29th September

By October 12, 2016Brexit Updates

brexit-update

Top 3 Developments

Machinery of Government not firing on all cylinders: The Government has begun building the machinery for Brexit but doesn’t yet know what do with it, a critical report finds.

Labour of love: Jeremy Corbyn was re-elected as Labour leader and called for the party to unite behind him. Whilst Brexit was not a key focus of their annual conference, the Conservative Party Conference will see three ‘Brexiteers’ (Johnson, Davis & Fox) outline what they want to see.

Europe united in criticism: a number of key players including the Italian Prime Minister and German Finance Minister repeated that it would be difficult for the UK to secure access to the single market and restrictions on the freedom of movement at the same time.

 Government’s Brexit preparations laid bare

An Institute for Government briefing paper assesses the progress the Government has made in planning for Brexit thus far. The critical report found that:

  • the Government needs an extra 500 new personnel, costing up to £65 million a year, for the Department for Exiting the European Union (DExEU) and Department for International Trade;
  • the turf wars and discussions over roles and responsibilities between the likes of Boris Johnson, Liam Fox and David Davis have wasted valuable time and energy. The Prime Minister therefore needs to clarify who does what and stamp out potential battles between these ministers;
  • the Prime Minister needs to clearly articulate the process and timescales for agreeing the UK’s initial negotiating position;
  • the Government needs to undertake a wide-ranging and inclusive engagement exercise given that Brexit will affect every sector of the economy and region of the UK;
  • Whitehall and DExEU must provide Ministers with the best shared analysis of options that the civil service can provide so that they can make an informed decision.

In other news:

  • The Financial Times reveals that the Prime Minister is to set up and chair a new cabinet committee on Brexit which is expected to be at the very heart of decision making.
  • A legal bid requiring the Government to get assent from Parliament before triggering Article 50 secured its first major success ahead of a High Court hearing. A judge has ordered the Government to publish its ‘secret’ legal arguments on why Article 50 can be triggered without parliamentary assent.
  • International Trade Secretary Liam Fox MP defended his previous comments in which he asked whether British businesses had become ‘too lazy and too fat’ and called on more businesses to export.
  • In a candid interview with the New Statesman, former Chancellor Ken Clarke MP said that “nobody in the government has the first idea of what they’re going to do next on the Brexit front”.

Labour Conference update: A labour of love?

This week the Labour Party and Political Intelligence descended on Liverpool for their annual conference. The conference kicked off with Jeremy Corbyn being returned as leader with an increased mandate and following a fraught summer of infighting, the conference was seen as the opportunity to heal the party’s divisions. Whilst Deputy Leader Tom Watson pushed the unity message, the factions within the party were still evident. London Mayor Sadiq Khan called for Labour to return to power, but failed to once mention Corbyn’s name. There were also reforms to internal rules, giving the Welsh and Scottish parties voting rights on the National Executive Committee (NEC), a move which was seen to tip the balance of the NEC away from Corbyn, and was met with loud protests from his supporters on the conference floor.

Surprisingly, Brexit was not on the formal agenda as one of the conference topics. Whilst Brexit was obviously part of the conversation, fringe events focused more heavily on how Labour could return to power, rather than the triggering of Article 50. The conference did back a motion that could potentially open the door to the party supporting a second EU referendum. However, the motion is at odds with Corbyn’s previous statements on the issue and is not binding. It will be taken to the party’s policy forum, which will consider it alongside other factors when deciding what the party’s official EU policy is.

Brexit set to dominate Tory Conference

The Conservative Party Conference, beginning this Sunday, is set to be dominated by Brexit. The splits within the Cabinet and the wider Party over access to the Single Market are likely to become even more apparent as discussions take place in Birmingham. Sunday afternoon will see speeches from the Prime Minister and the three Brexit Ministers (Foreign Secretary Boris Johnson, Brexit Secretary David Davis, and International Trade Secretary Liam Fox) as part of a session on how Britain can make a success of Brexit. Following the turf wars between Johnson, Davis and Fox over the summer, all eyes will be on them to see whether further cracks appear. Whilst the usual conference speech message discipline can be expected from the major Brexit players, other Ministers and Parliamentarians are likely to use the event to push for their own preferred versions of Brexit on the fringe circuit. 

Keep an eye on our updates from the Conservative Party Conference by following @PoliticalIntel.

European update

Super Matteo – Brits can’t get a special deal: Italian Prime Minister Matteo Renzi has said it would be impossible to get a deal that would give British people more rights than other EU citizens and that the Brexit process would be ‘very difficult’. Renzi was also damning of the campaign, accusing David Cameron of using a referendum on foreign affairs to solve internal Conservative problems and called the result a bad decision. Renzi is also in the midst of his own political crisis and could be forced to step down should he lose an upcoming referendum, which would limit the powers of the Upper House. 

Schäuble wants to teach Boris a lesson: German Finance Minister Wolfgang Schäuble offered to visit Foreign Secretary Boris Johnson with a copy of the Lisbon Treaty to prove to Johnson “that there’s a certain connection between the single market and the four freedoms”. The flippant comment reflects the German’s Government frustration about the manner in which the UK Government is approaching Brexit and follows Johnson’s comments saying there was ‘no link’ between freedom of movement and the single market. 

German business bigwigs talk Brexit: Markus Kerber, head of the federal association of German industry, said there needed to be a “hard exit” to avoid uncertainty. A clean break, he said, would help business know where the UK stands and that “a fudge in the middle” would be a deal that would need to be renegotiated in the future.

In another interview, prominent German businessman Mathias Döpfner told the FT that Britain would be better off than continental Europe as the UK would be more attractive to investors and has a much more ingrained free-market approach.

Sarkozy promises new Brexit deal: Former French President Nicolas Sarkozy has said he will present Britain (and Europe) with a new treaty that will keep the UK in the EU if he becomes President next year. Sarkozy is currently fighting for the Republican party nomination in what has been seen as the ‘real’ election as the Republicans are almost certain to beat Francois Hollande next year. The suggestion has been scoffed at by EU leaders, who agree that ‘Brexit means Brexit’ and do not see any way in which the vote can be reversed.

Parliamentary update

While Parliament is on recess for party conference, the deadline to respond to the House of Lords EU Internal Market Sub-Committee’s inquiry into trade into Brexit nears. The Committee is seeking views from selected respondents, including industry associations, about the impact of Brexit on the sector as a whole, including access to the Single Market, future trade terms and opportunities and challenges. This is ahead of further public evidence hearings in October, as this important parliamentary committee analyses the impact of Brexit across a variety of sectors.

Please contact us if you’d like further information on this inquiry and how you can submit evidence.

Duals at dawn

And in another news…at least 10 MPs and Peers have reportedly applied for an Irish passport following the outcome of the EU referendum, leading to some to call on those Parliamentarians to resign. Overall, British applications for Irish passports has risen since the vote for Brexit – in August alone they doubled to 6,710 applications.

Timeline

  • 1 October Michel Barnier begins as European Commission’s Chief Brexit Negotiator
  • 20 – 21 October Next European Council summit
  • 23 November Chancellor of the Exchequer to give the Autumn Statement

Party Conference dates

  • Conservative Party 2 – 5 October (Birmingham)
  • SNP 13 – 15 October (Glasgow)

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