7 November 2018

Attorney General backs compromise on “mutual review mechanism” for backstop

In a meeting of Theresa May’s Cabinet yesterday, the Attorney General, Geoffrey Cox, reportedly gave his backing to a “mutual review mechanism” for the ending of any temporary customs backstop between the UK and the EU. This comes after reports that the EU has recently shifted towards considering such a mechanism, which would involve an independent arbitration body. According to reports in the Guardian and the Spectator, Cox told the Cabinet that the EU’s shift was a “major step” towards a deal on the Withdrawal Agreement. Cox reportedly added that while such a mechanism would offer firmer legal guarantees if the UK could trigger it unilaterally, one that required mutual consent would not amount to a “veto” for the EU and would be easier to negotiate. However, the Spectator reports that the Foreign Secretary, Jeremy Hunt, warned that without a unilateral exit mechanism to leave the backstop, the Withdrawal Agreement would struggle to pass the House of Commons. According to the BBC, the Cabinet agreed that reaching a deal this month would be significantly preferable to reaching one in December, though the latter would not be impossible. A Downing Street source told the Sun, “Everyone agrees this has to be wrapped up by Christmas.”

Meanwhile, a spokesman for Theresa May said the Prime Minister wanted a deal with the EU, but “not at any cost,” adding, “Don’t be under any illusion, there remains a significant amount of work to do.” According to the Guardian, officials from both the Attorney General’s Office and the Department for Exiting the European Union (DexEU) will now start work on a detailed proposal for a backstop review mechanism. A second Cabinet meeting is expected later this week.

Elsewhere, the EU’s chief Brexit negotiator Michel Barnier yesterday told Belgian broadcaster RTBF, “I am not, as I am speaking to you this morning, able to tell you that we are close to reaching an agreement [on the Irish border].” Speaking later at a press conference in Slovakia, he added, “Today we’re not there yet. The clock is still ticking and we will continue the work. Choices have to be made on the British side to finalise this deal.”

Separately, 14 British MEPs have written to their colleagues in the European Parliament urging them to lobby their governments for an extension of the Article 50 process. Most of the 14 are Labour MEPs, but the list also includes MEPs from the Greens, Liberal Democrats, SNP and Plaid Cymru, as well as one Conservative.

Source: Spectator ITV (Twitter) Belfast Telegraph Guardian I Guardian II

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Possible Government plan to sell Brexit deal leaked to BBC

The BBC has seen leaked Whitehall notes detailing a possible timetable for how the Government might try to present a Brexit deal. The timetable included the timing of a speech from the Prime Minister at a CBI conference later this month, as well as asking foreign leaders, business figures and policy experts for their support in selling the deal to MPs and the public.

A Government spokesman said, “The misspelling and childish language in this document should be enough to make clear it doesn’t represent the Government’s thinking. You would expect the Government to have plans for all situations — to be clear, this isn’t one of them.”

Separately, Theresa May has announced the formation of five new “business councils” to advise the government on how to create the best conditions for business after Brexit. With representatives from a variety of different sectors, Mrs. May said that the councils would “advise us on the opportunities and challenges facing business as we shape the UK for the future”.

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Sinn Fein: Leo Varadkar has "lost his nerve" on backstop

The leader of Sinn Fein, Mary Lou McDonald, has accused Irish Taoiseach Leo Varadkar of having “lost his nerve” on the backstop after he signalled that he was prepared to agree to a “review clause” to be included in the Withdrawal Agreement. McDonald said that “by even entertaining any notion of a review” the Taoiseach would be “signing up to an arrangement that is less than enduring, in other words that is temporary.” She also accused the UK Government of having “rowed back” from commitments made last December.

Meanwhile, the leader of the Irish Labour Party, Brendan Howlin, has said that a No Deal Brexit was becoming a frightening reality for Ireland and urged the Taoiseach not to be “out-manoeuvred or bullied into a position that is not in the interests of the Irish people.”

Earlier, Sir Jeffrey Donaldson, the Chief Whip of the Democratic Unionist Party (DUP) at Westminster, tweeted that it “Looks like we’re heading for no deal,” adding that “Such an outcome will have serious consequences for economy of [the] Irish Republic. In addition, [the] UK won’t have to pay a penny more to [the] EU, which means [a] big increase for Dublin.” The DUP leader, Arlene Foster, endorsed Donaldson’s comments, adding that a No Deal Brexit is “the trajectory we’re on.”

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UK refuses to endorse EU aid projects, citing Brexit “bias”

The UK Government has refused to endorse EU spending on aid projects for the first time, citing alleged “bias” against UK-based organisations over Brexit. In a vote in the European Council over the allocation of the bloc’s £26.5bn development budget, the UK abstained, and instead issued a statement accusing the European Commission of discriminating against UK organisations seeking funding. The statement, seen by the Guardian, said that the UK was “still waiting for a response to the concerns raised at a political level in August.” It added that the European Commission risked undermining “access to the best available expertise through open and fair competition, by discouraging UK organisations from bidding to implement programmes.”

The dispute arises from the Commission’s decision to include clauses in its contracts with aid providers, stating that all funding to UK NGOs will be terminated in the event of a No Deal Brexit. Claire Godfrey, the head of policy and campaigns at Bond, the UK network that represents 400 international development NGOs, said, “By including the clause the EU are continuing to effectively discriminate against UK NGOs, which could undermine efforts for future UK collaboration with European partners to deliver lifesaving aid effectively and efficiently.”

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British small and medium-sized factories face worst profit outlook in nine years

British small and medium-sized factories are expecting their worst profit outlook in nine years, according to the quarterly National Manufacturing Barometer. Just 39 percent of manufacturers think their profits will increase over the next six months, while 24 percent expect a drop. The survey shows that 52 percent of manufacturers think Brexit will be bad for their business, with 17 percent saying it poses a risk to their businesses’ survival. Simon Howes, managing director of the SWMAS consultancy co-running the survey, said, “What we are clearly witnessing is manufacturers putting the brakes on new investments and recruitment whilst some enter survival mode caused by ongoing Brexit uncertainties.”

Elsewhere, the automobile and industrial firm Schaeffler yesterday announced it was planning to close two production sites in the UK. Juergen Ziegler, the company’s regional CEO explained, “Brexit is clearly not the single decisive factor behind our decision-making for the UK market, but the need to plan for various complex scenarios has brought forward the timing.”

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UK chemicals industry not ready for Brexit, warns Lords committee report

In a new report, the House of Lords EU Energy and Environment Sub-Committee warns that plans for post-Brexit regulation in the UK’s chemicals industry are “not progressing quickly enough,” warning about a potential “huge cliff-edge” after the UK leaves the EU. The committee added it was “highly unlikely” that the UK could negotiate participation in the EU’s chemical regulation system REACH before March 2019, which would mean the US losing access to the EU chemicals market.  The committee’s chairman, Peer Lord Teverson, said, “Although we welcome the Government’s aim to remain part of the REACH system after Brexit, its negotiation red line on the UK’s membership of the single market makes that highly unlikely.That means it urgently needs to be working on a Plan B, and that simply hasn’t happened, which leaves the sector facing a huge cliff-edge on the day we leave the EU.”

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French President: Europe needs "real army" to defend itself

French President Emmanuel Macron yesterday called for the creation of a “real European army” to protect the EU against “China, Russia and even the United States,” adding, “We need a stronger Europe that protects.” In an interview with Europe 1 radio, he also said, “Europe, without a doubt, has become too ultra-liberal…It no longer permits the middle classes to live well. We must have a Europe that protects workers more.” He argued for a strengthening of European principles, including in the EU’s development, security and border management policies.

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Poland may accidently leave the EU, warns Donald Tusk

European Council President Donald Tusk has warned that Poland could accidently leave the EU, warning that the leadership of the country’s ruling Law and Justice (PiS) party may unwittingly “initiate some processes that lead to that outcome.” Tusk, who was Prime Minister of Poland from 2007 to 2014, was referring to disputes between Warsaw and Brussels over the rule of law. He said, “[former UK Prime Minister David] Cameron also had no plan to take the UK out of the EU. He came up with the idea of a referendum and then did everything to keep Britain in the EU, but [in the end] he led [the UK] out,” adding, “I fear that in Europe the will to keep Poland in the EU by all means might be smaller than in the case of the UK.”

Elsewhere, Austrian Chancellor Sebastian Kurz yesterday said Austria would do everything it could to support Serbia’s accession to the EU. He also said that “the EU will be complete when the Western Balkans countries join it.”

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US midterm elections: Democrats win majority in House of Representatives

The Democratic Party has won a majority of seats in the US House of Representatives, the lower chamber of Congress, in yesterday’s midterm elections. Meanwhile, President Donald Trump’s Republican Party has retained control of the US Senate.

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