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Speaking ahead of the Scottish National Party (SNP) Conference in Glasgow, Scotland’s First Minister Nicola Sturgeon said that the SNP MPs in the House of Commons would not vote for a Brexit deal based on the Government’s Chequers proposal, telling the BBC’s The Andrew Marr Show, “We’ve always said our bottom line is membership of the single market and the customs union. I cannot envisage the SNP MPs voting for something that doesn’t contain that.” Sturgeon added that SNP MPs would “undoubtedly vote for” holding a Brexit referendum. She also said that plans for a potential second Scottish independence referendum would be decided after the Brexit negotiations are concluded, adding, “The future EU-UK relationship is the context in which Scotland would decide that question of independence, so it will shape some of the answers to questions people have.”
Elsewhere, a poll for the Sunday Times reveals that if the UK and the EU fail to reach a deal, support for Scottish independence would rise from 45% in September 2014 to 48%, while support for staying in the UK would fall from 55% to 52%. Meanwhile, a poll published in the Sunday Herald suggests that in the event of a ‘no deal’, support for Scottish independence would reach 52%.
Open Europe’s Henry Newman told the BBC’s The Andrew Marr Show yesterday that the circumstances in “which we could get to a ‘no deal’ will be crucial,” saying, “If we got to a ‘no deal’ because of what was seen by the British and Scottish people as the intransigence of the EU side, this is different from [Prime Minister] Theresa May just leaving the negotiating table.”
BBC The Andrew Marr Show Interview Transcript The Sunday Times The Sunday Herald BBC The Andrew Marr Show
Irish Foreign Minister Simon Coveney yesterday told Sky News Ridge on Sunday that the Withdrawal Agreement was “90% agreed in terms of text,” adding that the chances of reaching an agreement “are good, because I think the consequences of not getting a withdrawal treaty agreed are very very negative indeed for the UK, also for Ireland and indeed for many countries in the EU.”
Elsewhere, European Commission President Jean-Claude Juncker told Austrian newspapers that the EU’s “will to reach an understanding with the British government is unbroken,” adding that an agreement can be reached at the October European Council Summit, and, “If not, then we will do it in November.” Juncker also said that the Withdrawal Agreement and the political declaration on future relations cannot be separated. However, Coveney said on the political declaration, “Nobody is talking about signing off on the future relationship and all of the detail of what the trading environment will look like.”
Meanwhile, European Council President Donald Tusk said on Saturday, “I have hope close to certainty that we will manage to reach an agreement both on exit and on best possible future relations … I hope that it will be possible to avoid major losses on both sides,” adding, “We will try for it in October … and I think there is a chance to have an accord by the end of the year.”
Separately, the EU is reportedly planning to offer the UK a “supercharged” free trade deal which contains “30 to 40 percent” of the Government’ Chequers proposal, and allow for “as frictionless as possible” trade arrangements. In return, the EU would demand stronger level playing field commitments from the UK.
Politico Sunday Crunch
The Daily Telegraph
Eurosceptic Conservative MPs would agree to the Government’s proposal to keep the whole of the UK in the EU customs union in order to reach an agreement over the Irish border issue, but only until 2022, The Times reports.
Elsewhere, according to The Guardian, Prime Minister Theresa May plans to lobby dozens of Labour MPs in order to gain support for a Brexit deal based on the Government’s Chequers proposal when the agreement is put to vote to the House of Commons. The Daily Telegraph reports that the Government’s whips office is conducting talks with 25 Labour MPs to gain their votes for the deal.
The Daily Telegraph
The European Commission will this week reveal plans for contingency measures to cope with a potential ‘no deal’ Brexit scenario, the Financial Times reports. The measures, applied on a unilateral basis until December 2019 with the possibility of being revoked without notice, do not contain arrangements on customs or transport, and would not give airlines extra transition time to meet the EU’s ownership requirements in order to continue operations. The Commission would also encourage member states not to relax customs and agricultural controls and not to strike bilateral deals with the UK after Brexit. An EU diplomat is quoted as saying that the Commission would adjust the document draft according to the state of Brexit negotiations, explaining, “It will be harder if it all gets stuck and softer if things are going well.”
A diplomat cited in Le Figaro has denied that the EU is using the publication of its ‘no deal’ plans as a means of putting pressure on the UK in the final part of the negotiations. Another diplomat also told the paper, “The British are taking a big risk if they think they can play this out [until the November summit]. If the block [in progress] is evident at the October summit, the mood of the 27 [member states] will change very quickly…in the days that follow, the tone will change.”
Japanese Prime Minister Shinzo Abe has said the UK would be welcomed “with open arms” if it wanted to join the Trans-Pacific Partnership (TPP) trade agreement after Brexit, the Financial Times reports. The TPP is an agreement between 11 pacific countries, including Japan, Vietnam, Canada, Mexico and Australia, but not the US. Abe also said that while the UK’s position as a gateway to Europe would be weakened following Brexit, it would remain a country “equipped with global strength.” He stressed Japanese businesses’ need for a Brexit transition period, urging both the UK and the EU “contribute their wisdom and at least avoid a so-called disorderly Brexit.”
The Sunday Telegraph reports that a group of Eurosceptic Conservative MPs from the European Research Group (ERG) would agree to proposals of EU officials carrying out customs checks at UK ports in order to reach a Canada-style free trade agreement with the EU and solve the Irish border issue. Writing in the Sunday Telegraph, Conservative MP Iain Duncan Smith argued, “We can [conduct] regulatory and customs checks together in a way that respects the EU’s single market, by building on systems already in place at the Channel ports…This would not simply answer concerns about keeping the Northern Ireland border open, it would also ensure the channel ports continue to provide as frictionless trade as possible.”
Meanwhile, the Sunday Times reports that many Eurosceptic Conservative MPs said they would vote down the Government’s budget if the Prime Minister strikes a deal with the EU based on her Chequers proposal and if she tries to gain the support of Labour MPs for the Commons vote.
The Sunday Telegraph I
The Sunday Telegraph II
The Sunday Times
The European Central Bank (ECB) has instructed banks to limit their reliance on London-based ‘back-to-back’ financial trading by 2022. ‘Back-to-back’ arrangements allow trades and loans processed in the EU to be booked in London, thus allowing financial institutions to keep more of their staff and capital in the UK after Brexit. However, the ECB’s intervention seeks to restrict the use of this process. A senior bank executive told the Financial Times, “The ECB has been getting a lot tougher on back-to-back arrangements in the last few weeks.”
A survey conducted by accountancy firm Deloitte found that 13% of chief financial officers (CFOs) are more optimistic about their companies’ performance than they were three months ago. 79% of CFOs expect long-term business environment to be less favourable due to Brexit, rising from 75% in Q2 2018, the same survey found.
Elsewhere, outgoing Lloyd’s bank chief Dame Inga Beale told the BBC Andrew Marr Show, “We [Lloyds] will potentially lose the ability to pay any claims on old contracts [in a ‘no deal’ Brexit]…We want to confirm we can continue to service those contracts, and if we can’t we are going to be transferring contracts to our Brussels subsidiary.”
Writing in The Times Red Box, Open Europe’s Henry Newman argues, “No Deal would, by definition, mean that relations had broken down with the EU, including with its countries — above all France…The overall relationship will surely be damaged if negotiations collapse, especially if France is seen as the leader of hardliners in Brussels and of those trying to tempt away British business (as if economic success is a zero-sum game).” He notes, “Britain is Europe’s major intelligence player and, along with France, the premier military and development power. Because so much of the Brexit debate revolves around trade, we often neglect the wider implications of failure to reach an agreement…While the UK and EU could clearly weather No Deal economically, the long-term fallout for security and defence co-operation across Europe could be profound.”
Elsewhere, in a recent blog for CapX, Open Europe’s Pieter Cleppe assessed the state of the Brexit negotiations and looked at options for the Irish backstop. Following recent reports of a compromise emerging, one possible outcome would see “Britain accepting a regulatory border in the Irish Sea and the EU accepting that at some point there will be customs checks on the Northern Irish border. These will be unavoidable if Britain regains the right to set different tariffs than the EU, at least in the absence of customs checks within the UK.” Another option in the short term would “involve the whole of the UK and not just Northern Ireland staying in some kind of common customs union with the EU for a limited period.” This, however, would be politically difficult because “short of any other deal with the EU, it might mean that Britain wouldn’t regain its own trade policy.” Cleppe concluded that the EU must recognise the UK’s concerns over the backstop and that “some EU flexibility is needed for Britain to recover its own trade policy. Any deal which makes the UK leaving the EU’s common tariff regime dependent on an EU veto won’t be sustainable.”
Times Red Box
The UK and Germany on Friday signed a Joint Vision Statement which strengthens defence cooperation between the two countries. The document stated, “We will further strengthen the European pillar in NATO, contribute to European security and improve Europe’s resilience to security threats,” while Defence Secretary Gavin Williamson said, “Although we are preparing to leave the EU, our commitment to European security is resolute. The statement signed [on Friday] strengthens UK-German ties and bolsters the defence of two key NATO partners. This is an alliance we both hold dear.”
At the Salzburg Summit European Council President Donald Tusk said that economic aspects of the UK Government’s Chequers plan will “not work.” What are the options for the future Brexit negotiations? Join us on Tuesday, October 9 from 12:30 to 14:00 in the Boothroyd Room of the House of Commons to discuss what’s next after Salzburg, with:
Tickets are available on Eventbrite. Places are limited and will be allocated on a first-come, first-served basis.