20 February 2019

Theresa May to continue Brexit talks with Jean-Claude Juncker

Prime Minister Theresa May will meet European Commission President Jean-Claude Juncker in Brussels today to continue discussions on the Irish backstop. The Prime Minister’s spokesman said there was “ongoing work” in relation to the options to include a unilateral exit mechanism, a time limit or alternative arrangements to the backstop, adding, “MPs have been clear that they need legally binding changes in relation to the backstop so the EU need to work with us in order to give Parliament the assurances it needs.” Ahead of the meeting Juncker said, “There is not enough movement for me to be able to assume that it will be a productive discussion.”

The Government’s plan would be to agree a legal text alongside the Withdrawal Agreement which would state that the backstop cannot be “indefinite,” the Daily Telegraph reports. If this is formally agreed this weekend at the EU-Arab League summit in Egypt, the Government could hold another ‘meaningful vote’ on the Withdrawal Agreement as soon as next week. The paper also reports that in this scenario, Attorney-General Geoffrey Cox will write a letter to MPs to inform them of a change of legal advice about the backstop. A senior Conservative official is quoted as saying, “The Prime Minister seems convinced that a letter from the Attorney General telling MPs that the backstop will be time limited will be enough to persuade them to vote for the Withdrawal Agreement.”

Elsewhere, in a speech last night, the Chancellor, Philip Hammond, said that the Government is no longer pursuing the Malthouse compromise as an alternative to the Irish backstop in the Withdrawal Agreement. The Times reports that the Prime Minister held a meeting with senior members of the European Research Group (ERG) of Conservative MPs, reportedly telling them that the UK and EU had agreed to set up a task force to consider the proposals after 29 March. Steve Barker, the ERG Deputy Chair, said they sought “further precision” about what they would be asked to vote for in the Withdrawal Agreement.

Separately, a European Commission spokesman yesterday said, “The EU27 will not reopen the Withdrawal Agreement. We cannot accept a time limit to the backstop or a unilateral exit clause – and further talks will be held this week to see whether a way through can be found that would gain the broadest possible support in the UK parliament and respect the guidelines agreed by the European Council.”

Meanwhile, Labour party leader Jeremy Corbyn will travel to Brussels tomorrow to discuss the party’s alternative Brexit plan with EU chief Brexit negotiator Michel Barnier.

Source: The Daily Telegraph I BBC News The Daily Telegraph II The Times The Guardian Reuters

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Eighth Labour MP quits party over "culture of antisemitism"

The Labour MP for Enfield North, Joan Ryan, has quit the party after accusing Labour leader Jeremy Corbyn of “presiding over a culture of antisemitism.” Ryan will sit with the newly formed ‘Independent Group’ in Parliament, the eighth Labour MP to do so. In an interview with The Times, Ryan said that she could not “be part of a party that allows racism to flourish,” adding, “[Corbyn has] allowed the Labour Party to become institutionally antisemitic, and he has a direct responsibility as leader of this party.”

Elsewhere, the Shadow Chancellor, John McDonnell, has pledged to hold “a massive listening exercise” to address the concerns of Labour MPs after seven resigned the party whip earlier this week. Speaking on Sky News, he also claimed that the “only disagreement we have had within the party is around how we handle Brexit. I think we are bringing people together on that.”

However, in a speech to the manufacturers’ organisation Make UK, Labour leader Jeremy Corbyn suggested that he had already consulted widely on party policy, saying, “Anyone who thinks they’re not being consulted is not taking up, in my view, the opportunities that are available there and open and ready for them at all times.” The Telegraph reports that the Labour Party is beginning its preparations for by-elections in the seats of the initial seven MPs.

Meanwhile, the Foreign Secretary, Jeremy Hunt, reportedly told his EU counterparts on Monday that the splits in the Labour party proved that they could not be trusted to deliver Brexit.

Source: The Times I The Times II Financial Times The Daily Telegraph The Guardian

Former European Commission President urges EU to seek compromise with UK

Former European Commission President Jose Manuel Barroso yesterday said there was “still room for some renegotiation” of the Withdrawal Agreement, adding, “I believe it is possible with some creativity and imagination to find some kind of compromise, it’s far from certain but we should still try. The EU should try to avoid being on the wrong side of the blame game if things go wrong.” He also argued, “Where there is a political will, there is a political way. Europe should be making an effort to accommodate some of the UK’s concerns.”

Elsewhere, French European Affairs Minister Nathalie Loiseau said Article 50 could be extended “either for some days for technical reasons,” or “If it’s for political reasons there has to be a real advance on something supported by a majority in UK Parliament which corresponds to our red lines.” German European Affairs Minister Michael Roth argued, “An extension would only make sense if we have new substantial ideas on the table. Otherwise there’s no point. And of course we would look at such a suggestion closely should the British in fact decide to ask for an extension…But this is solely the responsibility of the British, we can’t make such a suggestion.”

Meanwhile, European Commission President Jean-Claude Juncker yesterday said the UK would have to participate in the European Parliament elections if it wants to extend Article 50 beyond May, adding, “The [Lisbon] Treaty is the treaty and this is what it says.”

Source: The Daily Telegraph The Guardian Politico

Michael Gove warns of impact of No Deal Brexit on agriculture and food policy

The Environment Secretary, Michael Gove, said that the UK will “not lower [its] standards in pursuit of trade deals” after Brexit while warning that the gains of Brexit for food and farming policy would be put “at severe risk” if the UK leaves the EU without a deal. Speaking at the National Farmers’ Union (NFU) conference yesterday, Gove said there is “no absolute guarantee” that the UK would be able to continue to export food to the EU since the UK had not yet been listed as a full third country in the event of No Deal. Warning that the EU would levy the full external tariff on all food, he also spoke of delays at Calais caused by increased SPS checks and the need for new labelling on UK products of animal origin. Gove said that the NFU’s arguments in favour of tariff protection for British farmers “have been absolutely heard” and confirmed that a Government announcement on No Deal tariffs would be made shortly.

Elsewhere, the Irish Farmers Association (IFA) said that Gove’s announcement “demonstrates the gravity of the situation for the Irish farming sector.” The IFA called on Ireland’s Minister for Agriculture, Michael Creed, and EU Commissioner for Agriculture and Rural Development, Phil Hogan, to “come forward immediately with a plan for comprehensive market supports, including direct payments to Irish farmers in the event of a No Deal Brexit.” This came as Meat Industry Ireland, which represents the Irish meat processing industry, said that tariffs and other trade barriers in a No Deal Brexit “would decimate trade and seriously damage production in Ireland, resulting in jobs losses and a major hit to rural economies.”

Meanwhile, The Times reports that Gove disagrees with Chancellor Philip Hammond over the extent of protective tariffs for agricultural and food products in case of a No Deal Brexit. According to the paper, Gove is in favour of higher tariffs in order to protect UK farmers, while Hammond argues for lower tariffs to avoid a rise of prices for consumers. A Cabinet sub-committee was due to approve No Deal tariffs today, but will reportedly do so on Monday.

Source: UK Government The Guardian The Daily Telegraph The Irish Times The Times

Irish Government to publish No Deal contingency planning this week

The Irish Government is spending “hundreds of millions of Euro” on No Deal Brexit planning, Deputy Prime Minister Simon Coveney revealed yesterday, as it was confirmed that the Government will publish its contingency action plan on Friday. Speaking to RTE, Coveney said he “wouldn’t like to give the impression that we can easily manage a No Deal Brexit,” but added “we are doing everything we physically can to ensure we prepare as best we can to protect Irish interests.”

Meanwhile, the Irish Government has confirmed that the two extra MEPs allocated to Ireland would not be allowed to take up their seats if the UK has not left the EU by the time the newly elected European Parliament begins its term.

Separately, EU institutions have made contingency plans for No Deal that will give airlines a transition period of six months to align themselves with EU ownership rules. The provisional agreement has been made between the European Parliament and the European Council. The latter said that the plans are “exceptional in nature and strictly time-limited,” and that the agreement is conditional on the UK granting the same rights.

This comes as Vice-President of the European Central Bank, Luis de Guindos, told French newspaper Le Monde, “A disorderly Brexit would represent…a significant macroeconomic risk, at a moment when the European economy is already fragile,” adding that a decline in the UK’s GDP in case of No Deal would automatically affect the Eurozone.

Source: Irish Independent Newstalk Politico London Playbook Le Monde

Business Secretary: Honda decision to close Swindon plant shows need for Brexit deal to be “concluded swiftly”

Responding to Honda’s decision to close its plant in Swindon in 2021, the Business Secretary Greg Clark yesterday said, “Decisions like Honda’s this morning demonstrate starkly how much is at stake. A situation in which our manufacturers do not have the certainty they need about the terms under which two thirds of our trade will be conducted in 40 days’ time is unacceptable – it needs to be brought to conclusion without further delay. We will go on making sure that the argument that manufacturers put for a deal to be concluded swiftly is something that is heard loud and clear.” Clark said the move was “a devastating decision for Swindon and the UK,” and committed to convening a taskforce in Swindon with local MPs, business and trade union representatives “to ensure that the skills and expertise of the workforce is retained, and these highly valued employees move into new skilled employment.”

Elsewhere, EU research ministers yesterday agreed  on research missions and partnerships for the EU’s Horizon Europe research programme, with UK Science Minister Chris Skidmore saying the UK is “keen to ensure our researchers and science community are able to participate in its future through our possible association into the programme.”

Meanwhile, the SNP MP Tommy Sheppard has said that Brexit uncertainty makes it “very difficult” to advocate the cause of Scottish independence since “we don’t quite know what it’s an alternative to at the moment.”

Source: Sky News UK Government Science Business Chris Skidmore: Twitter The Times

New report: UK expected to lose political influence in the UN after Brexit

In a report published yesterday, the UK branch at the UN Association argues that the UK will lose political influence in the UN Security Council as well as the General Assembly after Brexit since its campaigns will not automatically align with the EU. The lead author of the report, Jess Gifkins, said, “The research showed the impacts of Brexit go beyond the UK and the EU to the UN, where the UK’s reputation is tarnished and its capacity for influence is weakened.” Sir Simon Fraser, the former Permanent Secretary at the Foreign and Commonwealth Office, said, “Fundamentally and structurally, I think our position, and our leverage in international institutions, will be weaker once we have left the European Union.”

Source: The Guardian

ONS: UK employment remains at record high

The UK’s employment rate remained at a record high of 75.8% in the last three months of 2018, according to data published by the Office for National Statistics (ONS) yesterday. The number of employed people grew by 167,000 in the last quarter of 2018, compared to the previous quarter, while average weekly earnings increased by 3.4%. Meanwhile, unemployment remains at a level of 4%, the lowest since 1975. However, Andrew Wishart, UK economist at Capital Economics, warned, “The surveys deteriorated more markedly in January, so a Brexit effect might start to weaken employment growth in the next batch of official data.”

Source: Financial Times BBC News

France and Germany agree on Eurozone budget and joint plan on industrial policy

France and Germany have reached a compromise on the Eurozone budget, outlined in a four page joint document, according to German newspaper Handelsblatt. The Eurozone budget will be designed to promote structural reforms and investment, but recipient countries would co-finance “a substantial part” of the investment costs. Existing funds fulfilling this purpose, such as the EU Cohesion Fund for structurally weak regions and the Investment Fund created by European Commission President Jean-Claude Juncker, could also be used for investments promoted from the Eurozone budget, according to the joint paper.

Moreover, France and Germany yesterday agreed on a joint plan for industrial policy in Europe. The plan aims to help local companies compete with foreign rivals and protect technologies from overseas takeovers. The five page strategy includes a proposal that would allow the European Council to override some antitrust decisions by the European Commission in certain “well-defined cases.” French Finance Minister Bruno Le Maire said, “Europe will only remain a great industrial continent if we’re able to join forces, change European rules that are now outdated and better protect ourselves.” He added that it is “the first time that France and Germany have put forward proposals to transform EU competition rules.”

Source: Handelsblatt Reuters

EP committee votes to start trade talks with US

The European Parliament’s International Trade Committee yesterday voted in favour of starting talks with the United States to lower tariffs on industrial goods with 21 votes in favour and 17 votes against. The resolution is not binding and will now go to a full chamber vote in March.

Elsewhere, German Economy Minister Peter Altmaier said, “The most difficult part in trade negotiations between Europe and the United States is starting now and talks should focus on reducing tariffs on industrial goods to increase the chances of a deal.” He added, “For some weeks and months now, we’re observing with concern that the United States is tightening its trade policies, that tensions are increasing…The impact can already be seen in the world economy, global growth has slowed.”

Source: Reuters I Euronews Reuters II

Juncker says Orbán's ruling party Fidesz must leave the EPP

European Commission President Jean-Claude Juncker yesterday said that Hungarian Prime Minister Viktor Orbán’s Fidesz party should leave the centre-right European People’s Party (EPP) group in the European parliament, adding, “The conservatives in Hungary in no way whatsoever represent Christian democratic values.” This follows the Hungarian government campaign which targeted Juncker for pushing migration policies that “fundamentally threaten Hungary’s security.” Responding to that, Juncker said “Against lies there’s not much you can do.”

Source: Politico