20 March 2019

Theresa May will seek short extension to Article 50

Prime Minister Theresa May will write to the European Council President Donald Tusk asking for a Brexit extension until the end of June, but will no longer ask for a long delay. A spokesperson for Number 10 said, “There is a case for giving Parliament a bit more time to agree a way forward, but the people of this country have been waiting nearly three years now,” adding, “They are fed up with Parliament’s failure to take a decision and the PM shares their frustration.” This comes after MPs rejected the Withdrawal Agreement a second time last week while also ruling out leaving the EU without a deal, and voting for an extension of the Brexit process. European Commission President Jean-Claude Juncker commented about the UK’s request for an extension, “I assume that we will not be able to reach a decision this week but that we will have to meet again next week,” adding, “The European Council could meet again next week but patience is wearing thin.” Education Secretary Damian Hinds told BBC Radio 4 this morning, “I don’t see how a long delay gives certainty. Actually we’ve had long time already… People are a bit tired of waiting for Parliament to get our act together and get the deal passed,” adding, “Unless and until a deal is finalised, there remains the prospect of the risk of No Deal.”

A spokesman for May yesterday said that she has an “absolute determination” to make sure the UK “leaves with a deal as soon as possible,” adding, “She has said in the House of Commons she does not want there to be a long delay and that taking part in European election [in May] three years after Britain voted to leave would represent a failure by politicians.”

Elsewhere, the Telegraph reports that there were divisions in the Cabinet yesterday over the length of any Article 50 extension. One source told the paper that Commons Leader Andrea Leadsom accused colleagues of failing to deliver Brexit; another said that Leadsom, along with Transport Secretary Chris Grayling and International Trade Secretary Liam Fox, declared they would prefer a No Deal Brexit to a long delay. Speaking on LBC Radio this morning, Leadsom said it was “absolutely essential” that the UK leaves the EU before the European Parliament elections this May. This comes as Theresa May is due to address Conservative MPs at this afternoon’s weekly meeting of the 1922 Committee.

Meanwhile, Brexit Secretary Stephen Barclay told BBC Radio 4 that ministers are giving the House of Commons Speaker’s decision on holding a third vote “serious consideration,” adding that he is confident they will “find a way” to get another vote on the Withdrawal Deal.

Elsewhere, the former director of legal affairs at Downing Street, Nikki da Costa, told the Today programme, “I think the PM and the Government can still have a third meaningful vote… but it will be extraordinarily difficult to have a fourth meaningful vote, so I think MPs really have to think very carefully if that vote does come back.”

Meanwhile, the DUP’s Westminster leader, Nigel Dodds, said the party continued to have “good discussions” with the Government but there were still “big gaps” in the negotiations. However, HuffPost UK reported yesterday that Government talks with the DUP have stalled, with the party not prepared to back the deal unless they are sure it can pass the House of Commons. A DUP source said, “Just as other parties have been reluctant to switch their votes, you would only expect the DUP would take the same approach.”

Open Europe’s Henry Newman told the Financial Times that Theresa May “has less control of the timetable [of the vote] than she had previously… But if she can command a majority for her deal, she can command a majority to set aside any precedent of the House [of Commons].” He is also quoted by The Atlantic on the issue of mistrust towards the EU in the UK, saying, “There is a group of critics for whom the EU is essentially a hostile actor, and they are almost pathologically determined to see bad motivation behind everything it does.”

Source: BBC I BBC II BBC III Reuters I Reuters II Telegraph I Telegraph II Telegraph III Financial Times I Financial Times II The Atlantic The Times HuffPost

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Germany and France say UK must offer "something new" to extend Article 50

Senior ministers in the German and French Governments have said that the UK must offer “something new” for the EU27 to accept a request to extend Article 50. Germany’s European Affairs minister, Michel Roth, said that EU27 member states were “really exhausted by these negotiations,” adding that he wished to see “clear and precise proposals of the UK Government as to why an extension [to Article 50] is necessary.” French European Affairs minister Nathalie Loiseau said, “We need something new because if it’s an extension to remain in the same deadlock, how do we get out of this? The British have to come with an initiative that is clear and credible and supported by a majority.” Elsewhere, speaking at a conference in Berlin, German Chancellor Angela Merkel stated that she would “fight to the last hour of the deadline on March 29 for an orderly exit.”

An unnamed senior French government official also said, “There is nothing obvious or automatic about an extension,” adding that France demands a credible UK plan and a guarantee that a delay would not endanger the functioning of EU institutions.

This comes as European Council President Donald Tusk met with the Irish Taoiseach, Leo Varadkar, in Dublin yesterday. A Council spokesperson said, “President Tusk expressed the strong and ongoing solidarity with Ireland of the European Council and European leaders. They agreed that we must now see what proposals emerge from London in advance of the European Council meeting in Brussels on Thursday.”

Meanwhile, EU chief Brexit negotiator Michel Barnier yesterday said, “If Theresa May requests an extension before the European Council on Thursday… EU27 leaders will need a concrete plan from the UK in order to be able to make an informed decision,” adding that the leaders will be asking, “Does an extension increase the chances of ratification of Withdrawal Agreement? What would be the purpose and outcome? How can we ensure that, at the end of a possible extension, we are not back in the same situation as today?” He also stated that an extension needed to result in an orderly withdrawal and that a long extension had to be linked to a “new event, or political process” in the UK.

Separately, the European Council yesterday adopted a number of contingency measures in order to mitigate the potential impact of a No Deal Brexit. These include safeguarding the social security rights of UK citizens in the EU and EU citizens in the UK, along with regulations on fishing, transport, and study programmes.

Source: The Independent EU Observer RTE European Council Reuters The Guardian I The Guardian II Financial Times Twitter

Government will implement No Deal planning if extension not agreed by Monday

The Daily Telegraph reports that the Government will implement its worst-case scenario contingency planning for No Deal, known as ‘Operation Yellowhammer’, if an extension is not agreed with the EU by Monday. In a letter to Cabinet ministers, Steve Barclay, the Brexit Secretary, said: “Operation Yellowhammer command and control structures will be enacted fully on 25 March unless a new exit date has been agreed between the UK and the EU.”

Source: Telegraph

Government’s proposed No Deal tariffs would have limited effect on UK economy, says OBR member

A member of the Office for Budget Responsibility, Charlie Bean, yesterday suggested that the government’s proposal to liberalise tariffs in the event of No Deal would have a relatively small effect on the overall UK economy. He said the effect of removing or lowering tariffs under the government’s plan would likely “be completely swamped” by bigger No Deal effects, such as exchange rate changes. OBR officials also warned that the “real world” impact of lowering tariffs would depend on how they are implemented and enforced. OBR chairman Robert Chote noted that businesses have face “quite considering compliance challenges” in applying new rates.

Source: Financial Times

Times: UK and Canada finalising post-Brexit trade agreement 

The UK is expected to sign a post-Brexit free trade agreement with Canada, the Times reports. The paper cites a diplomatic note according to which EU chief Brexit negotiator Michel Barnier told EU ambassadors that the agreement “mostly replicates CETA [the EU-Canada free trade agreement].” It also quotes a UK Government official as saying, “We’re having productive discussions on it and we’re confident [CETA] will be rolled over” after Brexit.

Elsewhere, US President Donald Trump’s National Security Adviser, John Bolton, told Sky News yesterday that the US was “ready to go” with a post-Brexit UK-US trade deal, adding, “[International Trade Secretary] Liam Fox would be welcome here; any member of the Government would be welcome here, we can do these deals quickly.”

Source: The Times Sky News

French Defence Minister urges US to maintain commitment to European security

France’s Minister of the Armed Forces, Florence Parly, yesterday urged the US to maintain its “incredible” commitment to European security and defence. She added, “I believe it would be detrimental to the US if part of Europe was co-opted from the outside,” warning that foreign powers such as China were attempting to “split” Europe. Parly also recognised that European countries had a lot of work to do “if they want to stand on their two feet and really share the burden with America,” but stressed that future European defence projects should “never be seen as a move against the US.”

Source: Financial Times

UK unemployment rate at historical low

Figures from the Office for National Statistics (ONS) showed yesterday that more people are at work in the UK than ever before, despite a slowdown in investment. Employment rose by 220,000 to 32.71 million, the highest since 1971, while, unemployment fell by 35,000 to 1.34 million. Analysts cautioned that these figures were not a reflection of the current situation as they focused on the three months leading to January, whilst surveys have hinted that employment has fallen in subsequent months.

Elsewhere, The Bank of England has warned that firms may opt to hire more workers whilst cutting back on expensive investments in machinery and technology in the face of Brexit uncertainty.

Source: The Guardian Financial Times The Times

Dominic Walsh: Bercow has thrown a spanner in the works. Can the Government work around it?

In a piece for The Article, Open Europe’s Dominic Walsh assesses the impact of the Speaker’s decision to block another vote on the same Brexit deal. He writes, “The ‘Bercow problem’ is a headache for the Government, though it is not insurmountable. There are various procedural options which could circumvent the Speaker’s ruling.” However, Walsh argues that although a third meaningful vote is a realistic prospect, the chances of a fourth vote if a third fails are falling. He adds, “That may mean that [the third vote] becomes a ‘make-or-break’ vote… the Government can no longer hold repeated votes to demonstrate opinion moving gradually towards the deal.” He concludes that regardless of Bercow’s decision, “the fundamental choice which MPs will probably face in the coming weeks remains the same: May’s deal, or a long delay to Brexit.”