Brexit Update – 16th February 2017

By February 17, 2017Brexit Updates

Top 3 Developments

Peer Review

Despite Parliament currently enjoying its half-term break, speculation over possible future trouble for the Brexit Bill has continued. Lib Dem remain-supporting peers have tabled a number of amendments which the Government has conceded may be supported by the majority of the House of Lords.

French senate stir things up

The French senate have released a report stating that the UK cannot leave the EU in a better-off position than it is now. The report certainly packs a punch. However, EU members will need to be reminded not to burn bridges, as there are issues of joint interest to the UK and EU – security and defence for example – that all concerned will need to be able to reach a compromise on. Expect to see similar reports as negotiations start in earnest.

Is Brexit hitting home for businesses?

This week saw Microsoft become the latest tech company to increase prices due to the post-Brexit slump in the value of the pound. The move follows that of US-based speaker manufacturer Sonos who last week implemented price rises of up to 25%. Microsoft announced that it is increasing prices on a range of products by up to 15%, following that of US-based Sonos, who last week implemented price rises of up to 25%. Adding to which, the race to succeed London as the headquarters of the European Medicines Agency (EMA) intensified this week as it was revealed that 20 EU countries are competing to take the regulatory agency from the UK once Brexit has been completed. The country which gains the headquarters is widely expected to see a significant boost to their pharmaceutical industry.

UK Update

Ping Pong on the horizon for Brexit

David Davis, the Brexit Secretary, speaking at a press conference in Sweden, acknowledged that he expects to see the Bill experience some ‘ping pong’ – the stage of a Bill’s passage through Parliament at which amendments accepted by either house are considered by the other. A Lib Dem amendment which would force the Government to give all EU citizens in the UK permanent residency post-Brexit is considered the most likely to be supported by peers. On this issue, the Government has maintained its position that although it wants all EU citizens in the UK to be allowed to remain in the country, it cannot do so until all UK citizens living in the EU have been guaranteed the right to remain themselves.

The Government’s acknowledgement of possible future amendments to the Bill comes after Leader of the House of Commons, David Lidington, stated that the House of Lords should “take full account of the strength of opinion from the elected house’ when proposing and debating amendments to the Brexit Bill. Lidington emphasised that the Bill passed through the Commons with a majority of over 300 and was unamended.

Despite the efforts of the Lib Dem peers, it is unlikely that any particularly significant amendments which would hinder the triggering of Article 50 will be accepted as part of the Bill, and the Prime Minister is still expected to meet her target of formally beginning the UK’s withdrawal by the end of March.

Backlash from Brexit

A recent document leaked to the Guardian outlined that British nationals living on the continent could expect a backlash as a consequence of the government’s treatment of foreigners since the EU referendum. This will be connected to the Brexit Bill and the decision by MPs last week to reject an amendment to protect EU citizens in the UK, something that the Lib Dems hope to change in the Lords. Corbyn who supported the Brexit Bill in the commons last week, made a sudden, headline grabbing, response in regards to the content of the document claiming that the Government must end their ‘Hunger Games’ approach to Brexit and the consideration of British nationals living abroad. What will strengthen Theresa May’s Brexit negotiations are the latest figures released from the Office of National Statistics saying that 450,000 more migrants are working in the UK.

Weak week ahead for Corbyn?

A tough few weeks for Jeremy Corbyn’s Labour Party may come to a head with two by-elections next week – both Stoke-on-Trent Central and Copeland go to the polls following resignations of Labour MPs. Whilst Labour is expected to hold off UKIPs challenge in Stoke, the Conservatives are tipped to take Copeland.

Opening gambit in The Gambia

As part of the Government’s ongoing charm offensive, Foreign Secretary, Boris Johnson, visited Ghana and The Gambia, meeting the recently elected President Barrow. Johnson was especially pleased at the news that The Gambia intends to re-join the Commonwealth remarking that “the strength of our partnerships show that Global Britain is growing in influence and activity around the world”. Messrs Johnson and Fox will hope that this holds true as Britain seeks to reach out and create new trading relationships.

Inflation fuelled – FTSE down

Inflation reached its highest rate for two and a half years and the fourth consecutive month. Driven by rising fuel and food prices, inflation rose to 1.8% in the previous month. The FTSE100 initially rose yesterday as the inflation rate was just shy of a forecasted 1.9% rise but closed down and was further subdued this afternoon.

ONS record employment

The Office for National Statistics revealed that the employment rate had hit a record high of 74.6% but most notably that this rise was driven by foreign nationals – and therefore showing no sign of an ‘exodus’ of EU workers following the referendum vote.

European Update

Europe Ununified?

The European Commission President, Jean-Claude Juncker, gave an interview this week in which he confirmed that he will step down when his current term ends in 2019. He also expressed concern about the unity of the EU post-Brexit, stating that the UK may look to divide European Union’s 27 remaining members by making different promises to each country during its Brexit negotiations. He stated that he believed that the UK would use this as their negotiating strategy and stressed that the EU needs to present a united European front in order to get the best deal.

German Elections heating up

After another poll put Schulz ahead of Merkel in the autumn German elections, Merkel’s CDU have started to get jumpy. Wolfgang Schäuble, the conservative finance minister, this week likened Mr Schulz to Donald Trump, and party officials have started a whispering campaign about his record in Brussels. Conservatives worry that the left seems united behind its candidate at a time when the Merkel’s CDU and their partners CSU are at loggerheads, particularly over the issue of Merkel’s refugee policy.

Courting disaster

Guy Verhofstadt gave the clearest indication yet that European negotiators were primed to push back on the UK over plans to leave the jurisdiction of the European Court of Justice(ECJ). In an interview with the Guardian, he said that Britain will remain under the ECJ jurisdiction for years to come if it seeks a transition deal to cushion its withdrawal from the EU. This would be a major blow for the Prime Minister, as she has repeatedly pledged to remove the UK from under the writ of European judges as soon as Britain leaves the EU in 2019, and could cause major problems within her own party, who for many of which the ECJ is a particular Brussels bugbear.

Verhofstadt also undermined a number of May’s other key objectives, stating that he did not believe that there could be Brexit and no hard border between Northern Ireland and the Republic. On Britain’s hopes of negotiating a deal at the same time as the divorce, he was equally pessimistic, stating that technically it would not be possible in the time they have.

Timeline

20th Feb Brexit Bill First Reading in the House of Lords

23rd Feb Copeland and Stoke-on-Trent Central By Elections

7th March Brexit Bill to receive Royal Assent

9th March Possible date that UK Government triggers Article 50

9th / 10th March European Council meeting