31 July 2017

Cabinet ministers stake out positions on UK-EU movement of people and transition arrangements

Speaking to The Sunday Times about the Cabinet position on post-Brexit free movement, international trade secretary Liam Fox said, “We made it clear that control of our own borders was one of the elements we wanted in the referendum, and unregulated free movement would seem to me not to keep faith with that decision. I am very happy to discuss whatever transitional arrangements and whatever implementation agreement we might want, but that has to be an agreement by the Cabinet. It can’t just be made by an individual or any group within the Cabinet.” In response to suggestions from chancellor Philip Hammond last week that a transition period, in which “many arrangements [could remain] very similar to how they were the day before we exited the European Union,” could last up to 2022, Fox said, “If there have been discussions on that, I have not been party to them… I have not been involved in any discussion on that, nor have I signified my agreement to anything like that.”

Separately, in an interview this morning, health secretary Jeremy Hunt said that he “didn’t recognise this picture” of Cabinet divisions on Brexit, adding, “[What] we are completely united on as a Cabinet is that we want Brexit to make Britain more global, and not more insular.” He also said, “We’re not going to have a cliff-edge, but what we have said is that the implementation period must be complete by the time of the next election… It could happen earlier than then, but we want to make sure that businesses, NHS hospitals, everyone can carry on recruiting the people they need to continue to give the services that they offer.”

Elsewhere, foreign secretary Boris Johnson has denied any intention to resign over the chancellor’s suggestion that EU migration levels would remain similar immediately after Britain’s withdrawal in 2019. Following comments from the Liberal Democrat leader Vince Cable that Johnson was considering stepping down, a spokesperson for the foreign secretary said, “Boris and Philip Hammond are working closely to take the UK out of the EU and are not going to be diverted from that important task.” This comes as Gerard Lyons, former chief economic advisor to Boris Johnson, wrote in a piece for The Sunday Telegraph, “Our transition should be fixed and two years works well,” adding, “It is important that in the transition we do not agree to an existing arrangement, suitable for smaller economies, but not for us, the fifth biggest economy in the world. The deal needs to be bespoke.”

Meanwhile, in a blog, Open Europe’s Aarti Shankar writes that, under plans released by home secretary Amber Rudd last week, “Free movement of EU citizens will end in March 2019. However, the short-term system that is expected to follow will not look or feel vastly different…Instead, the finalised system to control EU immigration will only be in place after the transitional period. Any suggestion of a new visa scheme for EU nationals and the like will not be a reality for a number of years to come.”

Source: BBC News The Sunday Times The Press Association The Sunday Telegraph The Times Open Europe blog: Shankar

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Hammond tells Le Monde leaving the single market and customs union is “a legal necessity”, but UK wants to remain "recognisably European" on tax

Meanwhile, chancellor Philip Hammond told Le Monde in an interview that leaving the single market was “a legal necessity, just as it is for the customs union… It is not possible to remain in the single market, but it is possible to construct a relationship that has numerous characteristics of the single market.” On free movement, the chancellor said, “The British have no problem with people coming to work and study. There is no debate on highly skilled workers… but there are concerns about the large number of unskilled workers who have come, with repercussion for low pay grades. This has formed an important debate in the UK.” On taxation, Hammond said, “I often hear it said that the UK is considering participating in unfair competition in regulation and tax. That is neither our plan nor our vision for the future. The amount of tax we raise as a percentage of our GDP puts us right in the middle of the pack. We don’t want that to change, even after we’ve left the EU. I would expect us to remain a country with a social, economic and cultural model that is recognisably European.”


Post-Brexit customs checks will cost the UK £1bn per year, says report

A report by economic consultancy Oxera has suggested that customs checks required post-Brexit will cause significant delays at the border, require the construction of lorry parks in the South East, and entail economic costs of £1bn per year. Oxera’s head of transport Andrew Meaney said, “This is an extremely conservative estimate…The full cost is likely to be much higher.” He added, “The costs to logistics businesses and their customers, users of the road network and, eventually, jobs in the UK of a relatively limited increase in friction will be considerable.”

Separately, Ireland’s foreign affairs minister Simon Coveney told the Irish Sunday Independent that the UK was not in the right “mental space” to discuss a solution to the border issue on the island of Ireland. He said, “We need a unique solution for Northern Ireland. Saying we are going to put cameras on the border and make this as seamless as possible is neither imaginative nor flexible. Ireland needs to be very clear on that, so the British government understands the real sensitivities here and the political priority of this issue for Ireland.” Meanwhile, Open Europe’s Dominic Hinde argued in a blog that it is difficult to imagine an alternative to some form of border on the island of Ireland, but that this should be kept to the bare minimum through the implementation of a ‘light-touch’ border.


Khan says Labour could trump Brexit referendum with manifesto offer

The Mayor of London Sadiq Khan told the Guardian that Labour could use its next election manifesto to negate the Brexit referendum with a promise not to leave the EU, or to hold a second vote. Khan said, “For it to have credibility with the British public, there would have to be a Labour manifesto offer, because the public would say, not unreasonably, ‘Hold on a sec, we voted to leave and you’re now sticking two fingers up at us’.” He added, “You’d have to spell out, in black and white, what we’d do if we won the general election. What could trump the referendum result is us having a manifesto offer saying we would not leave the EU, or we would have a second referendum.”


Scottish government calls for whisky protections in any future UK-US trade deal

Calling for protections for Scottish whisky in any trade deal with the United States, the Scottish government’s economy secretary Keith Brown said, “The US made clear in the Transatlantic Trade and Investment Partnership discussions that they would support a relaxation of the definition of whisky, which would open the market up to a number of products which do not currently meet that standard… It is vital that we continue to have robust legal protection of Scotch whisky, which is why I have sought clarification from the UK Government as to whether Scotch whisky featured in discussions during last week’s trade visit by the Secretary of State for International Trade.” Brown added, “We need to be sure that any future deals work for Scotland and are not threatening the livelihoods of our farmers and producers. This is why all four UK governments should have oversight of the negotiations to ensure, as far as possible, that the right outcomes for everyone are secured.” A spokeswoman for the UK Government said, “Scotch is a UK export success story and we will support the industry so that it continues to thrive and prosper post-Brexit. The UK Government has a strong relationship with the Scotch Whisky Association and is working closely with the industry as we aim to secure the best possible deal for the whole of the UK.”


Luxembourg prime minister puts Brexit bill between £36bn-54bn

Xavier Bettel, the prime minister of Luxembourg, said, “Concerning the exit bill, it is important to underline that the British government took this commitment in the past and needs to honour it. It is not a penalty. The sum ranges between GBP36 billion and GBP54 billion.” In separate news, today marks the final day for EU member states to submit applications to host the European Banking Authority (EBA) and the European Medicines Agency (EMA) after Brexit, when it is expected that they will move from their current locations in the UK.


European Commission takes legal stand on Polish judicial reform

The European Commission has initiated the process that could lead to a legal case being mounted against the Polish government due to their attempts to limit the power of the country’s highest courts. The Commission served a formal notice to the Polish government setting out its “key legal concerns” regarding the government’s planned judicial reform, primarily focused upon the gender discrimination law on retirement ages, but also referencing the underlying issue of judicial independence. The Commission wrote, “By giving the minister of justice the discretionary power to prolong the mandate of judges who have reached retirement age, as well as to dismiss and appoint court presidents, the independence of Polish courts will be undermined”. Frans Timmermans, first vice-president of the EU Commission whose portfolio includes Rule of Law and the Charter of Fundamental Rights, said, “The Commission’s hand is still extended to the Polish authorities, in the hope of a constructive dialogue,” but Jaroslaw Kaczynski, a leading figure in Poland’s ruling Law and Justice party, remains insistent that the judicial overhaul is necessary.


OE’s Newman: a transition is necessary because Britain isn’t as ready as it ought to be

In a blog for Conservative Home, Open Europe’s director Henry Newman wrote, “It has become clear that the Cabinet has reached broad agreement that the UK will transition out of the European Union… Agreeing some sort of transition is sensible – it will help reassure business and the public. In an ideal world it may not have been necessary, but it is needed now because, simply put: Britain isn’t as ready as it ought to be.” He added, “The purpose of a transition is to allow as much as possible to stay the same the day after Brexit as before. It will mean a process of gradual divergence for the UK. The Government should not synchronise all of its transitional plans and there are already suggestions of some instances where there will be differences. There’s a strong case for establishing an independent customs policy, faster than we depart from the Single Market. And if much is staying the same, for example with free movement largely unaffected, the Government will be keen to demonstrate change in areas such as fisheries.” He concluded, “Crucially, a transition will help with the single biggest dispute between the UK and EU – the Brexit Bill. It will be easier for the UK to justify a bigger bill, which will smooth a better deal with the EU, if it can present this as ‘pay to play’ for the transition period.” Newman also featured on the Financial Times’ Brexit podcast.

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