1 February 2019

Jeremy Hunt says “extra time” may be necessary to deliver Brexit

The Foreign Secretary, Jeremy Hunt, yesterday raised the possibility that the UK’s departure from the European Union might be delayed by a short period for technical reasons. Speaking on Radio 4’s Today programme, Hunt said that if the Government “ended up approving the [Brexit] deal in the days before the 29 March, then we might need some extra time to pass critical legislation.” The Telegraph reports that the Home Secretary, Sajid Javid, also privately believes that Brexit will need to be delayed, and has questioned the Prime Minister’s strategy of publicly insisting the UK will leave the EU on the 29th March. Nine cabinet ministers in total, including Justice Secretary David Gauke, Work and Pensions Secretary Amber Rudd, and International Trade Secretary Liam Fox, are thought to believe a delay is necessary. However, Transport Secretary Chris Grayling denied that the Government was “talking about extensions” to Brexit, saying that the focus should be on “getting on with the job of completing the deal.” The Prime Minister’s spokesman said that the Government remained committed to leaving the EU on 29 March.

This comes as the Leader of the House of Commons, Andrea Leadsom, announced yesterday that Parliament’s February recess would be cancelled in order to make more time to pass Brexit legislation. Speaking in the Commons, Leadsom said that the public “would expect that the House is able to continue to make progress at this important time.”

Elsewhere, the Guardian reports that a number of EU officials and diplomats fear that if the UK asks for an extension to Article 50, it would not be long enough to secure a deal, raising the prospect of a No Deal outcome in June.

Speaking on news channel France 24, Open Europe’s Henry Newman said, “The legal position is clearly that there’s going to be No Deal unless we can find a way of agreeing the deal. And [EU Commission] President Juncker can stand up and say many times that ‘this is the deal and you’ve got to agree the deal,’ but ultimately if Parliament doesn’t agree with him, what is the Prime Minster supposed to do other than come back to Brussels and try to find a way through?” Newman also told BBC Northern Ireland’s The View programme, “Ultimately, it is also in the interest of the EU to secure a deal…We are in touching distance of an agreement and it’s imperative that both sides recognise that not much compromise is required to get this over the line.” Newman is also quoted in the Financial Times Brexit Briefing, saying, “Conservative Eurosceptics must accept that there is no realistic prospect of replacing the backstop entirely, and the Labour party should remember that they voted to trigger Article 50, setting in train our exit from the EU. The customs union they are now calling for is already at the heart of the backstop of the current deal. It’s time to come together around a compromise.” Meanwhile, Open Europe’s Aarti Shankar discussed the latest developments in Brexit on the Guardian’s Politics Weekly podcast.

Source: BBC The Guardian I The Guardian II Open Europe Telegraph Henry Newman Financial Times The Guardian III

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PM offers Labour MPs extra constituency funding to back Brexit deal

Prime Minister Theresa May is reportedly preparing to offer a group of around 25 Labour MPs in Leave-voting seats extra funding for their constituencies in support for backing her Brexit deal. “There’s a willingness to look again at coalfield communities and make good the promises that former Labour governments failed to deliver,” a government source told the Times. “It’s about allowing Labour MPs representing Brexit communities to show that they have extracted something tangible in return for their vote. And, frankly, it’s not an unreasonable ask.” John Mann, the Labour MP for Bassetlaw, has publicly welcomed the suggestion, urging the Government to “show us the money” and calling for “a fund of sufficient size to transform our communities.” Mann, who voted for the Brexit deal, added, “This is not transactional… I am already voting for Brexit.”

However, other Labour MPs have expressed disapproval over the offer. One Labour MP told the Times, “It would be pointless for the Government to try to throw money at former coalfield areas while taking the economy down a low-skilled, low-paid route that would destroy those areas.” The Labour leader Jeremy Corbyn said, “Clearly, there has to be investment in those communities, but the Brexit plan proposed by Theresa May doesn’t solve that.”

Separately, there have been calls for the Labour Party to sanction MPs and junior ministers who rebelled on Brexit amendments in Tuesday’s votes. Corbyn said he was “very disappointed” and would be speaking to the MPs in question. A total of 25 Labour MPs broke the whip on Tuesday night – 14 voting with the Government, and 11 abstaining. They included 8 shadow ministers.

Source: The Times  The Telegraph BBC

Italian economy enters recession

Italy’s economy tipped into recession at the end of last year, according to latest figures. In the final three months of 2018, the economy shrank by 0.2%, following a 0.1% decline in the third quarter, the Istat statistics office said.

Source: BBC

Institute of Directors: 16% of firms relocating outside of UK due to Brexit

A survey conducted by the Institute of Directors (IoD), a business lobby group representing 30,000 firms, found that 11% of the 1,200 firms surveyed had activated relocation plans, 5% had plans to relocate, and a further 13% were considering relocating because of Brexit. Edwin Morgan, Interim Director General of the IoD, said, “It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies. Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that No Deal [Brexit] would bring are entirely unproductive.”

Elsewhere, the car industry has warned against Brexit uncertainty, after investment in the industry slumped from 2017 and production shrank by 9%. The Society of Motor Manufacturers and Traders (SMTT) said yesterday that investment in Britain’s automotive sector was £589m last year, nearly 50 percent less than in 2017 and the lowest since the 2008 financial crisis. The Chief Executive of the SMTT, Mike Hawes said, “A lot of [investment] is on hold because until you see what the future is, do you have the confidence to invest in that plant when there is that sort of uncertainty?”

Meanwhile, pharmaceutical company Johnson & Johnson has started stockpiling emergency trauma packs in fear of delays at the border in  a No Deal Brexit. The head of NHS England said, “What we are doing is reviewing the tens of thousands of individual medicines, medical devices and other products that the health service uses, making sure that the manufacturers of those products have got extra buffer stockpiles.”

Separately, major banks in London have increased their recruitment – listing 1,545 new roles, with only 301 new jobs listed in Germany and France.

Source: Institute of Directors Reuters I Reuters II Guardian

UK could be subject to higher trade tariffs from non-EU countries in No Deal Brexit

The director of international agreements at the Foreign and Commonwealth Office, Sarah Taylor, said yesterday that in the event of a No Deal Brexit, UK exporters could be subject to higher tariff rates and non-trade barriers to non-EU countries including Egypt, Morocco and Ukraine. Speaking to the Commons International Trade select committee on Wednesday, Taylor also said that a number of EU free trade agreements can be transferred into UK law, but added, “I don’t have absolute confidence that every single agreement will be in place.”

Elsewhere, the UK and Chile signed a trade continuity agreement this week, with International Trade Secretary Liam Fox commenting, “This will ensure there is no disruption to British business exporting to Chile after we leave the EU and will mean consumers continue to benefit from low prices and more choice on supermarket shelves.” This comes as Fox will deliver a speech today, where he will call for the UK to “remember that there is a world beyond Europe and there will be a time beyond Brexit.”

Source: The Times UK Government Independent

Clash between UK and Spain over EU's reference to Gibraltar as a "Crown colony" 

A dispute has emerged between the UK and Spain over the EU’s decision to refer to Gibraltar as a “colony of the British Crown” in its emergency No Deal legislation. Several EU diplomats quoted by the Financial Times warn that Spain’s commitment to using this language signals its intention to extract further concessions on Gibraltar in the event that the Brexit deal is reopened, or if there is an extension to Article 50. A UK Government spokesperson said, “Gibraltar is not a colony and it is completely inappropriate to describe in this way. Gibraltar is a full part of the UK family and has a mature and modern constitutional relationship with the UK. This will not change due to our exit from the EU.”

Source: Financial Times

Flemish Minister-President urges EU to establish Brexit 'guarantee fund'

Minister-President of the Belgian region of Flanders, Geert Bourgeois, yesterday urged the EU to “consider a Brexit ‘guarantee fund'” and to “stand shoulder to shoulder with the regions and member states that…will be hit hardest by a No Deal Brexit.” He added that the Multiannual Financial Framework (MFF), the EU’s long-term budget, needed to contain “adjustment mechanisms” for “regions and companies that are most affected by Brexit,” pointing out that Flanders would lose 28,000 jobs and 2.6 percent of GDP in the event of No Deal.

Source: Politico

EU-Japan trade deal enters into force today

The Economic Partnership Agreement (EPA) between the EU and Japan enters into force today. The EPA removes the vast majority of tariffs on trade between the EU and Japan, as well as removing a number of non-tariff barriers between the two. A large part of a separate EU-Japan agreement on political and regional co-operation, the Strategic Partnership Agreement, also applies provisionally from today. Negotiations on investment dispute resolution continue. In a press release, President of the European Commission Jean-Claude Juncker said, “Europe and Japan are sending a message to the world about the future of open and fair trade. We are opening a new marketplace home to 635 million people and almost a third of the world’s Gross Domestic Product, bringing the people of Europe and Japan closer together than ever before.”

Source: European Commission

European Parliament recognises Juan Guaidó as Venezuelan interim President

The European Parliament yesterday recognised opposition leader Juan Guaidó as Venezuela’s interim president and called on EU countries to support him until “free, transparent and credible” presidential elections could be held. 439 MEPs backed the resolution, 104 opposed it and 88 abstained. A statement from the European Parliament called for the recognition of Guaidó “as the only legitimate interim president” until new elections can be called “in order to restore democracy.”

Source: Politico