Split between Department for International Trade and Home Office comes as UK and New Zealand race past deadline for agreement in principle.

LONDON — Britain's Liz Truss is at odds with Cabinet colleague Priti Patel over whether a trade deal with New Zealand should allow more overseas workers to come to Britain. 

The international trade secretary wants visa easements with New Zealand to be up for discussion in the ongoing talks, but the home secretary is pushing back, according to multiple people in government who spoke to POLITICO on condition of anonymity.

The Department for International Trade needs to agree a negotiating mandate with each Whitehall department, but the Home Office is still to sign off on the proposals — despite earlier hopes a so-called 'agreement in principle' with New Zealand, which would pin down these details, could have been sealed this week.

The difference of opinion inside government comes as London and Wellington race past their self-imposed end of August deadline for that draft agreement, with agriculture and services access remaining as other key sticking points.

“The Home Office is always tricky,” one Cabinet minister said. “It’s always double-checking visas. It was the same with Australia, but we got to the right place in the end, and we will with New Zealand too.”

Some observers believe Patel was put out about visa arrangements agreed with Australia as part of a proposed free trade deal, which included easements around a three-year working-holiday visa.

One Home Office official said the provisions with Australia were a one-off and that a collective government agreement rules out pursuing immigration measures as part of free trade deals. But the trade department pushed back, insisting there was no blanket approach and that each deal is done on a case-by-case basis with final sign-off from Downing Street.

Two people on a business briefing call this week with Amanda Brooks, the director-general for trade negotiations, said she confirmed immigration measures were being discussed with New Zealand.

'Flexibility'

Taking a tougher line against work visas would make signing trade deals trickier because Britain would be giving up a negotiating card. “It’s politically very difficult to sign a free trade agreement which covers services unless you have some flexibility on people’s ability to deliver those services in person,” said Peter Holmes, a trade expert with the University of Sussex.

He added that a hoped-for trade deal with India, for example, would be unlikely to materialize if the government is too restrictive on visas, because more access to work in Britain is seen as a big prize by Delhi. “The Indian government may well hold out until it gets something it really considers worthwhile,” he said.

One senior person in the DIT said the Home Office's priority is controlling immigration, while theirs is liberalizing trade. Another senior official said it was normal for government to be concerned about temporary movement measures in trade deals affecting the overall immigration approach, but that the departments always work out such differences.

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The U.K.'s immigration rules are based on people earning points to be able to live and work in Britain — but some fear liberal add-on measures in trade deals could undermine that overall stance. 

Others argue some liberalization is a no-brainer. Matt Kilcoyne, deputy director at right-leaning think tank the Adam Smith Institute and a government adviser on trade, said there would be no justification for not allowing even youth mobility between the U.K. and New Zealand.

"Priti Patel should be asked why the prime minister was allowed to be saved from coronavirus by Jenny McGee, the nurse from New Zealand, but others denied such care due to the difficulty and cost of entrance to the U.K. for a people that still in many ways consider themselves linked familially to Britain,” he said.

A trade department spokesperson said: “Our negotiations encompass a wide range of issues, including trade in services and the temporary movement of highly skilled professionals, to deliver new opportunities which drive jobs and growth for the U.K. economy." The Home Office failed to comment by the time of publication.

Mismatch'

The visas debate in Whitehall comes as New Zealand and the U.K. continue to try and hammer out the agreement in principle — a job made all the more difficult by the 11-hour time difference between the two nations.

“It sounds like the hurdles that they've got to get over are not trivial,” said a person familiar with the talks.

At issue is how far both sides will go on market access. “The battle is between New Zealand accessing British agricultural markets and us accessing their financial services,” the same person said.

New Zealand’s chief negotiator on the deal, Brad Burgess — also the country’s ambassador to Ireland — has been in London for the last week to try and hammer out final terms. The two teams are in constant contact and holding regular virtual negotiating sessions.

“We’ve got a policy that says we won’t set artificial deadlines,” said a senior U.K. trade department figure.

“There is still some work to do to reach the right deal, but we are making continued progress towards that objective,” said a spokesperson for New Zealand’s Ministry of Foreign Affairs and Trade. “Our negotiators have been working around the clock to achieve this.” 

Just last week New Zealand's Minister for Trade Damian O’Connor said New Zealand was “still committed” to getting the deal by the end of August, and made clear the final question “is how far, how fast, and long-term” the U.K. is willing to go on meat and dairy tariffs.

New Zealand is aiming to get similar market access as the U.K. offered to Australia in June, and also appears reluctant to budge on market access for U.K. services. 

A businessperson familiar with the state of the talks said gaps between the British government’s aims for the deal and the defensive red lines of U.K. businesses is helping drive delays.

“You can see that in the context of things like the upset over the Australia agreement where I don't think anyone quite anticipated that the agricultural sector was going to play as important a role as it did at the expense of potentially other sectors,” they said.

The agreement in principle with Australia was difficult to get across the line due to the backlash from British farmers against provisions zeroing tariffs and quotas on agricultural products from the Aussies over a decade.

“You see it, again, come through the New Zealand talks,” they added, where “it's not going swimmingly because of the mismatches in expectations.”