes just weeks after German Chancellor Angela Merkel said “a potential competitor will emerge for us” as she forecast how dynamics would change post-Brexit.
Brussels has said it is likely to impose trade barriers to prevent unfair competition if the UK introduces rules which are not similar to the bloc’s.
Labour leader Jeremy Corbyn seized on the leaked report, saying: “These documents confirm our worst fears.”
“You’ve said how we built a coalition – 19 Labour MPs have come with us and voted for a second reading.”
“It wouldn’t make any sense at all to dilute workers’ rights in building that coalition to land the bill.
“We have said we will be better than our word. We have said our ambition on securing workers’ rights will be stronger than the provision of the bill.”
Mr Kwarteng admitted the chances of Britain leaving the EU next week had reduced.
Under the terms of Mr Johnson’s revised deal, only Northern Ireland will be obliged to continue to follow rules similar to those in the EU, and the rest of the UK can diverge if it is willing to accept greater barriers to trade with the bloc.
Most economists think preserving trade ties with the EU should be a priority after Brexit, and see few obvious gains from significantly different regulation.