5 March 2019

Attorney General continues to pursue changes to the backstop

Attorney General Geoffrey Cox and Brexit Secretary Stephen Barclay will return to Brussels today to secure legally-binding changes to the Irish backstop. Cox yesterday responded to a report from the Telegraph which said that he abandoned efforts to secure a unilateral exit mechanism or time limit to the backstop, by saying “some of it is accurate, much more of it isn’t and what is not is far more significant than what is. Complex and detailed negotiations cannot be conducted in public.” The DUP MP Sammy Wilson told Talk Radio this morning, “Having thrown away the option of No Deal it’s very unlikely Stephen Barclay and and Geoffrey Cox are going to come back with anything that satisfies Parliament and that the Withdrawal Agreeement will be supported next week.”

This comes as the Telegraph reports that Conservative Brexiteers have warned Theresa May that she must whip her MPs to keep open the option of a No Deal Brexit in a vote next week. Former Conservative leader Iain Duncan Smith said, “She has to oppose anyone trying to take [No Deal] off the table and to reject an [Article 50] extension. That will make the EU sit up and understand that we are serious. It won’t give anything until these votes are done.”

Elsewhere, The Sun reports that May is likely to travel in Brussels on Sunday, before presenting the final deal to the House of Commons on Monday. It comes as the European Research Group of Eurosceptic Conservative MPs said that MPs should have at least 48 hours to study the deal before the debate begins, with ERG deputy Chair Mark Francois adding, “Any attempt to bounce the Commons is likely to backfire spectacularly.”

Meanwhile, the Government has postponed a vote on its financial services bill in order to avoid possible defeat on an amendment on tax rules in overseas territories. If passed, the amendment would have required all British overseas territories to create a public register of the owners of companies based within their jurisdiction. Supporters of the amendment, including Shadow Treasury Minister Jonathan Reynolds, had hoped that the amendment would lead to greater transparency and enable them to deal with issues such as money laundering and people trafficking. The financial services bill is one of several pieces of legislation which must pass to prepare for a No Deal Brexit.

Source: The Telegraph I Twitter The Telegraph II The Sun The Guardian The Telegraph III The Guardian II BBC

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UK construction industry shrinks amid uncertainty

The Global Information provider IHS Markit has indicated a decline in business activity in the construction sector over the past year. The company’s purchasing managers’ index fell to 49.5 in February, its lowest reading since March 2018, showing a reduction in business activity in the sector. IHS Markit economics associate director, Tim Moore, said, “The UK construction sector moved into decline during February as Brexit anxiety intensified and clients opted to delay decision-making on building projects.”

Separately, Japanese Ambassador to the UK, Koji Tsuruoaka, told Sky News that more Japanese companies in the UK will consider relocating if uncertainty over Brexit does not fade.

This comes as Didier Leroy, Chairman of European operations of Japanese carmaker Toyota, told Financial Times that a No Deal Brexit would complicate the production of new car models in the UK, explaining, “If we don’t have access to the European market without a specific border tax, it seems to be extremely complicated to think about…[the] introduction of another model.” Leroy however added that Toyota has “no plan today to withdraw from the UK and stop production.”

Source: IHS Markit The Financial Times Reuters The Financial Times

Head of German Federation of Industries suggests No Deal preferable to extending negotiations

The head of the German federation of industries Dieter Kempf has argued that No Deal would be better than an extension to Brexit negotiations, saying the “economy can live better with bad conditions than with uncertainty.” Kempf stated, “Uncertainty is bad for the economy. If we talk about a period of two and a half weeks, it is good if we avoid a hard Brexit” adding, “But what will change in three to four weeks? The British House of Commons knows very well what it does not want, but not what it wants…That makes it difficult for a negotiating partner.”

Elsewhere, Irish Taoiseach Leo Varadkar said, “We are happy to offer further clarifications and further assurances if that can help the UK Government to get the agreement over the line,” adding, “But from Day one we have been very straight about a few things, among those has been that Brexit cannot mean under any circumstances the emergence of a hard border between Ireland and Northern Ireland.” Meanwhile, Varadkar announced yesterday that Mark Durkan, the former leader of the Social Democratic and Labour Party (SDLP) and former Deputy First Minister of Northern Ireland, would contest the Dublin seat for Fine Gael in the upcoming European Parliament elections. It comes as the SDLP recently entered into a partnership agreement with Fianna Fáil.

Source: The Guardian Reuters BBC

Google asks EU to reconsider updating copyright rules

Google has urged MEPs to reconsider updating EU copyright rules, warning they would have to pre-emptively remove videos from YouTube to alleviate risk of being sued. The European Parliament will vote on updates to the EU’s copyright directive, known as article 13, later this month. Google’s senior vice-president for global affairs, Kent Walker, said that the suggested updates would “result in online services over-blocking content to limit legal risk,” adding, “Services like YouTube accepting content uploads with unclear, partial, or disputed copyright information could still face legal threats. This would be bad for creators and users, who will see online services wrongly block content simply because they need to err on the side of caution and reduce legal risk.”

Elsewhere, EU trade officials will be holding talks with US officials this week amid concern over future trade tariffs.

Source: Financial Times Reuters

Emmanuel Macron calls for "European renewal"

In a letter published in newspapers across Europe, French President Emmanuel Macron calls for “a roadmap for European renewal,” citing Brexit as a symbol of Europe’s crisis. His proposals include the creation of a European agency to protect against interference in elections, plans to “rethink the Schengen area,” as well as increased defence spending and a European Security Council of which the UK could be part of post-Brexit. He also suggests holding a Conference for Europe, which “will define a roadmap for the EU that translates these key priorities into concrete actions.” Macron concludes, “There will be disagreement, but is it better to have a static Europe or a Europe that advances, sometimes at different speeds, and that is open to all? In this Europe, the people will really take back control of their future,” adding, “In this Europe, the UK, I am sure, will find its true place. The Brexit impasse is a lesson for us all. We need to escape this trap and make the forthcoming elections and our project meaningful.”

Source: The Guardian

Henry Newman: Get real, Eurosceptics. Your choice is May’s Deal – or no Brexit at all.

In his ConservativeHome column, Open Europe’s Henry Newman writes, “Within the next week, Parliament will have another chance to vote on Theresa May’s exit deal. If it’s rejected, again, then Brexit itself will be increasingly at risk. The outcome is likely a softer exit or even no Brexit at all,” adding, “There is now little prospect of a No Deal at the end of March. And the possibility of a very long delay to Brexit is growing.” Newman concludes, “That’s the decision which MPs now face: back May’s imperfect Brexit deal or risk losing Brexit altogether, with all the public wrath that would inevitably entail. So if Geoffrey Cox can bring back a sharper backstop exit mechanism from Brussels, plus reassurances for Stormont, MPs should reluctantly give him the benefit of the doubt, even if he can’t quite secure everything for which some had hoped.”