6 March 2019

Barclay and Cox hold further talks in Brussels

The Brexit Secretary, Stephen Barclay, and Attorney General, Geoffrey Cox, travelled to Brussels yesterday for a meeting with EU chief negotiator, Michel Barnier.

Before the meeting Barclay said, “We are determined to get a deal over the line and deliver on Brexit.” Bloomberg reports that Cox may present a legal text to the House of Commons on Monday, ahead of the meaningful vote expected on Tuesday.

Earlier, Barclay had written to Barnier seeking an agreement to ring-fence citizens’ rights “in all [Brexit] scenarios.” It follows on from the amendment tabled last week by Conservative MP Alberto Costa calling for a joint EU/UK commitment to protect citizens’ rights in a No Deal scenario.

Meanwhile, Foreign Secretary Jeremy Hunt stated, “If this deal does not go through, then the only solution is to find a deal that will go through. That is the only way we are going to solve this issue.” He also said, “How we get there…is something we are prepared to be flexible about. The crucial thing is that we need to know that, as a sovereign parliament, we can’t be trapped in the customs union.” Chief Whip Julian Smith reportedly warned the Cabinet yesterday, “It’s going to be very difficult next week and if we lose there’s a risk we will end up staying in the customs union.”

Elsewhere, Ireland’s Deputy Prime Minister Simon Coveney yesterday said that Irish businesses and state agencies should “continue to prepare for No Deal.” He said the Government wanted to reassure the UK it would not be “trapped” in a backstop against its will, adding, “We are in the space of trying to provide clarification that temporary means temporary.”

Open Europe’s Aarti Shankar appeared on Sky News this morning arguing that it was highly likely the UK will need to seek an extension to Article 50.

Source: Twitter - Stephen Barclay GOV.UK Bloomberg Guardian I Daily Telegraph I RTE Newstalk Guardian II Daily Telegraph II

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Bank of England revises No Deal economic forecasts to reflect preparedness measures

The Governor of the Bank of England (BoE), Mark Carney, yesterday said the Bank has revised its assessment of the economic impact of a No Deal Brexit, adding that the Government’s contingency measures would reduce the cost over three years by 2 percentage points in a “disruptive model” and by 3.5 percentage points in the worst No Deal scenario. These scenarios assume that the UK mirrors the EU’s external tariff schedule. In November, the Bank estimated the costs at between 4.75 percent and 7.75 percent of GDP. Carney said, “Since we released the scenarios in November there have been some constructive developments in terms of preparedness…That reduces the level of economic shock.”

Separately, the BoE’s March Financial Policy summary, which was published yesterday, has said that “most risks to UK financial stability that could arise from disruption to cross-border financial services in a No Deal Brexit have been mitigated.” It notes however that “some disruption to cross-border services is possible and, in the absence of other actions by EU authorities, some potential risks to financial stability remain.” It also warns of the potential for “significant market volatility in a disorderly Brexit.” The BoE announced the launch of a new liquidity facility as a “prudent and precautionary step” to ensure UK lenders have access to euro funding in the event of No Deal.

Source: The Times Bank of England Financial Times Reuters

Sky News: UK to cut 80-90% of import tariffs under No Deal scenario

Sky News reports that the Government is preparing to cut 80-90% of all UK import tariffs in the event of a No Deal Brexit. The 10-20% of tariffs that are expected to remain are on sensitive goods such as beef, lamb, dairy, cars and some textiles. The new tariffs will be published next week if the Prime Minister fails to receive parliamentary support for her Brexit deal. The director general of the British Chambers of Commerce, Adam Marshall, has said a “sudden shift” in tariffs would be a “shock for some businesses, particularly in parts of manufacturing and agriculture.” Marshall also said, “There has not been enough consultation with businesses, and particularly with domestic producers, given the potential scale of such a change.”

Source: Sky News The Times

May to announce new post-Brexit workers’ rights safeguards

Prime Minister Theresa May will today announce a package of measures to protect workers’ rights post-Brexit. These include giving Parliament votes on whether to improve UK labour rights in line with future EU regulations, pledging to consult trade unions and businesses on future UK proposals, and creating a single enforcement authority to ensure labour protections are upheld. However, the Trades Union Congress (TUC) has rejected the government’s plan as “flimsy.” These measures are aimed in part at winning the backing of some Labour MPs for the Prime Minister’s Brexit deal in a vote next week. Labour’s Shadow Business Secretary, Rebecca Long-Bailey, has said, “Instead of automatically keeping up with European workers’ rights, and using that as a floor as Labour has pledged, the government is admitting that British workers could see their rights fall behind those of colleagues in Europe.”

Source: Guardian

Northern Ireland civil service head warns of “severe consequences” for the region under a No Deal outcome

The head of Northern Ireland’s civil service, David Sterling, has warned of the “severe consequences” of a No Deal Brexit for the region. In a letter to Northern Ireland’s political parties, Sterling writes, “The cumulative effect of the inability of businesses to prepare, the impact of EU tariffs and significant changes to the regulatory export environment for businesses here could result in business distress, failure or the relocation of some companies to Ireland and as a consequence . . . a sharp increase in unemployment.” On the issue of food supply, Sterling says there is “no material risk of an overall food shortage,” but the likelihood of “some reduction in the choice of food available” under a No Deal outcome. On the issue of energy supply within the all-Ireland Single Electricity Market, he writes, “The Department for the Economy does not anticipate any disruption to the supply of electricity, however there is a risk of increased prices.”

Source: Financial Times

BMW and Toyota alarmed by potential No Deal Brexit

Car manufacturers BMW and Toyota have warned that a No Deal Brexit would threaten their production of certain models in the UK. BMW board member Peter Schwarzenbauer said, “We would need to consider what it exactly means for us in the long run … For [the car model] Mini, this is really a danger.” The Head of Toyota´s European operations Johan van Zyl said separately that No Deal would negatively affect the company’s competitiveness. Van Zyl added, “We want a regulatory framework between the UK and EU which is the same. We hope still that that can be the outcome.”

Source: BBC

Scottish Parliament and Welsh Assembly voice opposition to Brexit deal

The Scottish Parliament and National Assembly for Wales yesterday held simultaneous debates on an identical motion which expressed opposition to the Brexit deal. The motion also called for Brexit to be delayed and for a No Deal scenario to be taken off the table. Scotland’s Brexit Secretary, Mike Russell, said, “We are taking this historic step to send a strong message to the UK Government that it must stop pursuing such a disastrous course of action.” Opening the Scottish Parliament debate, Scotland’s First Minister, Nicola Sturgeon, accused Prime Minister Theresa May of “trying to run down the clock” and “making undeliverable promises to hardline Brexiteers.” She also argued there was a “strong democratic case” for a second EU referendum.

In response, a UK government spokesperson said, “The [Brexit] deal is a good one for Scotland, Wales and the whole of the UK – it delivers the result of the referendum, gives us a close future partnership with the EU, and guarantees citizens’ rights. Refusing to support the Prime Minister’s deal simply makes a damaging No Deal more likely.”

Source: BBC Twitter - SNP

Donald Tusk: External anti-European forces influenced Brexit vote

European Council President Donald Tusk yesterday said that “There are external anti-European forces, which are seeking – openly or secretly – to influence the democratic choices of Europeans, as was the case with Brexit and a number of election campaigns across Europe.” He added, “It may again be the case with the European [Parliament] elections in May. This is why I am calling on all those who care about the EU, to cooperate closely during and after the European elections.” Tusk also expressed his agreement with French President Emmanuel Macron’s opinion piece published on Tuesday, in which Macron claimed that “foreign powers seek to influence our votes at every election.”

Elsewhere, former Foreign Secretary and supporter of the People’s Vote campaign, David Miliband, said that Macron’s article “is a challenge to Europe’s leaders but also to those in Britain. As Parliament considers its final choices on Brexit, the truth is increasingly clear that the Brexit people were promised in 2016 is not on offer,” adding, “It cannot be undemocratic to give the people the final say on whether to go ahead with Brexit.”

Meanwhile, Open Europe’s Pieter Cleppe told Al Jazeera English yesterday, “It is a good thing that [President] Macron has a vision. More European leaders should wonder why the UK has left…But what Macron wants is more of the same, more top-down control, and this is precisely why the British left and why we see more anti-establishment sentiment popping up around Europe,” adding, “People voting for anti-establishment parties are not against the core business of the EU…But they are sceptical about the EU’s role in very senstive policy areas like migration.”

Source: Guardian Telegraph Open Europe

US Ambassador: Criticisms of US food products designed by the EU to "reduce trade"

The US Ambassador to the UK, Woody Johnson, has argued that the criticisms of the quality of US food products, which include chlorine-washed chicken and hormone-treated beef, had been designed “by the EU” to “create barriers” and “reduce trade.” Speaking on Radio 4’s Today Programme, Johnson added that US President Donald Trump “has made it pretty clear that he would love to have a robust trade deal with the UK and any trade deal that we do with the UK would have to include agriculture,” adding, “I think that American farmers care about their land just as much as they do [in the UK].”

Source: Daily Telegraph

Henry Newman: Dear Mr Macron, your arrogance will only make Europe’s problems worse

In an article for the Telegraph, Open Europe’s Henry Newman responds to a letter written by French President Emmanuel Macron calling for “European renewal.” In response to Macron’s “bitter attack on Brexit,” Newman writes, “You argue that Brexit is a ‘lie,’ and complain British people weren’t told the ‘truth’… Did you actually follow our debates before the referendum? It often seemed the whole country was discussing the merits of the Single Market and what it would mean to leave the EU.” He continues, “17.4 million people voted to leave the EU. To suggest that they were ‘retreating into nationalism’ or hadn’t been told about ‘losing access to the EU market’ is an insult to them and to our political processes.” He adds, “Your letter has various suggestions for improving the EU. Some may be welcome, others less so. But each proposal involves the EU gaining further powers and greater influence over people’s lives, at the expense of sovereign states, when we both know that right across the bloc a strong majority want the EU to do the precise opposite. For you, it seems the answer to every question is always more Brussels.” He concludes, “I worry that your arrogance risks exacerbating Europe’s problems not resolving them, that you are furthering divides not addressing them.”

Elsewhere, in a new blog, Open Europe’s Dominic Walsh argues that, contrary to recent arguments, a long extension to Article 50 would not be in the interest of Brexiteers. He writes, “it is far from clear that a No Deal Brexit really be the most likely outcome at the end of a longer extension,” adding that such an outcome “would require significant shifts in domestic politics which cannot be guaranteed at this stage.”