15 April 2019

Government and Labour “testing” Brexit proposals as talks continue

Minister for Cabinet Office David Lidington yesterday told BBC’s Andrew Marr show that talks between the Government and the Labour Party will “certainly continue next week” but they will “not last for months,” as both sides are “testing” each other’s proposals to solve the Brexit impasse. He explained, “What we have found in terms of objectives… there is a fair bit that both parties would have in common,” adding, “If we are going to find an agreement there needs to be movement on both sides.” Lidington also said if parties could not break the deadlock, the House of Commons will have the opportunity to vote on “a set of options with a system for making a choice, with Parliament actually having to come to a preferred option,” adding, “The Government has said it stands ready to implement whatever Parliament decides.”

Elsewhere, Minister for Digital and Creative Industries Margot James yesterday suggested the Government should accept adding a customs union with the EU in order to pass the Withdrawal Agreement. She told BBC’s Westminster Hour programme, “If we can’t get the Prime Minister’s deal through…then what do we compromise on?” adding, “I think a customs union is worthy of consideration … I think people certainly in my part of the world people voted [Leave] out of a sense of sovereignty, wanting to make their own laws, and also the freedom of movement issue…I don’t recall much discussion about trade deals.”

Separately, a new Open Europe poll conducted by Hanbury Strategy reveals that when voters were told that the Prime Minister’s Brexit deal “would allow the UK to leave the EU, while protecting the rights of UK nationals in the EU and EU nationals in the UK, guaranteeing the Irish border stays open and providing tariff-free trade,” 48.5% said MPs should back the deal, and 24.1% said MPs should reject it. In these circumstances, 74.6% of Conservative voters and 58.1% of respondents who voted Leave in the 2016 Referendum answered that MPs should back the deal. When voters were told that not supporting the deal would require the UK to hold European Parliament elections at an estimate cost of £100m, 45.4% of respondents said Parliament should approve the deal, with 71.8% Conservative voters and 71% of Leave voters choosing to back the deal in those circumstances.

Source: BBC News Reuters Politico London Playbook Politico Sunday Crunch The Sunday Times

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Former minister quits Conservative Party to join Change UK

Former Conservative MP and Health Secretary Stephen Dorrell has announced his resignation from the party and said he would join the new Change UK party created by former Labour and Conservative MPs. The Observer reports that Dorrell could be willing to stand in European Parliament elections for Change UK.  Elsewhere, former Conservative MP Neil Carmichael has also left the party and is considering “standing in the European elections and would do so for the Independent Group [Change UK].”

Meanwhile, an Opinium survey for the Observer reveals that 29% of the electorate would vote for Conservatives in a General Election, while 36% would vote for Labour. In possible European Parliament elections, 17% would vote Conservative, with 29% supporting Labour, 13% supporting UKIP and 12% the Brexit Party.

Separately, a new study of opinion polls published by the Sunday Telegraph suggests that if a General Election were held, the Labour Party would win 296 seats, and the Conservative Party would lose 59 seats, with a total result of 259 seats. Professor Sir John Curtice, President of the British Polling Council, commented, “Much of this drop reflects disappointment among Leave voters – around a half of whom would prefer No Deal – at the Government’s failure to deliver Brexit.”

This comes as the Times reports that the Speaker of the House of Commons, John Bercow, wishes to delay is departure beyond this summer if Brexit remains unresolved. Bercow had been due to set out a statement after the Easter recess, setting out his timetable for departure.

Source: The Observer The Sunday Telegraph The Times

UK productivity growth expected to fall in 2019

The UK’s productivity growth in output for every hour worked is expected to fall to 0.2 percent in 2019, according to a forecast by the US research group, Conference Board. The annual productivity growth between 2010 and 2018 had been 0.5%, while the average figure in other equivalent economies for 2019 is expected to be 1.1%. Speaking at an International Monetary Fund (IMF) meeting last week, the Governor of the Bank of England, Mark Carney, said, “What has happened in the UK in the corporate sector has been a stall in business investment since the referendum…It is starting to feed through to the productivity statistics.”

Meanwhile, a study by Deloitte shows that 81% of Chief Financial Officers surveyed between 26 March and 7 April expect Brexit to result in long-term deterioration of the UK’s business environment. The survey also showed that 49% of CFOs were reducing capital expenditure as a result of Brexit.

Separately, analysis from the Agriculture and Horticulture Development Board has suggested that in the event of a No Deal Brexit, the Government would be forced to rely on cheap imports of agricultural produce from abroad, considerably worsening the financial stability of British farmers. The analysis also suggests that any form of Brexit would lead to a fall in UK potato farmers’ income, owing to competition from cheap imports and rising labour costs. The president of the National Farmers’ Union (NFU), Minette Batters, said that the Government should work “towards an outcome that will ensure farm businesses are in a position to continue supplying the nation with safe, traceable and affordable British food.”

Source: Financial Times Reuters The Times

Foreign Secretary to discuss Brexit developments with Japanese PM and Toyota

During a visit to Japan today, Foreign Secretary Jeremy Hunt will meet with Japanese Prime Minister Shinzo Abe and representatives of Japanese car maker Toyota to “reassure them that UK Government is focused on avoiding a No Deal Brexit and on agreeing a deal which that will ensure tariff-free frictionless trade between the EU and the UK,” according to the Foreign and Commonwealth Office. Hunt said, “The UK has always been an outward-looking, global power. That cannot change after Brexit. I look forward to our relationship with Japan getting even closer in the years after we leave the EU,” adding, “We recognise that Japan has many investments employing hundreds of thousands of people in the UK. We want strong cooperation to continue.”

Source: Reuters I Reuters II

Leader of Labour MEPs calls for party to support ‘confirmatory public vote’

Leader of the Labour Party in the European Parliament, MEP Richard Corbett, warned that “If Labour does not re-confirm its support for a confirmatory public vote on any Brexit deal in its manifesto, then it will haemorrhage votes to parties who do have a clear message,” adding, “If on the other hand we do offer clarity and a confirmatory ballot we could do very well.”

Meanwhile, Chancellor Philip Hammond commented about a possible second referendum saying, “It’s a proposition that could and, on all the evidence, is very likely to be put to Parliament at some stage.” He explained, “Even if you wanted to organise a referendum, you would probably be struggling to do it in the time available,” adding, “The Government’s position has not changed. The Government is opposed to a confirmatory referendum and therefore we would not support it.”

Speaking on Sky News, Open Europe’s Henry Newman commented, “What would that second referendum actually put to the people? [Shadow Brexit Secretary] Keir Starmer has been saying that this is a blind Brexit as we do not know where we’re heading, but if we don’t know where we’re heading, what are you actually confirming?”

Source: BBC News The Times The Guardian Henry Newman Twitter

Former 1922 Committee Chairmen: Conservative MPs could change rules to allow another leadership challenge before December

Writing in the Sunday Telegraph, two former Chairmen of the 1922 Committee of backbench Conservative MPs, Michael Spicer and Archie Hamilton, argue that Conservative MPs could change the rules surrounding the replacement of the party leader if they wished, in particular to allow for a second challenge to Theresa May’s leadership before December. They write, “The 1922 Committee drew up the current rules concerning confidence votes and have thus have ownership of them. These rules state that there is a 12 month period [in which the party leader may not be challenged again]… However, if MPs believe that this rule is an impediment to their proper function and responsibilities for the leadership of their Party it is quite within their right to change these provisions.”

Source: The Sunday Telegraph

Social Democrats win Finland's general election

The Social Democratic Party in Finland received 17.7% of votes in Finland’s parliamentary election yesterday, declaring victory for the first time since 1999. The right-wing populist Finns Party gained 17.5%, and outgoing Prime Minister Juha Sipilä’s Centre Party came fourth with 13.8%, while its centre-right government partner, the National Coalition Party (NCP), finished in third place with 17%. The close split will require coalition talks in order to form a government.

Source: BBC News Politico

EU prepares list of $20bn tariffs on US products

The European Commission has prepared a list of US products worth $22.6bn upon which it could impose tariffs, following US President Donald Trump’s threat to impose $11bn worth tariffs on EU products, Reuters reported on Friday.

This comes as the EU is expected today to approve launching trade talks with the US, with the Financial Times reporting that France is predicted to be the only member state voting against the trade talks.

Source: Reuters Financial Times

Zoe Alipranti: Greens most likely to capitalise on increasing German political division

In a new blog, Open Europe’s Zoe Alipranti argues that European elections in Germany are likely to reflect an increasingly fragmented political system, with Greens most likely to capitalise on increasing German political division. She states that the Christian Democratic Union (CDU) is predicted to suffer a slight decline in its vote share, whilst the Social Democrats (SPD) will lose almost half of their seats in the European Parliament. She adds, “The decline of establishment parties has been accompanied by the rise of both a liberal, pro-immigration alternative through the Green Party and a Eurosceptic alternative through the AfD [Alternative for Germany].” Alipranti concludes, “The German electorate is divided, with a sizeable constituency in favour of social liberalism and deepening of European integration and a significant chunk of socially conservative voters believing Germany has already compromised too much on Europe.”