Brexit Update – 23rd February 2017

By March 24, 2017Brexit Updates

 Top 3 developments

May’s finger’s on the button

The Prime Minister has said she will trigger Article 50 on Wednesday 29th March. May asked the UK’s ambassador to the EU to inform the European Council President of the date. Meanwhile an EU spokesman said it was ‘ready and waiting’ for May’s formal notification. European Council President, Donald Tusk, is expected to respond to the notification with draft guidelines by Friday. In the same announcement the Prime Minister’s spokesman also quashed rumours that an early general election will be held – saying instead that the Government is focused on getting the best possible deal for the UK.

Tusk’s dash for the summit

Shortly after the announcement that Article 50 will be triggered next Wednesday, Donald Tusk confirmed that an EU Summit will be held exactly one month later – on the 29th April – to discuss Brexit. Tusk made the announcement during a press conference in Brussels with Japanese Prime Minister Shinzō Abe. The meeting will be used to agree the guidelines for the EU’s negotiating team – to be headed by Michel Barnier. Tusk added, “I personally wish the U.K. hadn’t chosen to leave the EU. But the majority of British voters decided otherwise. Therefore, we must to do everything we can to make the process of divorce the least painful for the EU”.

‘I got bills, they’re multiplying’

According to a report by the Institute for Government (IfG), Theresa May’s government will need to enact up to 15 new bills and thousands of pages of secondary legislation, in addition to the Great Repeal Bill, in order for the UK to leave the European Union. Civil servants are said to be finalising the legislative agenda in preparation for the Queen’s Speech in May. The think-tank also warned that the hefty legislative agenda will inevitably reduce Parliamentary capacity for considering non-Brexit related reforms. The most important bills will be those concerned with the introduction of new immigration and customs rules for the UK, however, legislation will also have to create new policies on agriculture, fishing and trade. The plethora of issues requiring legislation has renewed fears of Henry VIII powers, which allows primary legislation to be altered through secondary legislation (which receives significantly less Parliamentary scrutiny). Jill Rutter of the IfG added, “ideally, you would run the negotiation, see what comes out of it and then give yourself time to implement the results. But the sudden legal change at the moment Britain leaves the EU means a lot has to be in place in the next two years”.

UK Update

The Blair Brexit Project

Tony Blair has warned that Labour should reconsider its stance on Brexit if the government delivers a deal which does not have popular support. Whilst claiming to respect the outcome of the referendum, Blair said it is “possible” that the public mood could change if the negotiations do not result in the promised benefits – in which case, Labour should be ready to capitalise on this. Speaking on the BBC’s Andrew Marr Show he said, “David Davis said they were going to deliver a deal with exactly the same benefits we now have from the single market and the customs union – we should hold them to that”. The Former Prime Minister urged Labour to hold ministers to account, despite the “unparalleled complexity” of securing a deal which delivers exactly the same benefits as the UK has now in the single market and customs union.

Interim deal or no interim deal

Civil servants in the Department for International Trade are said to be discreetly exploring the possibility of securing an interim arrangement with the EU in case a trade deal is not secured within the allotted two-year negotiation period. It is hoped that the interim arrangement – which could last up to 10 years – would allow trade tariffs between the UK and EU to remain at zero until a full trade deal can be negotiated. World Trade Organisation rules afford the UK and Brussels a “reasonable length of time” after Brexit to agree a free-trade deal before trade law would force both sides to impose the same tariffs on each other, as they do on everybody else. Such an arrangement would pacify fears about the UK crashing out of the single market, and thereby facing the EU’s steep external tariffs on goods. A Brexit Department official stressed that the Government’s official position remains that the UK will pursue a full free-trade deal within the two-year negotiation period; however, the official refused to formally deny that an interim free-trade arrangement is being explored.

Farron Fights Back

Tim Farron has successfully introduced a Bill in the Commons which would force a referendum on the final deal secured by Theresa May. The Liberal Democrat leader introduced the Bill through the 10 Minute Rule process. It will have its second reading on 12th May, bit will almost certainly not become law. The introduction of the Bill comes days after Tim Farron called on Tory MPs who oppose a hard Brexit to defect or resign, rather than vote against their conscience. In a direct appeal to Conservative members to join his party, Farron said, “you know it’s wrong, so for pity’s sake, have some self-respect. Defect or resign. If you don’t, then when the next election comes we will do to you what we did to Zac Goldsmith”.

Cross-border peers

The Lords Justice Sub-Committee has warned than an alternative cross-border legal framework should be established before the UK formally exits the European Union. The Committee said that the return of child abductees during family breakdowns and international business disputes in Europe are likely to become significantly more difficult post-Brexit. Unless mutual recognition of judgments is established during the negotiations, the Lords warn, “there will be real hardship” for families and businesses who could be subject to 27 separate, national sets of regulations. The Committee also points to an “inevitable” increase in cross-border litigation cases and a “loss of certainty” once the UK is no longer subject to Brussels regulations; the report concludes, “to walk away from these regulations without putting alternatives in place would seriously undermine the family law rights of UK citizens and would, ultimately, be an act of self-harm”.

WTO OK?

It is reported that Pro-Brexit ministers are relaxed about the prospect of the UK leaving the EU without a replacement trade deal. Such an arrangement would mean the UK reverts to WTO trading rules. Amongst others, foreign secretary Boris Johnson has suggested WTO rules would be “perfectly OK”. However, there is significant opposition to such an arrangement amongst the Tory benches. Bath MP Ben Howlett said, for example, that “anyone that suggests that WTO would be a good thing is bonkers. This ideological baloney has to stop before we face an absolute disaster”. The disagreement is likely to become one of the most divisive issues Theresa May has to contend with, and will cause a major headache for Cabinet – and, even, party – unity.

European Update

Move out or lose out

EU officials have warned UK-based airlines – including Ryanair, EasyJet, British Airways and TUI – that they will need to relocate their headquarters, or sell off shares to European nationals, if they want to continue flying routes within continental Europe post-Brexit. EU rules stipulate that in order for an airline to fly in Europe, they must have a significant base on EU territory and a majority of their capital shares must be EU-owned. The warning makes it more inevitable that airlines will begin significant restructuring – which is likely to result in the loss of British jobs. EasyJet is amongst airlines currently establishing an alternative EU-based operating company in order to obtain an EU aircraft operating license.

‘Oh no EU don’t’

Chief EU Brexit negotiator, Michel Barnier has warned against the British Government’s ‘no-deal’ rhetoric. Barnier has directly challenged Theresa May’s claim that “no deal is better than a bad deal”, and argued that walking away from the negotiating table without a trading or customs deal in place would have serious economic repercussions for the UK. Barnier made the claims in a speech to the Committee of the Regions, during which he also warned of long queues of lorries at Dover, a lack of certainty for citizens, and custom controls from day one of the UK’s withdrawal. Barnier said “we must settle the accounts” and that the EU “will not ask the British to pay a single euro for something they have not agreed to as a member”. His comments are the latest challenge to ministers’ insistent claims that the UK should not agree to a large divorce payment.

Timeline

  • 29th March: Theresa May formally triggers Article 50.
  • 31st March: Donald Tusk to have presented draft guidelines to the EU-27.
  • 23rd April: First round of French Presidential Elections.
  • 29th April: Emergency EU Summit.