11 October 2018

DUP could vote down the Budget over Brexit deal

Northern Ireland’s Democratic Unionist Party (DUP), on whose 10 MPs the Government relies upon for its majority, could vote down the Budget in Parliament later this month if the Government’s Brexit plans cross their red lines, according to the BBC and Sky. One DUP source told BBC Newsnight: “If we are not happy with what happens next week [in Brussels] we won’t be bounced into anything. If she doesn’t take our concerns on board, we will take the view that Theresa May is not the leader to take us through to a safe Brexit.”

This comes amid increasing DUP alarm that Downing Street is contemplating signing a deal on the backstop with the EU that would entail an all-UK customs union with the EU, but Northern Ireland-only alignment with the single market on goods. The BBC reports that while the pro-Brexit DUP would disapprove of an all-UK arrangement on customs, only the regulatory aspect of such a deal would cross their “nuclear” red line that Northern Ireland must be treated in the same way as the rest of the UK.

Meanwhile, the DUP’s Brexit spokesman Sammy Wilson writes in the Daily Telegraph that the party would not support  “any deal which includes such economically and constitutionally damaging arrangements,” warning, “The road which the leaks and briefings is outlining is the road to parliamentary defeat for any deal the prime minister [Theresa May] brings forward. She will not have DUP support, regardless of whether the Government tries to bribe, bully or browbeat us into accepting it.” This comes as Cabinet Office Minister David Lidington said on the ITV’s Peston show yesterday that the Prime Minister would only put her name to a deal that “treats Northern Ireland on a par as a full part of the United Kingdom.”

Responding to the DUP’s reported threats, Downing Street sources yesterday said that voting down the budget would breach the party’s confidence-and-supply arrangement with the Conservatives, with the consequence that the associated £1 billion stipend to Northern Ireland would be rescinded. The Budget vote will take place on 29 October.

Elsewhere, Prime Minister Theresa May has urged MPs from all parties to “put the national interest first” when deciding how to vote on the Withdrawal Agreement. This comes ahead of a meeting of Theresa May’s Cabinet Brexit Committee today, at which she will reportedly ask them to agree a backstop that would keep the UK in a customs union with the EU until a UK-EU trade deal is reached, according to the Telegraph.

Separately, the former Foreign Secretary Boris Johnson said yesterday that the backstop solution allegedly being negotiated between the UK and EU would leave the UK as “a permanent EU colony.”

Source: BBC I BBC II BBC III Sky News Boris Johnson (Twitter) Telegraph Sun Telegraph

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Michel Barnier sets out details for EU Irish backstop proposal

Speaking at the European Parliament yesterday, EU chief Brexit negotiator Michel Barnier said that under the EU proposal for a backstop to avoid a hard border on the island of Ireland after Brexit, customs and VAT checks would be carried out “in the least intrusive way possible,” and using already existing arrangements. He explained, “The only visible systematic checks between Northern Ireland and the rest of the UK would involve scanning the bar codes on lorries and containers, which could be done on ferries and at transit ports.” Barnier also said health and phytosanitary checks on live animals and animal products “must happen at the border because of food safety and animal health reasons.” He added, “There will be administrative procedures that do not exist today for goods travelling to Northern Ireland from the rest of the UK. Our challenge is to make sure those procedures are as easy as possible and not too burdensome, in particular for smaller businesses.”

Meanwhile, responding to the customs dimensions of the Government’s Chequers proposal for the future UK-EU relationship, Barnier yesterday said, “the [UK wants] their own external tariffs, all the while collecting European customs duties. That would generate loss of income for us, also VAT income for our member states.” Commenting on the suggestion of the UK aligning on EU rules for goods only, Barnier said, “This type of single market system ‘a la carte’ would be tantamount to giving a huge competitive edge to UK companies with respect to companies operating within the single market.”

Separately, UK and EU negotiators are reportedly close to agreeing a compromise on a backstop in which the whole of the UK stays in a customs arrangement with the EU temporarily. However, EU officials are reported as explaining that while the solution is meant to be temporary, it cannot yet have a termination date, with an official quoted as saying, “An insurance policy only ends when the risk is gone. And we cannot decide that now before negotiations on a future solution have even started.”

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The Telegraph: Northern Irish business groups open to EU’s backstop proposals

Following meetings in Brussels with EU negotiators, Northern Irish business representatives have told the Telegraph that they are open to some of the EU’s backstop proposals for regulatory checks between Northern Ireland and the rest of the UK. Stephen Kelly, the chief executive of the Manufacturing NI lobby group, said, “There was nothing we heard in Brussels that sounded insurmountable, and all the business groups present were agreed that a backstop is clearly better than ‘no deal’, and may yet deliver competitive advantages to Northern Ireland.” Declan Billington, the vice-chairman of the Northern Ireland Food & Drink Association lobby group and head of the animal feed manufacturer Thompson’s, added that he was encouraged by the “big concession” from the EU that UK authorities in Northern Ireland would still be considered a “competent authority” to certify goods from the EU if the backstop came into effect.

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UK contribution to European security after Brexit is vital, says Home Secretary

Following a meeting of the interior ministers of the European G6 [France, UK, Germany, Italy, Spain, Poland] in France, Home Secretary Sajid Javid told French newspaper Le Monde that cooperation in order to address threats such as terrorism and organised crime will continue even after the UK leaves the EU, adding, “Security should be part of unconditional subjects [in Brexit negotiations]. The other interior ministers know that the UK’s contribution to European security is absolutely vital.” On citizens’ rights, Javid said that EU citizens in the UK can stay “whether there is a deal or not,” warning the EU, “Citizens are not pawns in negotiations. We want for the [European] Commission to say as quickly as possible that in case there is no deal, [UK citizens] could still stay in the EU. This should have been done already.”

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5,000 City jobs expected to move to EU before Brexit day, says Treasury Minister

The Economic Secretary to the Treasury and City Minister, John Glen, told the House of Lords EU Financial Affairs Sub-Committee yesterday that he agreed with Bank of England estimates that 5,000 jobs were likely to move from the City of London to the European Union by March 2019. Glen added, however, that “We have not seen wholesale moves of large institutions to other cities in continental Europe.”

Separately, the Bank of England has asked UK lenders to prepare to provide six-hourly checks on their balance sheets in the immediate aftermath of a ‘no deal’ Brexit to prevent a sudden squeeze in credit supply, according to Reuters. These checks would cover deposits, loans, currency and derivative exposures as well as any changes in the cost of funding and lending rates, according to a senior industry source.

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National Audit Office warns of 'no deal' border chaos

Sir Amyas Morse, Comptroller and Auditor General of the National Audit Office (NAO), told MPs at the Brexit Select Committee yesterday that there could be chaos at UK borders in the event of a ‘no deal’ Brexit. Sir Amyas said that it was “inevitable” that the “most stress will be at the border” in a ‘no deal’ situation, expressing doubts that a new computer system for customs checks would be able to cope with increased demand. He also criticised the government for failing to fully inform civil servants of its Brexit planning, which has made them less able to prepare for a ‘no deal’ outcome.

Elsewhere, The Times reports that Whitehall officials are discussing the possibility of having to slaughter sheep en route to EU slaughterhouses if ports are closed in the event of ‘no deal’. Around 4,000 sheep are sent from the UK to the EU for slaughter every year, and the closure of ports would threaten the supply chain. One Whitehall source quoted by The Times said that although this mass slaughter was unlikely to happen, “the consequence for failing to plan [for ‘no deal’] would be terrible.”

The Times also reports this morning that civil servants have sought to warn ministers that preparations for ‘no deal’ are incomplete and require an acceleration of planning. Of the 300 “workstreams” in place to mitigate the effects of a ‘no deal’ Brexit, 13 are said to be “off track”, leaving Whitehall unprepared for such an event.

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Macron and ALDE to join forces for the European elections

According to Politico, French President Emmanuel Macron and Dutch Prime Minister Mark Rutte have reached an initial agreement to join forces for the upcoming European Parliament elections next year. Together with other liberal heads of government, they would bring together Macron’s La République en Marche (LREM) movement with the liberal group Alliance of Liberals and Democrats for Europe (ALDE), of which Macron is a member. Their planned cooperation has reportedly been confirmed by officials in The Hague, Brussels and Paris. Pavel Telicka, a Czech MEP and ALDE vice-president, also said, “An entity with Macron is in the pipeline.” The newspaper cites unnamed sources saying ALDE and LREM would campaign on a common platform, but only formalise their relationship after the elections were over.

Meanwhile, European Commission vice-president Frans Timmermans yesterday put forward his candidacy to become the ‘Spitzenkandidat’ of the centre-left Party of European Socialists during next year’s European elections, with the aim to become European Commission president.

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Bulgarian PM criticises “European pressure” over responses to journalist murder

Bulgarian Prime Minister Boyko Borissov has criticised “European pressure” on his government after the recent rape and murder of journalist Viktoria Marinova. Borissov insisted the murder was a purely criminal act, criticising alleged attempts by EU officials to link it to the country’s record on corruption and press freedom. This comes after European Commission Vice President Frans Timmermans wrote on Twitter, “Again a courageous journalist falls in the fight for truth and against corruption.” A man has been arrested in Germany in connection to the murder after Bulgarian authorities issued a European Arrest Warrant.

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President of Normandy warns No Deal Brexit poses a “major threat” to the region

In a joint public letter with ports and business leaders in Normandy, the President of the region, Hervé Morin, has warned, “A Brexit without an agreement…represents for our economy, and especially for the economy of our ports, a major threat.” The letter also criticises France for “dreaming of Brexit as though it were an opportunity, notably for the financial sector in Paris.” Morin also said in a statement yesterday, “Overnight, the UK will become a third country, and we would need to activate a series of measures at ports which do not exist today.”

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Imperial College London announces “unique” post-Brexit partnership with German institute

Imperial College London yesterday announced that it plans a “unique” post-Brexit partnership with the Technical University of Munich. Under this partnership, the two universities would appoint new academic staff jointly. This would allow the staff, whether based in London or Munich, to continue participation in EU research projects. The Technical University Munich said this partnership would “send a strong signal against the dangers of new barriers in the European scientific area.”

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Event summary: After Salzburg what next?

On October 9, Open Europe held an event at the House of Commons to discuss the next steps in Brexit negotiations after the Salzburg EU leaders informal summit, with:

  • Nick Boles, MP for Grantham and Stamford;
  • Gisela Stuart, former MP for Birmingham Edgbaston, and former co-Chair of Vote Leave’s Campaign Committee;
  • Henry Newman, Open Europe Director.

The debate was chaired by Juliet Samuel, columnist for the Daily Telegraph.

Listen to the event here. For a summary of the discussion, see Anna Nadibaidze’s new Open Europe blog.