3 October 2018

UK Government considering regulatory border in Irish Sea, but DUP opposed

The Government is considering offering the EU a new ‘backstop’ proposal for the Irish border, including an acceptance of regulatory checks between Northern Ireland and the rest of the UK, according to Brexit Secretary Dominic Raab. Speaking yesterday at a fringe event at the Conservative Party conference, Raab said, “We would need to retain a UK-wide customs backstop and on the regulatory side of things, we have been clear that we will, as long as we can carry the communities of Northern Ireland with us, we will be open to looking at some of the options on regulatory checks,” he said. Speaking later to Open Europe Director Henry Newman, Raab further said that any Northern Ireland-specific solutions would have to satisfy two conditions, in that they should be “respectful of the existing devolution settlement” and “carry the consent of the communities in Northern Ireland.” Asked if the UK Government would put up a hard border in the event of no deal, Raab replied, “No.”

Meanwhile, Arlene Foster, the leader of the Democratic Unionist Party (DUP), on which the Conservatives rely upon for their parliamentary majority, has already signalled her party’s opposition to such a compromise. Also speaking at the Conservative Party conference, Foster told Bloomberg yesterday that the DUP would not back “either a customs border down the Irish Sea or a regulatory border,” and urged Theresa May to stand by her “unionist” principles.

Source: Reuters BBC Politico European Commission

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Brexit deal possible "in time for Christmas," says Raab at Open Europe event

The Brexit Secretary, Dominic Raab, has said he is optimistic that the Government will have agreed a deal with the EU “in time for Christmas.” Speaking to Open Europe Director Henry Newman at yesterday’s fringe event at the Conservative Party Conference, Raab said that he wanted to “set out the positives” about Brexit, adding that “we might have a seven-and-a-half or eight out of ten Brexit…a lot of people want to get our nose over the line, to get a good deal.” He said that he believed that once negotiations got “beyond the divorce stage…the mood of the country will lift.”

Questioned about the Chequers proposals, Raab told Newman that “there is no such thing as pure independence” but that it was possible to have “democratic control over our laws” as well as an international outlook.

Asked about the Government’s preparedness for a ‘no deal’ Brexit, Raab acknowledged “there are risks, but most are manageable.” He also said that if the EU were to take a “totally obstructive approach…I am just not sure that member states would wear it…we are already engaged bilaterally.”

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Henry Newman: What May will and should say in her conference speech today

In his column for Conservative Home, Open Europe director Henry Newman calls on Prime Minister Theresa May in her conference speech today to “avoid the temptation to get into a slagging match with the EU”, and also to “avoid escalating the tensions within the Conservative Party.” She should also, he writes, “Try to empathise with those who have concerns about her policy… show flexibility and soften her uncompromising stance… She doesn’t need to retreat from Chequers but she can say that she is not wedded to the dot on every ‘i’ and the cross on every ’t’ of the plan.”

Looking ahead at the upcoming weeks, Newman concludes, “With no breakthrough in sight, and passions running high on both sides, we can expect things to go right to the wire… While No Deal seems a growing and real possibility, the most likely outcome is still that some form of agreement is reached. Whatever happens, expect the next few weeks and months to be full of Brexit bumps and turns.”

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Bloomberg: diplomats in Brussels expect progress on Brexit withdrawal agreement next week

Diplomats in Brussels have told Bloomberg that they expect the broad strokes of the Brexit withdrawal agreement to emerge by the middle of next week.This comes as EU officials prepare the bloc’s draft political declaration for the future UK-EU relationship, which they are considering publishing on 10 October.

Elsewhere, the President of the European Commission, Jean-Claude Juncker, said yesterday that the EU’s approach to the issue of the Irish border in the Brexit negotiations is “Ireland first.” Addressing the European Parliament, Juncker also said, “We want to have a deal. Those who think a no-deal [Brexit] would be a better solution are not aware of the difficulties such a scenario would imply.”

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Varadkar: Good Friday Agreement non-negotiable

The Irish Taoiseach, Leo Varadkar, said yesterday that the Good Friday Agreement (GFA) is “not up for negotiation in these talks over Brexit.” Speaking in the Irish parliament on Tuesday, Varadkar said, “The government stands by the GFA and we will defend its primacy… It [the GFA] is not a piece of British legislation; it is an international agreement between the British and Irish governments, as well as a multi-party agreement among the various parties. While it may be factually correct to say that the Good Friday Agreement, just like any international treaty, could be changed, it can only be changed with the agreement of British and Irish governments and can only be changed with the consent of the people of Northern Ireland and indeed across cross-community consent. It is not something that can be changed by any one political party or by any one government.” This comes after Democratic Unionist Party (DUP) leader Arlene Foster said Monday that it was “deeply frustrating” to hear people “talk about Northern Ireland as though we can’t touch the Belfast Agreement.”

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Theresa May: "We would go onto the basis of WTO tariffs" in the event of No Deal

In an interview with Sky News yesterday, Theresa May said that in a No Deal Brexit, “We would go onto the basis of WTO tariffs and so those WTO tariffs would kick in.” Warning that a ‘no deal’ scenario would cause “short-term disruption,” she added that her government is working to “put in place the measures to ensure that we can makes as much success of leaving… regardless of the deal we get”.

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Boris Johnson: Government’s Chequers plan would be “forfeiting control” to the EU

The former Foreign Secretary Boris Johnson, in a speech at the Conservative Party conference yesterday, said the Government’s Chequers plan for Brexit would lead to the UK “forfeiting control” to the EU rather than “taking back control.” He also urged Cabinet ministers that the best way to “back Theresa May” would be to persuade her to revert to her “original plan” outlined at Lancaster House. Responding, Theresa May told the BBC the speech had made her “cross”, saying that Johnson “wanted to tear up our guarantee to the people of Northern Ireland.”

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Warning from European carmakers over consequences of a 'no deal' Brexit

European carmakers at the Paris Motor Show have been warning that a ‘no deal’ Brexit would lead to serious consequences for both European car companies and UK manufacturers. Concerns were expressed that the imposition of customs checks and import duties would threaten the “just-in-time” supply chains of car manufacturers. The CEO of BMW AG, Harald Krueger, said that his company “would be forced to build in the Netherlands,” hence shifting production away from the UK, in a ‘no deal’ scenario.

Elsewhere, Bloomberg reports that a growing number of Japanese companies is shifting operations from the UK into the EU27 over fears of a ‘no deal’ Brexit. A minister for the Japanese embassy in London said, “A lot of Japanese companies, manufacturing companies in particular, have invested in this country as a gateway to Europe… A no-deal Brexit in March next year will be nothing short of a cliff edge [for the businesses].”

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French customs in Calais preparing for "worst case" Brexit scenario, says minister

French Minister of Public Action and Accounts Gérald Darmanin yesterday held a meeting in the Pas-de-Calais region in order to consult local actors on the consequences of a ‘no deal’ Brexit for the North of France. Ahead of the meeting, Darmanin said in an interview with newspaper Les Échos said that in a “hard Brexit scenario, goods from the UK could have to undergo up to four customs formalities, instead of one today. This represents two minutes of stand-still per truck,” adding that he was preparing customs “for the worst case scenario so that they are ready to absorb the additional checks overnight.” He added that the Calais region is particularly likely to have difficulties in terms of logistics and congestion as the traffic mostly comes from the UK, and that in addition to hiring new customs officers, officials are looking into options for a new space to carry out customs checks in the port of Calais.

Separately, the French Minister for European Affairs, Nathalie Loiseau, has said that “no deal would be better than a bad deal…a good deal is still possible, but time is running out.”

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UK must ensure it remains competitive after Brexit, British Chambers of Commerce warns

The director-general of the British Chambers of Commerce, Adam Marshall, yesterday warned about the economic future of the UK, “The biggest risk to the future of the United Kingdom is that we stagger exhausted over the Brexit finish line, but we haven’t put in place the steps to ensure that we’re competitive here at home.” He called on Chancellor Philip Hammond “to help those companies who are wavering here at home, or those companies overseas who are considering their position, to crowd all of them in and get them to commit to those investments in the United Kingdom.’’ This comes as the director-general of the Confederation of British Industry, Carolyn Fairbairn, yesterday said that the costs of Brexit on businesses ran into the several billions, adding that uncertainty was holding back investment.

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Italy resists pressure from EU on budget deficit

The Italian government is resisting EU pressure to water down its plans for a deficit target of 2.4 percent of GDP over the next three years. Luigi Di Maio, Deputy Prime Minister and leader of the 5-Star Movement, said yesterday, “We are not turning back from the 2.4 percent target… We will not backtrack by a millimetre.” Di Maio also accused the French and German governments of wanting the Italian government to fall. Meanwhile, Matteo Salvini, the other Deputy Prime Minister and leader of the right-wing Lega party, said that the “threats” of EU bureaucrats were to blame for Italy’s rising borrowing costs. This comes as Eurozone finance ministers meeting in Luxembourg yesterday called on Italy to obey EU fiscal rules.

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Open Europe event: After Salzburg - what next?

At the Salzburg Summit European Council President Donald Tusk said that economic aspects of the UK Government’s Chequers plan will “not work.” What are the options for the future Brexit negotiations? Join us on Tuesday, October 9 from 12:30 to 14:00 in the Boothroyd Room of the House of Commons to discuss what’s next after Salzburg, with:

  • Nick Boles, Conservative MP for Grantham and Stamford and promoter of the “Norway then Canada” Better Brexit plan
  • Gisela Stuart, former Labour MP for Birmingham Edgbaston, and former co-Chair of Vote Leave’s Campaign Committee
  • Henry Newman, Director of Open Europe

Tickets are available on Eventbrite. Places are limited and will be allocated on a first-come, first-served basis.