8 January 2019

Theresa May: Government “continuing to work on further assurances” from the EU

The Prime Minister, Theresa May, said yesterday that the Government is “continuing to work on further assurances” from the EU over the Brexit deal, “in relation to the concern that’s been expressed by Parliamentarians.” Speaking at a hospital in Liverpool, where she was launching her ten year plan for the NHS, May said that there had been “some further movement from the EU” at the December European Council and that she had been speaking to EU leaders in the intervening period. According to the BBC, Downing Street believes that EU leaders might be prepared to help the deal get through. A Whitehall source told the BBC that “there is a genuine sense they [EU leaders] want to avoid No Deal,” but added, “How they will help us is the big unanswered question.”

However, an EU Commission spokesman played down talk of renegotiation, saying, “Everything on the table has been approved and… the priority now is to await events” in the UK. The Telegraph also reports EU scepticism surrounding the idea of setting a start-date for the future trading relationship. One EU source told the paper, “How can the UK demand a commitment to deliver a trade deal by December 2021, when it cannot say what deal it wants?” The Telegraph also cites four senior EU sources as confirming that May’s Europe adviser, Olly Robbins “failed to move the ball” over the Christmas period. However, the Guardian reports that May could be offered an “exchange of letters” from EU leaders expressing their aim to conclude trade negotiations as quickly as possible.

Meanwhile, in a speech in Mali, the Irish Taoiseach, Leo Varadkar, said that “We don’t want to trap the UK into anything – we want to get on to the talks about the future relationship right away. I think it’s those kind of assurances we are happy to give.”

Elsewhere, the Labour leader Jeremy Corbyn yesterday tabled an Urgent Question in Parliament, asking Theresa May to make a statement on “progress made in achieving legal changes to the EU withdrawal agreement and the timetable in this House for the meaningful vote.” Responding for the Government, the Brexit Secretary Stephen Barclay said, “Securing the additional reassurance that Parliament needs remains our priority,” and confirmed that the meaningful vote would take place next week.

Open Europe’s Henry Newman appeared on BBC News yesterday, saying, “It’s likely that Parliament will vote the [Brexit] deal down, and that the Government will bring it again with some changes,” adding, “Part of the problem we are in is that Article 50 set a process in which either we leave with a deal or without a deal.” Newman further added that the backstop “is much less problematic than many people think.” Elsewhere, Open Europe’s Pieter Cleppe was interviewed by Euronews yesterday, saying, “It is unlikely that UK MPs will support this version of the [Brexit] deal, but with some relatively modest changes it should be possible.”

Source: BBC I BBC II Financial Times Telegraph Politics Home Open Europe I Open Europe II Guardian Irish Times

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Road Haulage Association criticises Government No Deal exercise as “too little too late”

The government yesterday trialled Operation Brock, a plan designed to reduce congestion and border disruption in the event of a No Deal Brexit. 89 lorries were involved in two test runs of the 20-mile lorry park operation. However, the Road Haulage Association’s chief executive, Richard Burnett, described the exercise as “too little too late,” adding, “This process should have started nine months ago…at this stage it looks like window dressing.” Dover MP Charlie Elphicke also criticised the exercise, saying, “We’ve got to remember 10,000 lorries visit the Channel ports every single day so a test with less than 100 is not even a drop in the ocean.” The Department for Transport said the test went well.

Elsewhere, the Financial Times reports that government-commissioned research carried out by UCL has found that trucks could face six-day queues to board ferries at Dover if they are delayed by just 70 seconds per vehicle.

Separately, Downing Street confirmed yesterday that Theresa May would chair a new cabinet committee to oversee No Deal Brexit preparations. The Committee would include members of the National Security Council, to advise on civil contingency planning; its role would also include engaging with the EU on No Deal preparation. Meanwhile, The Sun reports that cabinet ministers will today receive guidance from The Treasury on how to access emergency No Deal funds.

Source: BBC Financial Times I Bloomberg Sun Financial Times II

The Telegraph: UK officials discussing Article 50 extension with EU counterparts

The Telegraph reports that UK officials have been floating the possibility of an extension of the Article 50 period in discussions with their EU counterparts. Three separate EU sources have confirmed to the Telegraph that UK officials have been “putting out feelers” and “testing the waters” on a possible extension. “Until now, this didn’t come up, but we’re hearing it more and more,” said one diplomatic source, adding, “We presume this is based on some conversations in Westminster, even though we are clear the Government is formally dead against it.”

This comes after Margot James, the Minister for Digital, told the BBC yesterday that there was a risk the UK “might have to extend Article 50” if it proved impossible to get the Brexit deal through Parliament. Responding to James’ comments, a Government spokesman said, “The PM has always said we will be leaving the EU on March 29th this year and we won’t be extending Article 50.”

Meanwhile, The Times reports that some Cabinet Ministers are urging the Prime Minister to “play hardball” with the EU. They believe MPs should be given the chance to support the Withdrawal Agreement, subject to the condition that Parliament would hold a later vote before the UK entered the backstop. The Prime Minister would then be able to confront the EU with a choice between accepting the amended conditions or allowing the UK to crash out without a deal, said a Cabinet source.

Source: Telegraph Times

Labour frontbench to support anti-No Deal amendment to Finance Bill

The Guardian reports that the Labour frontbench will support an amendment to the finance bill that could restrict the Government’s taxation powers if it fails to rule out a No Deal Brexit. The amendment, which has been selected and will be voted on today, is part of an attempt by a cross-party group of MPs to demonstrate their opposition to a No Deal outcome. Labour backbencher Yvette Cooper, who tabled the amendment, said, “The risks to our economy and security from No Deal are far too high and it would be irresponsible to allow it to happen… Parliament needs to make sure there are opportunities to stop the country reaching the cliff edge by accident. This amendment helps to do just that.”

However, a Treasury source quoted in the Mail said, “We are pretty relaxed about [the amendment]. It would stop us doing some little things to make the tax system work better, but it would be a minor thing compared to the overall consequences of leaving without a deal.”

Source: Guardian Politico London Playbook

£800bn assets relocated to Europe by UK finance sector

Since the Brexit referendum, financial services companies have relocated nearly £800bn in assets to the EU27, according to a report by consultancy EY found. The figure, which includes staff, operations, and funds, was calculated based on public announcements of the 222 largest UK financial services companies. EY described the estimates as “conservative.” A spokesperson for the company said, “This number is still modest given total assets of the UK banking sector alone is estimated to be almost £8tn but may become larger as we move towards Brexit.”

Elsewhere, the European Council yesterday agreed that foreign investment firms seeking to operate in the Eurozone would be obliged to set up Eurozone branches in order to continue offering a full range of financial services. This would apply to UK-based financial firms after Brexit. The Council states that its text “further strengthens the equivalence regime…that would apply to third country investment firms. It sets out in greater detail some of the requirements for giving them access to the single market and grants additional powers to the [European] Commission.” The decision needs the approval of the European Parliament in order to become law.

Source: Reuters European Council Financial Times

SNP prepares to bring forward plans for second Scottish Independence referendum

The First Minister of Scotland and leader of the Scottish National Party (SNP), Nicola Sturgeon, said yesterday that she would announce her preferred timetable for second referendum on Scottish independence “when we get to the end of this phase of the Brexit process.” Speaking on BBC Radio Scotland, Sturgeon said that “Of course there is a mandate to have an independence referendum within this term of the Holyrood parliament,” adding that the Scottish Government had “every right to fulfil that mandate.” Sturgeon said that the case for independence was “materially strengthened” since 2014 “because of all of the experience of Scotland in the last two years.” It comes as the Prime Minister’s spokesman said that “Now is not the time” for a referendum, adding “what the different parties should be doing is working together in the best interests of the UK rather than sowing the politics of division.”

Source: Telegraph Politics Home

New poll suggests only 18% of voters support the Brexit deal

According to a new survey by polling company OBR, published yesterday, only 18% of the 2,000 UK voters surveyed support the Government’s Brexit deal, while 59% are opposed. The number indicates an all-time low in support for the deal.

Elsewhere, former Conservative party chairman and European Commissioner Chris Patten said yesterday, “It may be that we can only end this divisive and impoverishing argument by holding another referendum.”

Separately, The Times reports that the chief executive of business organisation London First, Jasmine Whitbread, is calling for the Government to “stop the clock” on Brexit, and argued that “if this is not possible, it does need to go back to the people.” She added, “We’ve got to avoid crashing out at all costs…No Deal should be off the table.” London First, whose board includes the bosses of Starbucks, Capita, Virgin Group, Deloitte and Legal & General, had previously come out in favour of the Government’s deal.

Source: Reuters Guardian Times

German Government confirms it will protect UK citizens’ rights in event of No Deal

The German Ministry of the Interior confirmed yesterday that British citizens living in Germany would still have their rights to live and work in Germany after the planned Brexit transition period or in case of a No Deal Brexit, although they would need to register to acquire a formal right to remain. Meanwhile, a German transport ministry spokeswoman said Germany was in close contact with the UK about avoiding disruption to air transport links in the event of a disorderly Brexit.

Source: Euronews

Nine EU countries agree to welcome refugees rescued off Malta coast

At an EU ambassadors meeting yesterday, nine EU member states pledged to take in refugees stranded on two NGO ships awaiting to disembark in Malta after having been rescued in the Mediterranean, Politico Brussels Playbook reports. Maltese government sources are quoted in the Times of Malta as saying that disembarkation will be allowed once other EU governments agree to host refugees.

Elsewhere, Latvian President Raimonds Vējonis yesterday nominated as Prime Minister Krišjānis Kariņš, an MEP from the European People’s Party (EPP) group, in a third attempt to form a government in Latvia after the October parliamentary election.

Separately, Italian Deputy Prime Minister and leader of the Five Star Movement, Luigi Di Maio, yesterday encouraged the recent Yellow Vests protests in France to continue, adding, “In France, as in Italy, politics has become deaf to the needs of citizens who have been kept out of the most important decisions affecting the people.”

Source: Politico Brussels Playbook Times of Malta Bloomberg Politico

Henry Newman: An end to free movement and forced payments to Brussels. Is the backstop really so bad?

In his column for ConservativeHome, Open Europe’s Director Henry Newman writes that the Brexit deal is “not perfect… But it is a reasonable deal that takes us right out of the EU and the Single Market. And yet it seems that some Eurosceptic MPs just don’t want to take yes for an answer.” Noting that the UK would be able to end both free movement of people and compulsory financial contributions to the EU in the backstop, Newman argues that “The backstop would wind the clock back, taking us towards the trading bloc model of the early 1980s.” He further adds, “The Government has made plenty of errors while negotiating Brexit… But it’s also true that critics of this deal are often confused about the details and unrealistic about the alternatives.” Newman concludes, “At this point there are only three real options: first, stopping Brexit, probably with a divisive second referendum which could tear our country apart. Second, pushing the UK out the EU with No Deal, which Parliament would surely try to block. We would be fine in the medium-term but the immediate disruption would be profound. Or third… Back the only deal on the table… And then on 30th March 2019 we can put Groundhog Day arguments about whether we should or shouldn’t leave behind us, and concentrate on what we do with our newfound freedoms.”

Separately, discussing the forthcoming European Parliament elections on Polish Radio, Open Europe’s Pieter Cleppe said, “the possible increase in support for Eurosceptics will not necessarily translate into greater impact on EU policy, because of [their] internal divisions on economic policy and EU spending.”