24 January 2019

Michel Barnier rejects time-limited backstop, but says changes to the future relationship are possible

The EU’s chief Brexit negotiator, Michel Barnier, said in Brussels yesterday, “The question of limiting the backstop in time has already been discussed twice by European leaders. This is the only possible option because an insurance is of no use if it is time limited… We cannot tie the backstop to a time limit.” However, Barnier appeared to signal that the EU would be more flexible about possible changes to the political declaration on the future UK-EU relationship. He said, “If the UK red lines were to evolve in the next few weeks or months the union would be ready immediately and open to other models of relationships which are more ambitious. We’re ready to rework the content and ambition of the political declaration.” Barnier had earlier told European media outlets that Brussels would be open to the UK remaining in the single market or establishing a customs union with the EU.

Barnier also warned, “There appears to be a majority in the Commons to oppose a No Deal but opposing a No Deal will not stop a No Deal from happening at the end of March.” He added, “To stop ‘no deal’, a positive majority for another solution will need to emerge.” This comes after several groups of MPs tabled amendments seeking to block or oppose a No Deal Brexit.

Separately, Barnier also said yesterday that in the event of No Deal, “We will have to find an operational way of carrying out checks and controls without putting back in place a border [in Ireland].” This comes after EU officials had previously suggested that it was “pretty obvious” that Ireland “will have a hard border” in the event of a No Deal Brexit.

Elsewhere, the Telegraph reports that the Prime Minister’s chief Europe advisor, Olly Robbins, has set out nine possible options to pursue in any renegotiations with Brussels. The nine options, sent to the Prime Minister in a memo on Sunday, include the possibilities of a unilateral exit mechanism or fixed end date to the backstop. Another option would see the regulatory alignment part of the backstop extended to the whole of the UK. The Telegraph reports that at least three of the nine options would entail a reopening of the legally binding Withdrawal Agreement.

This comes as May will today meet with the leaders of major UK trade unions including Unite leader Len McCluskey, the General Secretary of the British Trades Union Congress, Frances O’Grady, and the GMB’s General Secretary, Tim Roache.

Source: The Guardian The Telegraph Twitter Twitter Politico London Playbook

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Theresa May: Extending Article 50 will not “solve the situation”

The Prime Minister, Theresa May, said yesterday that delaying Brexit by extending Article 50 would not “solve the situation.” Speaking in the House of Commons at Prime Minister’s Questions, May said, “The decision remains the same – the deal, No Deal or no Brexit.”

Elsewhere, the International Trade Secretary Liam Fox said there are many MPs who “talk about delaying Brexit when what they really mean is not having Brexit at all.” He added, “The most calamitous outcome would be for Parliament, having promised to respect the result of the referendum, to turn round and say they wouldn’t.”

Meanwhile, the Times reports that the government would request an Article 50 extension if the Bill tabled by Labour MP Yvette Cooper passes and if the Prime Minister’s Brexit deal does not. The Bill would require the government to delay Article 50 if the deal does not pass in parliament by the end of February in order to avoid a No Deal Brexit. The Times quotes a government source as saying, “There is a difference in kind from the other amendments and Cooper’s,” adding, “The first are expressions of parliamentary will which, in theory, she could ignore. But Cooper is proposing legislation. If that passes there is nothing we can do. It’s massively unhelpful. We’d have a week to try to persuade the Commons not to back the bill or Brexit would be delayed and the pressure would come off the EU.”

Separately, HuffPost UK reports that MPs are urging Cooper to include an extension of Article 50 of three months rather than nine months in her Bill to the Government’s motion. This would change the date of the UK’s withdrawal to June 30, before the new European Parliament is formed. Labour leader Jeremy Corbyn met with Cooper yesterday in order to discuss a common plan which would get support from the Labour frontbench.

This comes as the Labour MP Caroline Flint suggested on BBC’s Politics Live yesterday that she will not vote for the Cooper Bill. The Don Valley MP said, “It’s not taking us any further forward, it’s another process-y device…I’m not inclined to vote for it,” adding that the prospect of a nine month delay to Brexit would be a “disaster.”

Separately, Conservative MP and Chairman of the European Research Group (ERG) Jacob Rees-Mogg has suggested that the government should suspend parliament sitting if MPs succeed in passing a bill to delay Brexit. Asked what could secure his support for the Prime Minister’s deal, he said, “It has to be clear that the backstop does not apply. The backstop is not Brexit.”

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EU Commission prepares No Deal contingency plans for fishermen

The European Commission yesterday adopted two legislative contingency proposals “to help mitigate the significant impact that a No Deal Brexit would have on EU fisheries.” One of the proposals is to allow EU fishermen to receive compensation for a temporary cessation of fishing activities, and the other is to amend regulations to ensure that the EU can grant UK vessels access to its waters only until the end of 2019, upon the condition of the UK granting reciprocal access. The Commission said in a statement that the proposals are “limited to these specific areas where it is absolutely necessary to protect the vital interests of the EU and where preparedness measures on their own are not sufficient…They will be temporary in nature, limited in scope and adopted unilaterally by the EU.”

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Businesses implement contingency plans over risk of No Deal Brexit

A number of businesses operating in the UK have announced contingency plans over fears of disruption in the event of a No Deal Brexit. The technology firm Sony will move its European headquarters from London to Amsterdam, while the carmaker Bentley has begun stockpiling parts. The chief executive of Bentley, Adrian Hallmark, said that a No Deal Brexit could cost the business millions of pounds a day, adding, “It would put at fundamental risk our chance of becoming profitable.” Elsewhere, Dyson announced that it will move its headquarters from the UK to Singapore, although the company denied that the decision had anything to do with Brexit.

Elsewhere, Airbus CEO Tom Enders has warned that the company may move from the UK if there is a No Deal Brexit. Enders said, “Of course it’s not possible to pick up and move our large UK factories to other parts of the world immediately. However, aerospace is a long-term business and we could be forced to redirect future investments in the event of a no-deal Brexit and make no mistake, there are plenty of countries out there who would love to build the wings for Airbus aircraft.”

This comes as the CBI has warned that the uncertainty over Brexit has led to a considerable decline in optimism in the UK manufacturing sector over the last three months. The CBI’s head of economic intelligence, Anna Leach, said, “The manufacturing sector is clearly feeling the pinch of Brexit uncertainty, with worsening business sentiment coinciding with an ongoing reluctance to invest in new facilities, machinery, innovation and training.”

Separately, the Financial Times reported yesterday afternoon that sterling had reached its highest level since November, at $1.305. The rise in value came as Shadow Chancellor John McDonnell suggested that the Labour Party could give its support to an amendment delaying Article 50. However, the head of European FX strategy for BMO Capital Markets, Stephen Gallo, suggested that this was a short-term surge, saying, “It’s just noise at this stage because having an extension to Article 50 doesn’t mean that there is a new solution to Brexit.”

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Spain to push for Gibraltar concessions in No Deal Brexit

The Telegraph reports that Spanish officials have pushed for the addition of a footnote in the EU’s legislative proposals for a No Deal scenario, which would allow for movement across the border between Spain and Gibraltar without a visa. The footnote also states that, “The territory is registered on the list of Non-Self-Governing Territories of the United Nations, subject to decolonisation”, in an attempt to move towards Spanish sovereignty over Gibraltar. The inclusion of the footnotes remains subject to approval from all 27 EU member states.

The territory has been under British jurisdiction since 1713 and in 2002 Gibraltar had a referendum which showed that close to 99% of its residents had a wish to keep it that way.

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Anthony Egan and Dominic Walsh: Are MPs close to ruling out a No Deal Brexit?

In a new blog, Open Europe’s Anthony Egan and Dominic Walsh take a look the legislation aimed at preventing a No Deal Brexit, and whether this goal can realistically be achieved. “To actually prevent No Deal, the Bill sponsors’ objective, it is not enough that Parliament opposes it,” they write. “Neither the Grieve Amendment nor Cooper Bill would automatically stop No Deal. However, if passed, both increase the likelihood of extending Article 50”, but this “comes with significant problems worth highlighting.” They conclude, “the fundamental choice that MPs must make remains between supporting a deal, No Deal or no Brexit. Extending Article 50 would merely delay the moment of reckoning.”