15 January 2018

The Sunday Times: Theresa May to outline government position on future UK-EU relationship in February

The Sunday Times reports that Prime Minister Theresa May will present the government’s position on the future UK-EU relationship during the February parliamentary recess, after three more meetings of the Brexit cabinet committee. In a meeting of the cabinet committee this week, May wants ministers to agree the format and process of trade talks, what the future economic and security partnership should look like, and how to create a “level playing field” with the EU post-Brexit. This comes as Environment Secretary Michael Gove has said that he will call on the committee to agree that the UK will be not be bound by the EU’s Common Fisheries Policy during the transition period. Elsewhere, The Sun quotes Foreign Secretary Boris Johnson as saying a situation where the UK became “just another Norway” would mean the referendum vote had been “a total waste of time”. The Sun also quotes him saying, “I’d rather us stay in than leave like that.”

Speaking on ITV’s Peston on Sunday, Labour leader Jeremy Corbyn said the party is “not supporting or calling for a second referendum,” reiterating the pledge to give MPs a “meaningful vote” on the final Brexit deal. Corbyn also criticised those calling for the UK to remain in the EU single market after Brexit, saying, “The single market is dependent on membership of the European Union.” He added that the UK would “obviously” be in “a customs union” with the EU after Brexit, but stressed that some of the existing arrangements would have to change. He said, “There are aspects of the single market one wants to think about such as the restrictions on state aid to industry, which is something that I would wish to challenge.”

Corbyn added that Labour would not support the EU Withdrawal Bill in its current form, saying, “We’ve got the vote coming up this week on the EU withdrawal bill, we’ve set down our lines on that, which are about democratic accountability, are about protection of workers, environment and consumer rights, and are about human rights across Europe. If our tests are not met by the government, then we will vote against the bill.”

Elsewhere, former UKIP leader Nigel Farage said that the Brexit vote could be reversed. He added, “The Remain side are making all the running. They have a majority in parliament, and unless we get ourselves organised we could lose the historic victory that was Brexit.”

Source: The Sunday Times The Sun BBC News Bloomberg The Guardian

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Hammond: Trade deal excluding financial services is not ‘realistic’ for the UK

In an interview with German newspaper Welt am Sonntag, Chancellor Philip Hammond said that a post-Brexit trade deal with the EU that excludes financial services is not ‘realistic’ for the UK. Hammond said, “More than 80 percent of our economy is services…To enter into an agreement on goods with no agreement on services would be a very one-sided arrangement and I don’t think that could be attractive for us.” However, he added that such a deal would also not be beneficial for the EU, saying, “Why should you cut yourself off from the world’s leading financial center right on your doorstep and find yourself beholden to other centers like Hong Kong, Singapore, New York or Tokyo? That would be crazy in my view.” Hammond also said the EU should clarify their vision for their future relationship with the EU, saying, “You in Europe must develop an idea about what the future looks like. We want to know: What’s your vision?”

Separately, EU Brexit negotiator Michel Barnier is expected to meet today with pro-EU MPs in Brussels. The group of MPs includes Conservative MPs Anna Soubry and Dominic Grieve, as well as  Labour’s Chuka Umunna. According to the Guardian, Barnier is looking to engage directly with British parliamentarians in addition to UK government officials.

Source: The Guardian Politico

Brexit may see UK and France "drifting apart" and risk defence and security cooperation, warns former Ambassador

Former UK national security adviser and former Ambassador to France Lord Ricketts has warned that France and the UK need to increase bilateral meetings in order to prevent the countries “drifting apart” post Brexit, potentially affecting defence and security cooperation. Lord Ricketts argued, “Brexit will not weaken the case for close UK-French defence and security cooperation but it will change the context and create the risk of the two countries drifting apart.” He added that cooperation on counterterrorism and cyber threats has “become even closer in response to recent terrorist attacks. It is crucial that Brexit does not adversely affect this.”

This comes after reports from the Financial Times reported that French President Emmanuel Macron is expected to use this Thursday’s Anglo-French summit to push for UK participation of the European Intervention Initiative (EII) post-Brexit. The Financial Times reports that people familiar with the agenda of Thursday’s meeting at Sandhurst confirmed that the issue will be discussed. A spokesman for the Ministry of Defence said, “The UK is fully committed to the security of Europe and we continue to preserve a close relationship with our European allies.” Elsewhere, Reuters reports that France seeks to renegotiate parts of the Le Touquet accord governing the British border in Calais. According to an unnamed French government official, the French “understanding is that they [UK] will pay more. The question is how much and for what […] we’re talking tens of millions of euros.” France also expects the UK to take in more asylum seekers, Reuters reports, in a move that would see an “additional protocol” added to the accord. The French source added, “Nothing is locked in yet. The British have shaken on nothing but there’s a lot of pressure on them.” Should no agreement be reached, France could tear up the existing agreement, the official said, yet adding that this was in neither side’s interest. Reuters cites unnamed officials of the Conservative Party branding the idea of the UK paying more as “absurd.”

Source: The Guardian Financial Times Reuters

Home Affairs Committee immigration report urges government to scrap 'tens of thousands' target

A report published by the Home Affairs Committee of the House of Commons has said the government should abandon its goal to reduce net immigration to the tens of thousands, and immigration policies should instead reflect the country’s needs as well as “humanitarian obligations”. The report states the unrealistic target “is not working to build confidence” and that the “discrepancy” with actual migration figures undermines the immigration system’s public image. It added that the government was failing to tackle illegal migration effectively, and that the lack of data on the issue “has allowed anxiety to grow unchecked and has been perceived as the government showing indifference.”

The report recommends a Canada-style model, or points system, which creates a framework of targets for different types of immigration, and it states that foreign students should be removed from the overall target.

Source: The Times BBC News

Deutsche Bank CEO says only hundreds of jobs will be moved away from the City due to Brexit

In an interview with the Swiss Neue Zürcher Zeitung, Deutsche Bank CEO John Cryan said that the bank will only move “several hundreds of jobs, at first” away from the UK because of Brexit. He said, “The number of 4,000 mentioned again and again in media reports is way too high.” He added that the bank’s booking center would “for sure” move to Frankfurt, but said, “This affects fewer jobs than many people think.”

Source: Politico

Bloomberg: UK-EU trade deal could include financial services

According to a survey of EU27 leaders conducted by Bloomberg, it is possible that the UK-EU trade deal will include financial services, even though there are divergences of opinion among the leaders. The survey found that the priority of the EU27 remains the unity of the bloc, but some member states have a softer stance on financial services than the EU Brexit negotiator Michel Barnier. Luxembourg Prime Minister Xavier Bettel said, “While I stick to the principle that there can be no cherry-picking, I still think that we should refrain from an orthodox or binary thinking,” adding, “My top priority would be to limit the negative impact for both sides. Pragmatism will be needed in these negotiations on both sides.” However, Italy’s junior minister for European affairs Sandro Gozi said, “It’s very difficult to see U.K. financial services being allowed to operate in the EU with the same access if the country leaves the single market.” He added, “all sectors are important for us; we’re interested in exporting our products to the U.K., including in the mechanical, mechatronics and agri-food sectors.”

Source: Bloomberg