12 October 2018

Several Cabinet members object to PM’s new backstop proposal

Prime Minister Theresa May faces objections from several Eurosceptic members of the Cabinet over her new proposal for a backstop to avoid a hard border on the island of Ireland. The Daily Telegraph reports that at least three ministers are prepared to resign over the plan, which involves the UK staying in a customs union with the EU until they sign a free trade deal, as the arrangement reportedly does not include an end date.

Elsewhere, when asked if she supports the Government’s Chequers proposal for the future relationship with the EU, Work and Pensions Secretary Esther McVey yesterday told the BBC she was “fully, 100% behind the Prime Minister,” without specifically commenting on the Chequers plan.

Meanwhile, the Democratic Unionist Party (DUP)’s leader, Arlene Foster, yesterday said that the EU’s proposal for a backstop arrangement would “place an effective one-way turnstile from Northern Ireland into the rest of the UK…Northern Ireland’s access to any new UK trade deals would also be regulated by Brussels. That is not the best of both worlds. That is the worst of one world,” adding, “The Prime Minister is a unionist. Many of her cabinet colleagues have assured me of their unionism. Therefore, they could not in good conscience recommend a deal which places a trade barrier on UK businesses moving goods from one part of the Kingdom to another.”

Separately, The Daily Telegraph cites two Government sources as saying that talks are ongoing about how to persuade the DUP to support the Prime Minister’s new backstop plan, with some ministers reportedly being prepared to make financial payments to the DUP.

Source: The Daily Telegraph BBC I BBC II The Irish News

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Sammy Wilson: DUP has “considerable support” from Conservatives over backstop

The DUP’s Brexit spokesman, Sammy Wilson, has said that his party has “considerable support” from the Conservative Party over their position on the Northern Ireland backstop. Speaking to BBC Radio Ulster’s Talkback, Wilson said that some Conservatives were “appalled, first of all, at the fact that the Government ever agreed to the nonsense of a backstop for the Irish border, a problem which isn’t even a problem anyway. And secondly that [Prime Minister Theresa May] has been prepared to even contemplate some of the suggestions which have been made by the European Union.” Wilson added that the next few weeks would be “crucial” for the negotiations, saying, “It would be negligent of us not to spell out that there would be consequences if the agreement which was made with us is broken by the government.”

Elsewhere, Ireland’s Foreign Minister, Simon Coveney, said that the Brexit negotiations were at a “very delicate stage,” but that he was “optimistic” that a deal could be reached. He added that there was “no firm agreed position on the Irish backstop from the two negotiating teams.”

Separately, the Northern Ireland branch of the CBI has issued a joint statement with its Irish equivalent, Ibec, calling for a “comprehensive customs union between the UK and the EU,” as well as agreement on the backstop. Fergal O’Brien, Ibec’s Director of Policy and Public Affairs, said, “The most urgent priority for business on the island of Ireland is to avoid a cliff edge hard Brexit.”

Source: The News Letter RTE The Independent Ibec

Construction work begins to address potential traffic in event of ‘no deal’ Brexit

Highways England has begun construction work on the M26 motorway in south east England to create a car park for trucks and lorries in order to prevent potential traffic queues in case of a ‘no deal’ Brexit scenario. A spokesman for Highways England said, “As part of wider resilience planning, Highways England has been asked by the Department for Transport to develop plans to utilise the M26 to hold heavy goods vehicles, should further capacity be required in the future.”

Elsewhere, Conservative MP Tom Tugendhat yesterday told the House of Commons that the reason behind the construction was not known to local politicians, adding, “It’s come to a pretty pass when [an MP] finds out that works have begun on a motorway to turn that motorway into a parking lot without consultation either with the local community or with surrounding [MPs].” In response, Transport Secretary Chris Grayling said, “I do not expect any of the contingencies that we have in place for a ‘no-deal’ Brexit to be needed because I’m confident we will reach a sensible agreement.”

Separately, responding to concerns about planes not being able to operate in case of a ‘no deal’ Brexit, Grayling said, “There is nothing the Government has said or done to imply that planes will be grounded or there will be no flights after we leave the EU. I give this House [of Commons] categorical assurance flights are going to continue.”

Source: Press Association Politico The Guardian

OBR report concludes impact of Brexit on future growth forecasts “likely to be relatively small"

In a Brexit discussion paper published yesterday, the Office for Budget Responsibility (OBR) said, “It is important to emphasise that any adjustment we do make to our potential growth forecast as a result of Brexit is likely to be relatively small compared to the degree of uncertainty surrounding the underlying path.” It also warned, “A disorderly exit [from the EU] might well result in temporary constraints on the supply of some imported products and domestic goods that contain imported components,” in the absence of alternative agreements. The body recognised that in a ‘no deal’ Brexit’, “It is possible that smaller deals on specific areas would be negotiated quickly, for example, allowing UK-based airlines to fly within the EU.”

Source: OBR

Open Europe event summary: A closer look at UK and EU proposals for a Brexit deal

At a panel debate in Brussels hosted by Open Europe, former ECJ judge and Belgian EU law Professor Franklin Dehousse stated, “It’s strange that the EU is willing to discuss customs, under Article 50, in the divorce stage, to avoid a hard border in Ireland, but is then unwilling to be open when the UK side puts other trade-related matters on the table.” He added “EU politicians are really trying to use the power they have to the maximum, but this is not intelligent,” pleading instead for an approach that leads to “a more sustainable outcome. He also issued criticism on the UK Government’s Chequers plan, noting that “to request that only regulations that are being checked at the border would not be applied, unlike other regulations, should worry businesses and the EU.” He also noted that “the EU talks about the indivisibility of the four freedoms, but it’s happy to negotiate today intensifying trade with Turkey, without bringing the freedom of movement of persons into play.”

Open Europe’s Director of Policy and Research Stephen Booth agreed, making the point that “the EU has been flexible when it comes to selective market access in its relationships with various different countries.” He also explained that “we shouldn’t expect a deal right away, as both sides are involved in a game of chicken.” He added, “It makes no sense for the UK, which is the sixth biggest economy [in the world], to not recover its trade policy at some point. It’s important for both the UK and the EU to get it right now, so we don’t end up in a continuous crisis.” He also noted, “Surely the EU should understand that it can’t request that the Northern Irish issue remains something that can block progress at every stage in the future.”

Source: Open Europe

Former UK ambassador to the EU criticises Government’s Brexit strategy

Sir Ivan Rogers, the former UK ambassador to the EU, has criticised the Government’s strategy over Brexit, saying in a speech on Wednesday that the UK is “still lost on campaign mode on fantasy island” and had shown “culpable naivety.” Rogers further argued that the EU is “never going to agree to some generalised equivalence system which opens up regulation/legislation effectively to joint decision-making between itself and the UK.” He added, “The aim of the [EU]27, perfectly legitimately… has been to maximise leverage during the withdrawal process and tee up a trade negotiation after our exit where the clock and the cliff edge can again be used to maximise concessions from London.”

Source: Cambridge University

Competition watchdog launches inquiry into transatlantic flights due to Brexit

The UK’s competition watchdog, the Competition and Markets Authority (CMA), yesterday launched an inquiry into the Atlantic Joint Business Agreement, a revenue-sharing deal for transatlantic flights operated by British Airways and three other airlines, citing Brexit as the main reason. A 10-year commitment from the airlines to make landing and take-off slots available to competitors will expire in 2020, and the CMA launched a fresh review of the agreement “to prepare for the time when the European Commission may no longer have responsibility for competition in the UK” after the UK leaves the EU.

Source: Press Association

Leopold Traugott: A Primer on the 2018 Bavarian Elections

In a new blog post, Open Europe’s Leopold Traugott looks ahead to Sunday’s elections in Bavaria. He writes that the elections “continue where Germany’s federal elections left off in 2017 – by further fragmenting the political space. The two established Volksparteien (major parties) of the centre-left and centre-right are predicted to tumble, while new contenders with clear messages on globalisation, immigration and European integration are expected to gain ground.”

The consequences of the elections, Traugott writes, could “reverberate deep into Germany’s government,” as both of Chancellor Angela Merkel’s coalition partners, the arch-conservative CSU and centre-left Social Democrats are “set for a painful defeat.” According to the latest polls, the CSU is expected to see its share of the vote drop from 47.7% in 2013 to just about 33-35%. For the SPD, polls suggest a painful slide from 20.6% to around 10-12%.

This, he adds, “comes as the far-right [Alternative fuer Deutschland] is set to enter the Bavarian Parliament for the first time this weekend – polls expect the party to jump from zero to 11-13% in this election – while the left-liberal Greens are predicted to double their vote, from 8.6% to 16-18%.

Traugott is also quoted in The Atlantic, saying that the key problem for the CSU is that “they’re bleeding out voters to the AfD on the right, but if they want to stop that movement, they end up losing voters at the centre… It’s a difficult problem for them to square.”