Brexit Update – 2nd March 2017

By March 2, 2017Brexit Updates

Top 3 developments

Lords amend Brexit Bill: Theresa May suffered her first Brexit defeat in the House of Lords as Peers voted by 358 to 256 to guarantee EU nationals the right to stay in the UK after Brexit. The Government described the result as ‘disappointing’ and is expected to seek to overturn the Lords amendment. However, reports suggest that 30 Conservative MPs are expected to defy the Government and vote in favour of the Lords amendment when the Bill returns to the Commons. It’s not all doom and gloom for May though; the Government succeeded in voting down an amendment which would have allowed the UK to retain its membership of the single market. Ministers nonetheless remain confident that they are on track to trigger Article 50 by the end of the month.

I want EU to stay: Government was forced to backtrack from its plans to set a March cut-off date for allowing EU citizens to settle in the UK. Having previously stated that EU citizens would only be allowed to stay in the UK if they arrived before Article 50 is triggered, in a letter to the House of Lords Home Secretary Amber Rudd reassured Peers that no cut-off date would be implemented without the prior approval from Parliament. The move was likely an attempt to quell the considerable opposition in the Lords to May’s Brexit plan.

Pathways for disunity?: Juncker has proposed to the European Parliament five ‘pathways for unity’ which detail possible routes forward for the Union post-Brexit. It remains to be seen whether any of these will be taken up, but the report suggests the EU is heading for a major overhaul post-Brexit.

UK Update

Remoans of (dis)pleasure
George Osborne, Sir John Major, and the British Chambers of Commerce have this week all warned against the risks of a failed Brexit. The Former Chancellor warned that leaving the EU without any trade deal would amount to ‘the biggest act of protectionism in British history’ and that that ‘no amount of trade deals with New Zealand are going to replace the trade that we do at the moment with our big European neighbour’.
The British Chambers of Commerce echoed Osborne’s concerns, warning that, if the UK is not able to reach a trade arrangement with Europe after two years ‘we should seek an extension to the negotiating period to enable completion of both agreements concurrently’. The Foreign Secretary has meanwhile pushed back against these concerns, saying there is every reason to believe a ‘win-win’ EU deal could be done within two years.
Former Prime Minister John Major also joined the debate, warning that a so-called hard Brexit will encourage a second Scottish independence referendum and that it would be “reckless” to ignore the risk. Osborne, Major, and the Chambers’ statements are just the latest in a long line of warnings heeded by industry and experts – which Government has continued to dismiss.

Referendum campaign spending under investigation
The spending returns of the Stronger In and Vote Leave campaigns in last year’s EU referendum are under investigation by the Electoral Commission. The spending returns show that the Brexit battle was the most expensive referendum ever fought in British political history, with more than £32m being spent in total.

The Commission has said invoices and receipts submitted by the two umbrella Leave and Remain campaigns appeared to be incomplete and they were seeking further details in relation to certain payments. The outcome of the investigation is highly unlikely to influence the Brexit process, but it could fuel claims of unsuitable conduct during the campaign.

Turkeys vote for Christmas
The Hansard Society has warned that MPs face a very real threat of losing their powers during the Brexit process. The society, which promotes parliamentary democracy, predicted that government ministers will attempt to exploit delegated legislation and ‘Henry VIII powers’ (powers enabling the Government to make subsequent changes to legislation without further Parliamentary scrutiny).
The director of the organisation said, ‘If Government is going to ‘repeal, amend and improve’ EU-related law through the Great Repeal Bill, Parliament needs to have procedures in place to scrutinise the proposals effectively’. The Society’s warning comes at a time when the Prime Minister’s leadership style has come under sustained fire because of the tactics she has used to influence both Chambers of Parliament.

Brexit Spending Review
Chancellor Philip Hammond has said next week’s Spring Budget will be focused on ‘near-term measures’ to ensure stability as the process of the UK leaving the EU begins. Addressing the House of Commons, Hammond said his priority for the Budget next Wednesday will be policies which are helpful to the Brexit process as well as helping improve productivity. The Chancellor also added that addressing the skills gap will be a key feature of the statement he will make next week. All eyes will be on the Chancellor to see if he can restore consumer confidence as the UK begins its exit from the EU.

Copeland of hope and Tory
The Labour Party are currently dealing with the fallout from the historic defeat at a crucial by-election last week in a seat that has been red since it was created in 1982. Corbyn has avoided his own MPs after declining an invitation to make an appearance at the weekly meeting of the parliamentary Labour Party. Meanwhile, the Labour leader’s official spokesman admitted it would “clearly be the case” that, if things remain as they are, then the party cannot beat the Tories. Despite the spokesman’s claims that he is confident the situation can be rescued, the by election defeat only adds to the pressure on Corbyn’s leadership at a time when party unity is essential for providing effective scrutiny and opposition to Theresa May’s Brexit plans.

European Update

EU sent to the Junckyard?
European Commission President Jean-Claude Juncker has outlined five future ‘pathways for unity’ for the European Union after Brexit. His white paper looks at various options, from becoming solely a Single Market to forging even closer political, social and economic ties.

The 27 leaders of EU countries will discuss the plans, – without Britain – at a summit in Rome later this month. The proposals include: Path one: ‘Carrying on’; Path two: ‘Nothing but the Single Market’; Path three: ‘Those who want to do more’; Path four: ‘Doing less, more effectively’; Path five: ‘Doing much more together’. It remains to be seen whether these proposals will be successful, as it is likely that his plans for a “born again” Union will face significant opposition from Eastern states fearing marginalisation.

Timeline

• 7th March Report stage and third reading of Brexit bill in the Lords.
• 8th March 2017 Spring Budget.
• 9th / 10th March European Council meeting.
• 13th, 14th, 15th March Lords amendments to the Brexit bill considered in the Commons.
• 25th March 60th anniversary of the Treaty of Rome