13 March 2017

David Davis: Government is preparing contingency plans in case UK leaves EU without trade deal

The Secretary of State for Exiting the EU, David Davis, yesterday told BBC’s The Andrew Marr Show that the government is preparing contingency plans in case Britain leaves the EU without a deal. This comes as the House of Commons Foreign Affairs select committee published a report arguing that, “It’s clear from our evidence that a complete breakdown in negotiations represents a very destructive outcome leading to mutually assured damage for the EU and the UK.” However, Davis stressed that, “We are confident we’ll get a good outcome.” Davis warned that if Parliament does not accept the final Brexit deal, “Then that is what’s called the most favoured nation’s status deal with the World Trade Organisation.” When asked about the speculation that Article 50 will be triggered early this week, Davis replied, “I…want to pick the right day, I also want to do it in a right way each date has different implications in terms of when it can be responded to by the Council,” but reiterated that it will be before the end of March. On the date the UK officially leaves the EU, Davis said, “Well it will be by March 2019. I mean that’s not to say there won’t be some transition or implementation.”

Meanwhile speaking to ITV’s Peston on Sunday, Foreign Secretary Boris Johnson said, “I don’t think people recognise that our partners and friends around the EU desperately want this thing to work. They don’t want more misery; they don’t want to fall out with the UK.” He added, “I don’t think that the consequences of no deal are by any means as apocalyptic as some people like to protest.”

Elsewhere, Liam Fox, the International Trade Secretary, told Sky News’s Sophy Ridge Show on Sunday, “We are not expecting to get everything. We understand that if we are outside the single market there is a price that we pay for that and that is our inability to shape that single market.” Separately, Bloomberg reports that industry lobby group TheCityUK has created a steering committee led by managers at Barclays Plc and JPMorgan Chase & Co. to explore potential trade and investment deals after Brexit.

Source: The Daily Telegraph The Guardian BBC’s The Andrew Marr Show: David Davis transcript Bloomberg

Leaked document warns of “major economic shock” if UK relies on WTO rules

The Independent reports on having seen leaked Treasury documents that warn of “major economic shock,” with, “the most negative long-term impact” on the economy if Britain left the EU without a deal and relied on World Trade Organisation rules (WTO). The document, drawn up a month before the EU referendum, argues, “After we left the EU, we’d need to renegotiate the terms of our WTO membership. This would trigger bureaucratic negotiations with other WTO members, lasting for months or years.” A spokesperson for the Treasury said, “We do not comment on leaked documents. The Treasury pre-referendum analysis is published online.”

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Sunday Times: Disputes between Prime Minister and Chancellor’s allies over budget fallout

The Times reports that dispute has broken out between allies of the Prime Minister and the Chancellor as to who is responsible for the fallout over the budget announcement to increase National Insurance Contributions (NICs). The Sunday Times wrote that an ally of Chancellor Philip Hammond called the Prime Minister’s aides “economically illiterate,” claiming that they had demanded bigger increases in NICs and higher capital gains tax. However, ministers and backbench MPs have criticised Hammond for being unaware that the NICs announcement would break a general election pledge, and failing to warn political aides of this in the budget briefing document.

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UK should receive £9bn of UK assets back from EU bank

According to legal advice seen by The Times, the idea that Britain should pay the EU a Brexit ‘divorce bill’ is “wholly without merit in law,” and that it is, “hard to see any credible basis upon which the UK could be said to be obliged” to pay for the pensions. It argues, “The UK on EU exit is entitled to the return of its paid-up capital and indeed to a corresponding share of the accumulated reserves of the EIB.” It concludes, “Overall the UK should be entitled on exit to a net payment in its favour, corresponding to the value of its capital invested in the EIB.” But a senior EU negotiator warned, “Nothing will move forward before Britain pledges to honour its commitments. You cannot compare the EU to a golf club, or to a pub. It’s dangerous to play with this. It’s poisonous and it can derail the talks, and yet the UK government seems to keep digging.” The legal opinion, which has been passed to the Department for Exiting the EU was written by Martin Howe, a leading Conservative barrister with close ties to Foreign Secretary Boris Johnson and Brexit Secretary David Davis.

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Polish foreign minister: Poland will play a “very rough game” with EU for reappointing Tusk

Polish Foreign Minister, Witold Waszczykowski, has said that Poland will respond to the reappointment of Donald Tusk as President of the European Council by “blocking other initiatives, to play a very rough game” in the EU. He continued, “One has to state it openly, EU policy turned out to be a policy of double standards and cheating. We must be aware that we may be cheated any moment,” adding, “For sure we must drastically lower our level of trust toward the EU. Also start conducting a negative policy.”

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Diplomatic row breaks out between Turkey and Netherlands

A diplomatic row between the Netherlands and Turkey has erupted after Dutch authorities prevented Turkish Foreign Minister Mevlüt Çavuşoğlu from landing in Rotterdam. Çavuşoğlu was due to appear at a rally in support of an upcoming referendum that would expand Turkish President Tayyip Erdoğan powers. Dutch authorities have said the decision was on “risks to public order and security” grounds and fearing that it could fuel tensions days before the Netherlands’ general election. Leader of the Dutch populist Party for Freedom (PVV), Geert Wilders, has demanded all of the Netherlands’ 400,000 ethnic Turks be stripped of their dual citizenship referring to them as a “fifth column.”

Meanwhile, Open Europe’s Pieter Cleppe told the Council on Foreign Relations that while Wilders may not win enough support to form his own government, his popularity sends a signal that the EU needs to do some soul-searching. In the Netherlands, as elsewhere in Europe, anti-EU sentiment is on the rise, and “the longer the EU waits to reform, the riskier it gets.”

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