Top 3 Developments
Steady May: Fresh from her first major international summit, Theresa May has urged MPs to be patient with the Government and said she would not provide a ‘running commentary’ on negotiations. Elsewhere in Government, both Liam Fox and David Davis gave their first statements to the House, with Davis accused of not providing any detail and going off message in regards to accessing the single market.
Corbyn confused: The Leader of the Labour party has indicated he does not support being a member of the single market, contradicting his own Shadow Chancellor and the view of the Labour Party throughout the referendum campaign and afterwards.
EU turns inwards: With European leaders meeting in Bratislava without Britain next weekend, a number of regional blocs are emerging to fight for their view of how Europe should look post-Brexit. Germany is trying to find allies in northern Europe, the eastern European nations are trying to get powers returned to Member States and southern Europe is seeking an end to austerity.
May may comment on Brexit, but not now
With Parliament resuming after the summer break and Theresa May returning from her first major international summit, there were high hopes that the Government would reveal its hand on Brexit, yet ultimately it turns out that the PM intends to keep her cards close to her chest for now.
Briefly, it looked like we would get a glimpse of the Government’s position as Brexit Secretary, David Davis MP, told the House of Commons that it was “very improbable” for the UK to retain its membership of the single market as this would come with limited controls over immigration. However, Davis was quickly publicly rebuked by May’s spokesperson who suggested that Davis was simply setting out “his views” and that all options were still on the table. During PMQs and the subsequent statement on the G20 summit, May failed to reiterate her previous mantra of “Brexit means Brexit” and cautioned Parliament that she was not prepared to provide a “running commentary” on the issue.
Trade was obviously a key issue at the summit and while May was pleased to inform the House that Australia was keen to explore a bilateral trade deal, it later became clear that any proper negotiations would have to wait until the UK actually left the EU. Liam Fox elaborated on this in his first oral questions this week, where he made the candid admission that the EU-US trade agreement (TTIP) may never happen due to French and German elections and the former head of UKTI told the press that substantial trade deals could take up to ten years to conclude.
Elsewhere in Whitehall, Departments continue to hold discussions with industry, with the Treasury the latest to publicise such talks. After the PM’s shake-up of the Whitehall structure, the new departments are taking shape with the Brexit Department now having 180 staff in London and 120 in Brussels and Sir Martin Donnelly stepping down from his role as Permanent Secretary at BEIS to help setup the new Department for International Trade.
Corbyn: No single market for me
Following the confusion over the Government position on the single market this week, Labour looked to follow suit. Despite Shadow Chancellor John McDonnell’s previous assertions that pulling out would cause ‘substantial damage’ to the economy, Jeremy Corbyn suggested he wants Britain to exit the single market. Corbyn explained he would like access to the single market, but would not want to sign up to all the obligations full membership entails. The comment served to further inflame internal issues, with leadership challenger Owen Smith and prominent remain campaigner Chuka Umunna railing against his position.
Despite these issues, Corbyn is still very much the favourite to retain the Labour leadership, leaving the Labour rebels to plot their next move. Yesterday, MPs backed plans to re-introduce an elected Shadow Cabinet, a move seen by many as a way of keeping the leader in check. However, Corbyn suggested that party members could get a say – a move that would strengthen his position
Carney claims his decisions will keep recession away
Bank of England Governor Mark Carney appeared in front of the Treasury Select Committee this week saying the “timely, comprehensive and concrete” action taken by the bank helped the economy adjust in the immediate shock after the referendum. He robustly defended himself when he received a grilling from MPs who said his actions were driven by panic, claiming his decisions were a factor in a number of economic indicators showing positive outlooks for the economy.
This week has been another uncomfortable period for economic forecasters as Brexit has once again not caused the predicted negativity. The indices for the service and manufacturing sectors showed that output was high, although the pound has fallen to $1.33 in the last 24 hours.
European update
Brexit is still a defining issue with Europe prepping for a major meeting without Britain next weekend to look at the future of the union and establish some ‘red lines’ in the upcoming negotiations.
Tusk meets May
European Council President Donald Tusk told Theresa May ‘the ball is in your court’ on Brexit after meeting in Downing Street this morning, where he once again said that Brexit should happen sooner rather than later. Tusk will be leading negotiations for the Council alongside Commission representative Michael Barnier and today it was confirmed that Guy Verhofstadt will act as the European Parliament negotiator. Verhofstadt was previously Prime Minister of Belgian and is a keen federalist, and will be keen for Parliament to stamp his authority on negotiations.
EU soul searching
The upcoming meeting of the remaining EU Member States has been billed as a chance to re-evaluate the whole European project, and with so much at stake, regional blocs have formed to fight for their vision for a post-Brexit EU.
The ‘Visegrad Group’ of eastern European states have been vocal with their desire to see powers returned to Member State Capitals, saying it was vital Europe didn’t lose national and cultural identities in the face of globalisation and migration. Meanwhile the Greek Prime Minister, Alexis Tsiripas, is meeting with other Mediterranean states to look at how the summit can be used to push back on austerity and push a more left wing agenda. Germany, on the other hand, knows it has lost a like-minded friend in Britain and is trying to form common positions alongside northern EU countries to push an agenda of fiscal discipline and integration.
European Parliament to become more left-wing?
Moves to form a ‘Grand Coalition’ of left-wing parties are under way as representatives from left-wing groups are apparently in talks with the centre left Socialists and Democrats (S&D) to get them to break up the current agreement between the S&D group and centre right European Peoples’ Party. Such a move will be attractive to the S&D as they will become the dominant force in the European Parliament and could see the European Parliament pursue a more pro-consumer, socialist agenda.
Au revoir Hollande?
A new poll has Francois Hollande finishing third in next year’s election, behind the Republican candidate (either Alan Juppe or Nicolas Sarkozy) and Marine Le Pen’s National Front who are predicted to face each other in a run off. The poll shows that Hollande is on course to get as little as 15% of the vote – half of what Le Pen and the Republicans are currently polling and itadds to the speculation that the Socialists will force him to withdraw from the race in order to avoid a damaging split in the French left.
Timeline
- 13 September, 3:00pm Foreign Affairs Committee questions David Davis as part of their Implications of leaving the EU for the UK’s role in the world inquiry
- 17-18 September Summit of the 27 remaining countries of the European Union
- 24 September Labour leadership election result
- 23 November Chancellor to give the Autumn Statement
Party Conference dates
- UKIP 16- 17 September, (Bournemouth) – the party’s new leader will be declared
- Liberal Democrats 17 – 21 September (Brighton)
- Labour Party 25 – 28 September (Liverpool)
- Conservative Party 2 – 5 October (Birmingham)
- SNP 13 – 15 October (Glasgow)
