13 September 2018

May: £39bn Brexit divorce bill could be reconsidered if no deal reached

Prime Minister Theresa May announced that in the event of no deal on a withdrawal agreement and political declaration on the future relationship between the UK and EU, the Government may reconsider their position on the £39bn financial settlement. During yesterday’s PMQs, May told the House of Commons, “We [the UK] are a country that honours our obligations,” but added that “the specific offer [the divorce bill] was made in the spirit of our desire to reach a deal with the European Union… Without a deal the position [on the divorce bill] changes.”

Elsewhere, writing for the Daily Telegraph today, Brexit Secretary Dominic Raab warns that in the event of a ‘no deal’ Brexit, “The Government would not pay the terms of the financial settlement, as agreed with the EU as part of the Withdrawal Agreement,” adding, “There’s no deal without the whole deal.” Raab also told the BBC this morning that while the UK would “recognise our strict legal obligations,” the amount it would pay in case of ‘no deal’ would be “significantly, substantially lower” than £39 bn.

This comes as the Government will later today publish a second series of 28 technical notices outlining the preparations and advice for businesses and individuals to deal with a ‘no deal’ Brexit scenario. The documents will reportedly touch upon sectors including procurement, driving licenses, mobile roaming, environment, EU space programmes and non-harmonised product regulations.

Separately, Theresa May is holding a meeting of the Cabinet on preparations for a ‘no deal’ Brexit, Politico reports.

Source: BBC The Daily Telegraph Press Association The Guardian Politico London Playbook

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DUP welcomes ERG proposals for Irish border solution

A report published by the Conservative Eurosceptic European Research Group (ERG) on how to solve the Irish border issue has been welcomed by the Northern Irish Democratic Unionist Party (DUP) as a “positive and timely development.” The ERG proposes establishing electronic processing of customs and VAT declarations between the UK and EU, and carrying out customs inspections and controls away from the border at businesses’ premises. It also suggests “establishing equivalence of UK and EU regulations” to overcome checks on product standard compliance, and calls to maintain “the island of Ireland as a Common Biosecurity Zone” to remove the need for agrifood controls. The deputy leader of the DUP, Nigel Dodds, said the report “accurately reflects the fact that the border issue is no impediment to the negotiation by the UK of a comprehensive trade deal with the EU.”

However, following the publication, a spokesperson for Prime Minister Theresa May said, “We have been working on the issue of the Northern Irish border for two years and we have looked at a significant number of potential solutions and we believe that the plan put forward by [the] Chequers [proposal] is the only credible and negotiable one.”

This comes as DUP MP Sammy Wilson has called on the UK government to ensure there is no regulatory border between Northern Ireland and Great Britain under the Irish backstop. Writing in the Belfast News Letter, he adds, “It is our view that the Prime Minister was foolish in ever agreeing the need for a backstop in the first place.”

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European Parliament votes in favour of disciplinary process against Hungary

The European Parliament (EP) yesterday passed a motion by 448 to 197 calling to initiate Article 7 disciplinary procedures against Hungary. The motion cited risks of Hungary violating several EU rules, including the independence of the judiciary, corruption, freedom of expression, academic freedom, and the rights of minorities and migrants. The decision will now be referred to the European Council. If there is unanimous agreement amoung the other member states to trigger Article 7, Hungary could be deprived of its voting rights. This is the first time the Article 7 procedure has been triggered by the EP. Hungarian Foreign Minister Péter Szijjártó called the vote a “revenge by pro-immigration politicians.”

This comes as Hungarian Prime Minister Viktor Orbán told the EP plenary session on Tuesday, “Whatever you decide, we will not accede to this blackmail. Hungary will protect its borders, stop illegal migration and defend its rights,” adding, “This report insults Hungary and the honour of the Hungarian nation. You believe that you know better than Hungarians what they need.” Separately, European Commission President Jean-Claude Juncker yesterday said in his annual State of the Union speech, “The Commission will resist all attacks on the rule of law. We continue to be very concerned by the developments in some of our Member States. Article 7 must be applied whenever the rule of law is threatened… The European Union is a community of law. Respecting the rule of law and abiding by Court decisions are not optional.”

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Central Bank Executive: "Britain will remain a global financial centre" post-Brexit

Alex Brazier, the Bank of England’s executive director for financial stability strategy and risk, has insisted that Britain “will remain a global financial centre” regardless of the outcome of Brexit. Speaking on a visit to South Wales, Brazier added that “London and the rest of the UK, and Cardiff as well, isn’t just a European financial centre, it is a global financial centre. So there may be some jobs moving as firms execute their contingency plans, but I don’t expect the big picture to change.”

Elsewhere, New York overtook London as the world’s most attractive financial centre, according to the Z/Yen global financial centres index released yesterday. The bi-annual index, which ranks 100 financial centres on factors such as infrastructure and access to quality staff, said that London’s score had fallen on account of the uncertainty surrounding access to EU markets after Brexit.

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National Audit Office: Delays may occur for UK food exports in ‘no-deal’ Brexit

The National Audit Office (NAO) warned yesterday that food and livestock could be delayed at the UK border in the event of ‘no-deal’. Writing in a report published yesterday, the NAO said “Without a significant increase in the UK’s veterinary capacity, Defra [the Department for Food and Rural Affairs] will be unable to process the increased volume of export health certificates it expects if there is no deal… If there are not enough vets, consignments of food could be delayed at the border or prevented from leaving the UK.”

Michael Gove, Secretary of State for Environment, Food and Rural Affairs, told the BBC’s Radio 4 Today programme that his department was preparing for “every eventuality”, however, the NAO said that many of the government’s plans were of “poor quality and lacked maturity”. Elaborating on this, the report said “By April 2019, Defra had developed detailed plans for 35 of its 43 work streams. However, it rated only six of these as complying fully with its planning standards… It is continuing to develop its plans for the remainder but does not expect to complete its work until September 2018”.

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European Parliament backs controversial copyright reform

The European Parliament yesterday voted in favour of a draft proposal that would change existing copyright law and could in the future require internet platforms such as Facebook and YouTube to pre-filter video, image and music uploads. The proposal, which would also require news aggregators to pay publishers and news outlets when hosting hyperlinks to their content, is partly aimed at protecting the rights of content creators. An earlier version of the proposal was rejected by the European Parliament in July. It has since been redrafted, amongst other things, to exclude smaller platforms from some of the obligations. The proposal still requires European Council approval.

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The Times: May to announce plans for strict post-Brexit immigration controls

According to The Times, Prime Minister Theresa May is set to announce strict post-Brexit immigration controls at a special cabinet meeting later this month. The new system is expected to end preferential access for EU citizens, with both May and Home Secretary Sajid Javid said to favour a global immigration scheme. It could also require EU citizens who want to live in the UK for more than six month to obtain a visa. Chancellor Philip Hammond and Business Secretary Greg Clark are reportedly likely to oppose these plans, but pro-Brexit Conservative MPs may welcome a decision to end preferential immigration terms for EU citizens.

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Neither UK nor EU27 companies are sufficiently prepared for Brexit, Port of Rotterdam warns

The external affairs manager of the Port of Rotterdam, Mark Dijk, has warned British and EU27 companies that “if [they] don’t prepare [for Brexit], then we will be in deep trouble,” adding that the current level of business preparedness was not enough. This comes as the Dutch Foreign Minister last week said that merely 18 percent of Dutch companies were sufficiently preparing for Brexit, with another Dutch official warning, “Probably the biggest worry at this stage is that those 35,000 companies [Dutch companies that do business with the UK] need to be aware that you have to do customs declarations for each and every shipment… If you just drive to the ferry, you will not be allowed on the ferry.” Meanwhile, Bloomberg also reports that the Port of Rotterdam was preparing itself for Brexit by expanding its digital infrastructure and hiring more customs official, as well as by exploring options for gaining further space.

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