Top 3 Developments
Brexit really does mean Brexit Theresa May reiterated this week that there will be no attempts to stay in the EU ‘by the back door’, and made a commitment to controlling EU immigration. Whilst this move may signal the end of Britain’s full access to the Single Market, May has indicated she will be looking for a unique deal with Europe that could involve more limited access in return for immigration controls.
‘The EU will continue’ German, French, and Italian leaders held a summit in Ventotene for further talks on the way forward for the European Union following Britain’s vote to leave. The leaders expressed their optimism for the future, and stressed that Brexit would not spell the end of the EU.
Smith says no to Brexit As the Labour Leadership contest continues, Brexit has become a key point of difference between the two candidates. Whilst overwhelming favourite Jeremy Corbyn has promised to work with the result of the referendum, his challenger Owen Smith has pledged that he would attempt to stop the triggering of Article 50 until there had been a second referendum or general election.
May’s Brexit battles
With the calm of summer recess almost at a close, May has now returned from her break and turned to the matter at hand – Brexit.
May called a Cabinet meeting at Chequers to discuss exactly what Brexit means and what they want for Britain. The outcome of which resulted in the Government reaffirming the fact that there would be no second EU referendum, no general election before 2020 and the House of Commons would not be called on to vote on whether Article 50 should be triggered that will be decided by the Cabinet, and ultimately Theresa May. The all-day meeting did see further details thrashed out, including an agreement that Britain will look to restrict immigration in any EU negotiations. This could signal an end to Britain’s full access to the single market, as there is no precedent of having one without the other.
May continues to be keen to show that she has the EU negotiations in hand and a solid plan in place, one that pleases the ‘vote leave’ camp, but doesn’t leave those that voted remain out in the cold. This task has been made increasingly difficult as she tries to balance her Cabinet colleagues, Boris Johnson, Liam Fox, and David Davis.
Unsurprisingly, the agenda at the Conservative Party Conference focuses squarely on Brexit, with May opening the Conference on Sunday 2nd October with an address titled ‘Global Britain: Making a Success of Brexit’ – a clear call to all that Britain is still open for business. Following her will be David Davis MP, Secretary of State for Exiting the European Union.
Labour leadership candidates clash over Brexit
With the Labour Party involved in a leadership contest just a year after Jeremy Corbyn defeated four rivals to become Labour Party leader, Brexit has become a key battleground for the two candidates.
Notably, leadership challenger Owen Smith has declared that, if elected, he would attempt to stop the Prime Minister from triggering Article 50 unless she promised a further referendum on the UK’s Brexit deal or a general election to approve the final negotiated settlement. This marks a significant point of difference between the two candidates as Jeremy Corbyn has promised to ‘work with’ the result of the referendum.
Whether Smith and the Labour Party will have the ability to vote on the triggering of Article 50 remains to be seen. The Government has stated that there is no requirement to hold a Parliamentary vote before beginning the formal withdrawal negotiation process. However, a legal challenge has been launched by opponents of Brexit on this point.
Corbyn remains the strong favourite to win the leadership election, with a YouGov poll this week putting Corbyn 24 points ahead of Smith.
Whitehall priorities take shape
After rumours of rumblings between the Foreign Office, International Trade Department and Brexit Department with Foreign Secretary Boris Johnson stopping a land-grab of Foreign Office staff to those other departments, the departmental priorities are taking shape.
Cabinet discussions turned towards a need for Britain to discover its Victorian spirit and trade its way to success with Liam Fox, the International Trade Secretary set to outline a trade strategy later this year. Meanwhile, with the Autumn Statement on the horizon, the Chancellor has reiterated that Britain still has to ‘live within its means’ and must also address Britain’s continuing productivity puzzle.
Government departments are at distinctly different stages in outlining their own ‘red lines’ for Brexit negotiations, however, departments have begun the process of taking evidence from trade bodies and notable businesses relevant to their sector. Led by David Davis MP, the Brexit department is responsible for developing a green paper outlining the possible approaches to Brexit negotiations – however the target for it to be published before the Conservative Party Conference at the beginning of next month has slipped and the document is unlikely to be published until later in the autumn.
Scotland have also appointed their own Brexit Minister, Michael Russell, who now has responsibility for Brexit negotiations with the UK Government, however, crucially this position wields no actual authority in negotiations with the EU.
Germany’s Angela Merkel, France’s Francois Hollande, and Italy’s Matteo Renzi made a show of unity last Monday at a summit to discuss the aftermath of Britain’s decision to leave the European Union. The three leaders were insistent that the EU would continue after Brexit, and spoke largely of collaboration, with calls for closer security cooperation and better opportunities for young people. The German, French, and Polish foreign ministries then underlined this promise by vowing to increase ties between their countries following Brexit to secure a safer and more effective union.
This summit came ahead of the meeting between the 27 remaining Member States due to take place on September 16th, in which the EU States will decide how they will move forward with negotiations. Whilst there has been no indication what the outcome of this meeting will be, European Commission Vice President Frans Timmermans took a tough line this week, commenting that British politicians need to get ‘get their act together’ on their Brexit demands.
Whilst in both the German and French media there have been rumours that the UK may not go ahead with Brexit, Theresa May made it clear this week she planned to trigger article 50 in early 2017. She also promised to do a deal which delivers on both immigration and trade, however, comments from Germany’s Vice Chancellor Sigmar Gabriel this week seem to suggest that this deal will be difficult to achieve. The Vice Chancellor commented that Britain should not expect to keep solely the ‘nice things’ in a post-Brexit world, as Europe could ‘go down the drain’ if the UK gets an easy ride after the vote.
Following a poor period for the pound in the wake of Brexit, Sterling has risen to its highest level in four weeks, as UK manufacturing output unexpectedly expanded in August. Manufacturers said the 10% fall in the pound against the dollar and the euro was by far the biggest factor in the upturn in export demand.
This is the latest indication that the nation’s fortunes outside the European Union may not be as dire as some economists predicted, at least in the short term, with house prices also growing this month. House prices increased in August by 0.6% compared to the previous month despite evidence that the housing market has slowed recently, due to the referendum and stamp duty increases on buy-to-let and second properties. However, economists have pointed out that it is still early days and the true ramifications of Brexit remain to be seen.
- September 16 – Meeting of European Council of the remaining 27 Members States
- September 24– Result of Labour leadership contest announced
- September 24 – 28 – Labour Party Conference
- October 2 – 5 – Conservative Party Conference