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Three pro-EU Conservative MPs, Anna Soubry, Heidi Allen and Sarah Wollaston, yesterday defected to The Independent Group, which was established by former Labour MPs on Monday. In a joint statement the three MPs said, “We no longer feel we can remain in the party of a government whose policies and priorities are so firmly in the grip of the European Research Group [ERG] and Democratic Unionist party [DUP],” adding, “Brexit has re-defined the Conservative party — undoing all the efforts to modernise it. There has been a dismal failure to stand up to the hard-line ERG which operates openly as a party within a party, with its own leader, whip and policy.” Heidi Allen said a “significant number” of her former Conservative colleagues are prepared to join the group. Soubry, Allen and Wollaston are all supporters of a second referendum. The Independent Group now has 11 MPs.
Prime Minister Theresa May said she was “saddened by this decision, adding, these are people who have given dedicated service to our party over many years, and I thank them for it,” she also said, “Of course, the UK’s membership of the EU has been a source of disagreement both in our party and our country for a long time. Ending that membership after four decades was never going to be easy… I am determined that under my leadership the Conservative Party will always offer the decent, moderate and patriotic politics that the people of this country deserve.”
Elsewhere, The Liberal Democrat leader Sir Vince Cable said his party “holds out the hand of friendship” to The Independent Group, stating that they already have “a good working relationship” with its members.
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In a joint statement, Prime Minister Theresa May and European Commission President Jean-Claude Juncker said their “constructive” discussions held yesterday covered “which guarantees could be given with regard to the backstop that underline once again its temporary nature and give the appropriate legal assurance to both sides,” particularly with regards to changing the Political Declaration on future UK-EU relations. They also said that “the Prime Minister acknowledged the EU’s position and notably the letter sent by [European Council] President Tusk and President Juncker on 14 January,” which stated that the Withdrawal Agreement is not renegotiable.
Separately, the Daily Telegraph reports that Attorney General Geoffrey Cox is planning a mechanism for the UK to be able to leave the backstop unilaterally with a twelve month notice. Cox will be in Brussels today to hold talks with EU chief Brexit negotiator Michel Barnier.
Meanwhile, Chancellor Philip Hammond this morning said that May and Juncker were discussing about how to make the Irish backstop a “temporary arrangement,” adding, “That is a word that hasn’t been used before and I think that is significant…Both sides have acknowledged that the political declaration could be expanded, for example, to address concerns that have been expressed in some parts of the House of Commons about workers’ rights.” Hammond also said, “There may be an opportunity to bring a [meaningful] vote back to the House of Commons – there may be an opportunity, but that will depend on the progress that is made in the next few days.”
Elsewhere, Labour leader Jeremy Corbyn, along with several Shadow Cabinet ministers, will be holding talks with Michel Barnier, Commission Secretary General Martin Selmayr and the European Parliament’s Brexit Coordinator Guy Verhofstadt. Ahead of the visit Corbyn said, “Labour respects the result of the referendum, but we do not support the Prime Minister’s damaging approach which is focused more on appeasing factions of her party than finding a sensible solution that works for the whole country.”
The Daily Telegraph
The Foreign Secretary, Jeremy Hunt said yesterday that “there is an end in sight” for getting a parliamentary majority behind Theresa May’s deal, based on Brexiteers on the Conservative backbenches agreeing to a compromise on the Northern Ireland backstop. This would need to be “definitely more than a clarification” but not a rewriting of the Withdrawal Agreement. He insisted that the UK Government can find a “way through” the Brexit impasse to secure an exit deal that will prove satisfactory to MPs. In a speech in Berlin, Hunt said that the Government was hoping for concessions from the EU on the backstop which would reassure MPs that the UK would not remain in it indefinitely. He warned that a No Deal Brexit would be “deeply damaging, economically and politically,” and that EU leaders shared a “heavy responsibility” with the UK in seeking to avoid that outcome.
Meanwhile, Spanish Foreign Minister Josep Borrell yesterday told Bloomberg that an agreement on the Brexit deal “is being hammered out now,” adding, “The EU’s position is that the treaty won’t be reopened, but can be interpreted, or complemented with explanations that may be satisfactory.”
The European Medicines Agency (EMA) will have to continue paying rent until 2039 for its London offices, despite leaving in January 2019 ahead of Brexit. This comes after the UK High Court yesterday said that Brexit was not a legally valid reason to break the EMA’s 25 year lease with the Canary Wharf property group.
Elsewhere, the UK’s largest insurer, Lloyds Banking Group, yesterday announced a 24% rise in net profits to a total of £4.4bn and a £4bn dividend for shareholders. Lloyds Chief Executive, António Horta Osório, said, “We are planning for a deal and a smooth Brexit transition that should lead the economy to grow at around the same pace you have now of about 1 -1.5%,” adding, “Of course other scenarios can play out … It is true that we face the future with confidence, otherwise we would not be ramping up our investment in this business.”
Separately, the insurer Aviva announced it will transfer £9bn worth of assets to Ireland in preparation for a No Deal Brexit, citing the loss of financial passporting rights.
A group of Dutch MPs warned yesterday that the EU should “prepare for the worst” Brexit scenario after they visited the UK parliament and were “alarmed” about the lack of clarity from MPs as to what deal could get a majority in parliament. Dutch MP Lodewijk Asscher, said, “Different factions seem to gamble on the folding of adversaries in a last-minute scenario, be it the European Commission, other factions in their political party, or Dublin,” addings, “Other countries should prepare for the worst: the UK stumbling into a Brexit by accident,” This comes as the European Commission yesterday described contingency plans for No Deal.
Meanwhile, the Sun reports that four Cabinet ministers have warned May that she must extend Article 50 if they are to continue supporting her. The four insist that if May refuses, 20 members of the Government would support the Bill proposed by Labour MP Yvette Cooper, which would bind the Government to requesting an extension to Article 50 in the event that no Brexit deal is agreed. President of the European Council, Donald Tusk, said yesterday, “Of course, if Britain fails to prepare some sensible option on time, then there is always a possibility to extend these negotiations in time. This would be better than a divorce without agreement.”
The European Parliament has again objected to the description of Gibraltar as a “colony of the British Crown” in legislation which puts the UK on a visa-exemption list in the event of a No Deal Brexit. The description of Gibraltar in this way is a Spanish demand which is supported by the European Council but has now been rejected by the European Parliament for the third time. The Czech MEP Petr Ježek told the Guardian that Spain was “playing with fire” by insisting on the language, adding “If there is no agreement, and no visa exemption for the UK, the British government may adopt a similar approach – and that would be a disaster.” Unless the dispute is resolved and the legislation is passed, British citizens would have to pay £52 for a visa in order to travel to the Schengen area in the event of No Deal.
Three bodies representing retailers in the UK and Ireland – the Northern Ireland Retail Consortium (NIRC), the British Retail Consortium (BRC) and Retail Ireland – have issued a warning that a No Deal Brexit could lead to higher prices and shortages of fresh meat, fruit and vegetables. The BRC said that WTO tariffs would mean a 42% tariff on imported cheddar and 40% on imported beef. William Bain, policy adviser at the BRC said, “Our supply chains are highly integrated, with food ingredients coming from both Ireland and the EU, and 60% of the £2 billion of Northern Ireland agri-food bound for Great Britain crosses the Irish sea via Dublin.” He said, “This will affect the price of shopping in the Prime Minister’s constituency of Maidenhead in the same way as it will in Belfast or Dublin, with cost rises.” Aodhán Connolly of the NIRC said that Northern Ireland would be particularly affected by No Deal, adding, “Our households already have half of the discretionary income of British households and less than those in the Republic of Ireland. A no-deal Brexit will hit us first and hit us hardest.”