9 May 2018

Theresa May could ask support of full Cabinet for “customs partnership” option

Prime Minister Theresa May could seek the support of the full Cabinet for her preferred option of the “customs partnership” model for post-Brexit customs arrangements with the EU, the Daily Telegraph reports. A Cabinet source is quoted saying, “There is a growing feeling that the Prime Minister is going to avoid another confrontation with the Brexit [Cabinet] sub-committee on a customs partnership, which she would lose, and just put the matter to a full Cabinet meeting where she has the numbers to win.”

Elsewhere, May’s spokesman yesterday said, “Following last week’s [Brexit war Cabinet] sub-committee meeting, it was agreed that there are unresolved issues in relation to both models and that further work is needed,” adding, “The Prime Minister asked officials to take forward that work as a priority.” This comes as the Brexit “war Cabinet” sub-committee will meet tomorrow to discuss preparations for a “no deal” Brexit.

Meanwhile, according to a Cabinet source quoted in ConservativeHome and the Daily Telegraph, May’s preference for the “customs partnership” option is informed by the assumption that this would be the only compromise accepted by the House of Commons, but suggesting that the government’s estimates of support for the UK remaining in the EU’s customs union post-Brexit might be overestimated. The source is reported saying, “We have managed to let this narrative establish that the Commons doesn’t support customs union exit and frankly we have only ourselves to blame,” adding, “The danger is that Number 10 will take a bigger gamble by avoiding the inevitable, and you end up pleasing no-one by trying to get a broken compromise.”

Separately, Irish Prime Minister Leo Varadkar yesterday said that the “customs partnership” model is a “welcome suggestion,” adding, “The view of the EU is that it isn’t workable in its current form but it is something that perhaps we could make workable.”

Source: Press Association The Daily Telegraph Reuters ConservativeHome The Daily Telegraph Bloomberg

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Post-Brexit Single Market membership “will not fit the British economy”, says Labour’s shadow foreign secretary

In an interview yesterday, Labour’s shadow foreign secretary, Emily Thornberry, said that post-Brexit membership of the EU Single Market – the Norway model – “will not fit the British economy.” She supported “remaining close to the Single Market” and suggested the UK should “end up in the same place” as countries such as Norway, but said “the mechanism that is being put forward [formal membership of the Single Market] is simply one that technically we don’t believe will work.” On the question of customs, Thornberry said, “We want to remain in the customs union. We don’t want any faffing around with any of the nonsense that the government is coming up with in relation to alternatives to the customs union.” Labour has previously outlined its position to leave the EU customs union and agree a new bilateral customs union. A Labour source later clarified, “Emily agrees with our policy which is to seek to negotiate a comprehensive UK-EU customs union, with the UK having a say over future trade deals and arrangements.”

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Government suffers further defeats in House of Lords over Withdrawal Bill

The House of Lords has yesterday passed by 245 votes to 218 an amendment to the government’s EU (Withdrawal) Bill calling for the UK to make staying in the European Economic Area (EEA), which allows for the free movement of people, goods, services and capital within the European single market, an objective of Brexit negotiations. Labour’s Lord Alli, who moved the amendment, said, “The customs union only will benefit our European neighbours in their imports,” adding, “Without an EEA equivalent it will damage our profitable export business.” Peers have also yesterday passed by 298 votes to 227 an amendment which states that the UK can replicate any new EU law into domestic law and can continue participating in EU agencies post-Brexit. The Bill is now due to return to the House of Commons.

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Jeremy Hunt supports continued UK participation in EHIC scheme post-Brexit

Health Secretary Jeremy Hunt yesterday said it was the government’s intention to secure continued participation in the EU’s European Health Insurance Card (EHIC) scheme post-Brexit, arguing it would be “beneficial” for both UK and EU citizens. This would allow UK citizens to continue to receive free or reduced price state healthcare in other EU countries. He added, “We’re very confident we will be able to negotiate reciprocal healthcare arrangements that protect those benefits, but our first preference, yes, will be a continuation of the current scheme.”

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Continued participation in Galileo satellite system is “litmus test” for future UK-EU security relationship, say UK government sources

UK politicians and civil servants are wary of the political consequences of being frozen out of the EU satellite navigation system Galileo post-Brexit, The Times reports, quoting an unnamed Whitehall source as saying, “There is concern about what this means for the future of our security partnership. The government said we were not going to make it a bargaining chip [in the Brexit talks] but the [European] Commission turning round and branding the UK a security threat has left us with concerns about what that means.” Government sources called the outstanding final decision by the European Commission on whether to allow UK continued participation a “litmus test” for both sides’ future security relationship, with UK ministers reportedly saying that “nothing is off the table” in the fight to remain a member of Galileo. The UK government is also considering measures to block British companies involved in the Galileo project from transferring sensitive technology to EU companies post-Brexit.

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DIT to receive emergency money to avoid jobs cuts in trade promotion

The Treasury has agreed to give the Department for International Trade between £5m and £10m worth of emergency money, the Financial Times reports. This comes after International Trade Secretary Liam Fox wrote to Chancellor Philip Hammond last week demanding extra money to avoid a planned cut of hundreds of jobs in trade promotion around the world, which would have been required in order to boost the number of staff focused on negotiating future trade deals. A Whitehall official yesterday said, “The chancellor wants to give the Department of International Trade what he can to ensure that it can do its job and create a global Britain.”

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92 percent of Irish want to remain in the EU, new study suggests

A new poll by the European Movement Ireland suggests that 92 percent of the Irish public want their country to remain a member of the EU, with 87 percent believing that their country had by and large benefited from EU membership so far. The share of people believing that Ireland should leave the EU in case of the UK’s departure fell from 30 percent in 2013 to 11 percent in 2018. The Irish population is divided on whether Brexit increases the likelihood of a united Ireland emerging, with 44 percent of respondents agreeing and 44 percent disagreeing. A majority of 59 percent believe that Ireland should be part of increased EU efforts on defence and security cooperation.

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UK, France and Germany restate commitment to Iran nuclear deal after Trump announces US withdrawal

US President Donald Trump yesterday announced that the US will withdraw from the Iran nuclear deal and will reintroduce both nuclear sanctions and “the highest level of economic sanctions” on Iran. Following Trump’s announcement, the UK, France and Germany released a joint statement, saying, “Together, we emphasise our continuing commitment to the [Iran nuclear deal]. This agreement remains important for our shared security…. We urge all sides to remain committed to its full implementation and to act in a spirit of responsibility.” Elsewhere, the EU’s foreign policy chief, Federica Mogherini, said the EU was “determined to preserve” the deal as long as Iran continues to comply with the terms.

Separately, the EU’s spokesperson for foreign affairs, Maja Kocijancic, yesterday said the bloc is “working on plans to protect the interests of European companies” in the event US President Donald Trump decides to withdraw from the international Iran deal. The decision by the US to stop waiving sanctions on Iran could create uncertainty for European companies that trade with Iran.

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Henry Newman: Customs Partnership proposal is bad politics, bad policy and a bad plan

Writing in Brexit Central, Open Europe’s Henry Newman argues that “pushing ahead with the Customs Partnership proposal is bad politics, bad policy and a bad plan.” He writes, “Officials admit that they aren’t certain it would work. Some supporters believe it helps unlock the Irish border issue but that’s not universally accepted. David Davis has apparently written to the Prime Minister raising profound doubts about its legality. The real reason the Partnership is still on the table is that Downing Street believes it offers the best hope of forestalling a customs union rebellion in Parliament, rather than because of its inherent benefits.” He notes, “One way forward could be for the Government to consider – as Open Europe has previously proposed – delaying the timetable on the UK leaving the Customs Union” by seeking a temporary customs union with the EU after the end of the transition period.