4 July 2017

UK will “continue to work closely” with the European Medicines Agency post-Brexit

In a letter to the Financial Times, Health Secretary Jeremy Hunt and Business Secretary Greg Clark write, “The UK would like to find a way to continue to collaborate with the EU, in the interests of public health and safety,” adding, “Drug development is a global business – and we will look to continue to work closely with the European Medicines Agency [EMA], and our international partners.” However, they say, “Should we not achieve our desired relationship with the EU, we will set up a regulatory system that protects the best interests of patients and supports the UK life science industry.” The EU expects the EMA to relocate from London following Brexit.

Source: Financial Times

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Banks could face €15bn in restructuring costs post-Brexit

A new report has found that UK banks could face up to €15 billion in costs to relocate activities to other EU countries post-Brexit, which may be necessary to continue servicing customers there. The research found the cost of creating subsidiaries in other EU countries is likely to put a “material strain” on earnings for these banks. Securities and derivatives trading operations are considered most at risk of disruption following the UK’s withdrawal.

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EU report calls for “full and continued engagement” with the UK post-Brexit on research and innovation

According to a report backed by the European Commission, there should be “full and continued engagement with the UK within the post-2020 EU Research and Innovation programme” after Brexit, as it “remains an obvious win-win for the UK and the EU. The UK has one of the strongest science bases of all European countries.” Pascal Lamy, former director-general of the World Trade Organisation and chair of the group that produced the report, said it would be “stupidity” for the UK to leave the European Research Area, or for the EU to separate the UK from it. The report adds that countries such as Canada and Australia should also be able to join the EU’s R&I programme.

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Macron: Brexit was a symptom of a failure

Addressing parliamentarians at the Palace of Versailles French President Emmanuel Macron said the Brexit vote was a “symptom” of a “failure… that we must have the courage to face head-on.” He argued, “We have never needed Europe more,” but insisted the EU must be revived by a “new generation of leaders.” He continued, “The last 10 years have been cruel for Europe. We have managed crises but we have lost our way. I believe firmly in Europe. But I don’t find the scepticism unjustified,” adding, “The building of Europe has been weakened by the spread of bureaucracy and by the growing scepticism that comes from that.”

Macron vowed there would be a “profound transformation” of France, stressing that he would cut the number of MPs by a third and would this autumn lift France’s state of emergency which has been in place since November 2015.

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Corbyn unveils new frontbench team

Labour leader Jeremy Corbyn yesterday reshuffled his frontbench inviting back six MPs who had previously resigned from his shadow ministerial team. Among those MPs are Gloria de Piero, who will be the shadow justice minister and Melanie Onn, as shadow housing minister. Both quit over Corbyn’s leadership after last year’s EU referendum. In a statement, Corbyn said, “These appointments are further evidence that Labour is not just the opposition – we are the government in waiting.”

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Ministers call for scrapping tax cuts to fund public sector pay

Ministers are urging Chancellor Philip Hammond to consider scrapping or delaying planned tax cuts in order to fund an increase in public sector pay, according to The Times. The government is currently committed to reducing corporation tax and raising the threshold for the personal allowance and the 40 per cent income tax rate. Hammond has ruled out using borrowing to fund increases to state pay, insisting that the UK must stick to its fiscal targets. The suggestion comes as the government has come under increasing pressure to end the 1 per cent cap on public sector pay increases.

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Brexit talks could be extended if no deal is agreed within two-year timeline says influential European People’s Party

A spokesman for the European Parliament’s centre-right European People’s Party (EPP) has said that Brexit negotiators should not rule out a scenario in which “negotiations are ongoing but we don’t manage to conclude them because of the complexity of the issues.” Romanian MEP Siegfried Mureșan argued that, in such a circumstance, “The negotiations will eventually need to be prolonged.”Mureșan said that prolongation was “possible for one year with the unanimity of the 27 member states,” adding, “Unanimity is always difficult to be reached in the Council but given the importance of the matter and the negative consequences we might need to work on it.” While he called for “a clear exit of the UK from the EU” before European Parliament elections in 2019, he said that negotiators should be ready for all eventualities, as, in his view, “The worst case scenario is the no deal scenario. It’s bad for the EU too but it’s primarily a disaster for the UK.”

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Pound falls after weak manufacturing figures

Sterling fell below $1.30 yesterday after weak manufacturing data raised doubts about whether the Bank of England will raise interest rates this year. The purchasing managers index (PMI) showed export orders rose at the slowest rate for five months, with the index of factory activity at 54.3, down from an estimate of 56.3 in May. The data suggests that the manufacturing sector is failing to capitalise on the weakened pound making exports more competitive. Sterling reacted by falling by half a percent, having last week hit a six-week high on suggestions of a Bank of England interest rate increase this year.

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New report suggests Ireland should “seriously consider” exiting the EU after Brexit

A new Policy Exchange report written by former Irish diplomat Ray Hussey suggests that Ireland should give “serious consideration” to withdrawing from the EU in light of Brexit, arguing, “The chances of obtaining a satisfactory outcome to the present Brexit negotiations for Ireland are faint.” Hussey suggests that outside the EU, Ireland could opt “to remain with the United Kingdom in a customs and free trade area, while negotiating as favourable as possible trade and investment terms with the remaining 26 member states.” However, former Taoiseach Enda Kenny previously declared that Irish membership of the EU remains “profoundly in our national interest.” A recent opinion poll has also found that 88% of the Irish public support staying in the EU.

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Poll: 48% back giving EU citizens the right to vote post-Brexit

According to an Opinium survey, commissioned by Professor Michael Bruter and Dr Sarah Harrison of the London School of Economics’ electoral psychology initiative, 48% of Brits surveyed support extending voting rights to the 3 million EU citizens in the UK after Brexit to include the right to vote in general elections, while 25% support the status quo of voting only in local elections and 10% support the option of removing all their voting rights.

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Weapons destined for UK seized in France in joint forces operation

On Saturday, UK Border Force seized 79 pistols hidden in a car at the entrance to the Channel Tunnel in France. The operation was conducted in cooperation with the Met’s Organised Crime Command, whose Detective Chief Superintendent Michael Gallagher said, “This joint operation highlights how we can work effectively with other agencies to combat serious and organised crime.” Seven Polish nationals were arrested at the scene, with six eventually released without charge. The remaining man is due to appear in court today alongside a man of Czech origin now living in the UK, charged with conspiracy to possess firearms.

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Stephen Booth: A transitional deal is a small price to pay for a successful Brexit

In a piece for CapX, Open Europe’s Stephen Booth writes, “It has always been clear that Brexit cannot be brought about by the flick of a switch at midnight on 29 March 2019. It is a process, not an event. The Prime Minister recognised this in her Lancaster House Speech in January. She was clear that she wanted to avoid an “unlimited transitional status, in which we find ourselves stuck forever in some kind of permanent political purgatory.” But she recognised that there would need to be a period of “implementation” or “phasing” to allow businesses and governments to prepare for new arrangements on issues such as immigration control, customs systems, criminal justice cooperation and financial services regulation.” He calls for the UK to leave the Customs Union by 2021 at the latest, saying, “Phasing out Customs Union membership would be mirrored by the phasing in of a zero-for-zero tariff deal on goods trade, which would form the foundation of an eventual new UK-EU trade agreement.” He suggests that “The UK may need to remain in the Single Market a little longer, until a deep and comprehensive deal with the EU, covering services, can be concluded and ratified,” but concludes, “The UK needs to avoid transition becoming a permanent limbo. This is why leaving the Customs Union as soon as possible is so important. It would increase the UK’s leverage and signal Brexit is well underway. A sunset clause on Single Market membership could also be introduced. Politically, the recent election creates more time for transition but the Government will want to have the long-term deal in place by the next General Election. Clearly, this timetable is not as swift an exit as many would like. But it would be small price to pay for the right deal in the end.”

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