Brexit Update 10th August 2017

By August 24, 2017 Brexit Updates

Top 3 developments

  1. Davis’s letter to the Lords reveals disagreement on EU citizens’ rights post-Brexit.
  2. Downing Street confirms Brexit position papers will be released next week.
  3. Westminster and Holyrood clash over repatriation of powers after Brexit.

UK Update

Davis updates parliamentarians on the second round of negotiations

In a written statement to the House of Lords EU Committee, David Davis has updated parliamentarians on the progress made during the second round of Brexit negotiations. Contrary to reports that the negotiations have not started well, Davis says he had four days of “full and substantive discussion” with his European counterparts. According to Davis, the main focus was citizens’ rights, though the financial settlement and Irish border problem were also discussed.

Despite “a high degree of convergence” on the issue of citizens’ rights, Davis said that there is still disagreement on compliance enforcement, family reunion provisions and “onward movement” rights. The statement reveals that Brussels wants Brits currently living in the Union to only have the right to remain where they are currently residents. However, Davis wants the 1.2 million Brits living in the EU to retain the right to move around Europe after the UK leaves the bloc. Addressing the EU’s proposal, Davis said “we have questioned whether this is consistent with the principle of reciprocity, and also with the Commission’s desire to protect rights currently enjoyed under EU law. This will be the subject of further discussion in due course”.

On the Irish border issue no agreement appears to have been reached. Similarly, on the financial settlement Davis went no further than saying the issue was discussed with a focus on “exploring the EU position”. Nevertheless, the statement does clearly reinforce Davis’s refusal to give in to the EU’s insistence that the rights of citizens should be guaranteed by the European Court of Justice. This seems to be a red line for both sides as the UK argues that citizens’ rights must be policed by a mutually agreed dispute resolution mechanism; meanwhile, the EU wants the ECJ to continue ruling on any infringements of EU law if the facts of the case took place before Brexit.

Finally, Davis ends the statement with the assertion that “we cannot negotiate the UK’s exit properly without addressing what our future relationship looks like”. This is, once again, at odds with the EU position, since Barnier has made it clear that sufficient progress must be made on the divorce agreement, before discussions progress to the future relationship.

Government to publish Brexit policy papers in coming weeks

No. 10 has confirmed that the Government will publicly release a series of policy position papers next week. Until now the UK Government’s position on key issues such as the Irish border, Customs Union and Single Market has remained vague. This has led to criticisms that the Government is unprepared for talks and is not telling the EU what it wants. Most recently, former head of the Foreign Office Sir Simon Fraser said the UK Government had been “a bit absent” in Brussels, and that the negotiations “have not begun well”. Addressing Cabinet divisions, Sir Fraser said “we haven’t put forward a lot because, as we know, there are differences within the Cabinet about the sort of Brexit that we are heading for and until those differences are further resolved I think it’s very difficult for us to have a clear position”. The announcement also comes after officials in Brussels warned that negotiations will not progress to the next stage (the UK’s future relationship with the EU) until “sufficient progress” has been made on resolving key issues – including the Irish border, the financial settlement, and the status of EU nationals.

UK and Scottish ministers disagree on Brexit powers repatriation

Representatives from the UK and Scottish governments met this week to discuss the repatriation of powers after Brexit. First Secretary of State Damian Green met Deputy First Minister John Swinney and Scotland’s Brexit Minister Michael Russell in Edinburgh. Mr Russell reiterated that Scotland is “absolutely clear” that it cannot recommend that Holyrood approves the EU Withdrawal Bill in its current form. Russell and Swinney insist that the Scottish government expects full powers over farming, fisheries, environmental law, justice and policing. The Scottish government argues that the bill does not currently contain any such provisions and constitutes, in Nicola Sturgeon’s words, “a naked power grab”. Meanwhile, Damian Green has said the UK Government expects to sign a deal with Scotland before the Great Repeal Bill comes into force; however, he also ruled out any substantial changes to the existing bill.

UK judges need clarity after Brexit, says Supreme Court judge

Britain’s most senior judge has called for the Government to provide greater clarity on how UK law will be developed and interpreted after Brexit. Currently the Government’s Great Repeal Bill says that even though British courts will not be bound by European Court of Justice decisions after the UK leaves the Union, they “may do so if it considers it appropriate”. However, warning that judges cannot be held accountable for misinterpretations if the law is uncertain, Lord Neuberger said Parliament needs to be “very clear” in telling judges what to do about ECJ decisions post-Brexit. He said, “if [the government] doesn’t express clearly what the judges should do about decisions of the ECJ after Brexit, or indeed any other topic after Brexit, then the judges will simply have to do their best”.

Downing Street denies UK will pay €40bn Brexit bill

Downing Street has dismissed claims that the Government is willing to pay a Brexit divorce bill totalling €40bn. It was rumoured that Theresa May was willing to pay up to €40bn as a compromise against Brussels’ alleged €60bn demand. However, a Downing Street source quoted in the Sunday Telegraph has called this “inaccurate speculation”, implying that the Government will not accept such a high figure. Nonetheless, May and Davis have both accepted that the UK will have to pay a divorce bill, though they have not, as yet, made clear what figure they will accept; greater clarity on the divorce settlement is expected next week when the Government releases its position papers.

Bank of England warns Brexit will strain regulation

Deputy Governor of the Bank of England Sam Woods has warned that regulating the City after Brexit could overburden the Bank and put a strain on its ability to adequately regulate the financial sector. As head of the Prudential Regulation Authority (PRA), Woods warned that the UK’s exit from the Union without a transition deal in 2019 would cause “significant issues” for the stability of the country’s banks. Painting a stark picture, Woods warned that the “material extra burden” on the PRA means the regulator would have to take its eye off other areas. In a letter to head of the Treasury Select Committee Nicky Morgan, Woods advocated for a transitional agreement; he wrote, “some form of implementation period is desirable in order to give UK and EU firms more time to make the necessary changes to adjust to the UK’s new relationship with the EU in an orderly way”.

Ruth Davidson calls on May to review immigration target

Scottish Tory leader Ruth Davidson has called on Theresa May to consider scrapping her manifesto pledge to reduce immigration to the tens of thousands. Davidson has previously defended the target. However, writing in the Telegraph, she said “the British government has failed to hit its self-imposed ‘tens of thousands’ target in any year. Brexit is a big reset button and should – in theory – make that much easier to do so. But we have to ask whether the target continues to be the right one”. Advocating for rational discussion rather than “easy slogans”, Davidson also urged No. 10 to drop students from the official migration statistics. Davidson’s comments are yet another display of divisions in the Tory top ranks; whilst the Prime Minister has stuck by her “tens of thousands” manifesto commitment, Amber Rudd and Philip Hammond are known to be in favour of a flexible immigration transition period, whilst Liam Fox claims that any such arrangement would not “keep faith” with the referendum result.

Ireland proposes special EU-UK customs union

Irish Taoiseach Leo Varadkar has called on the UK Government to find “unique solutions” to the Irish post-Brexit border problem, including the introduction of a bespoke customs union. Referencing Turkey’s bilateral customs union arrangement with the EU, Varadkar said, “if we have one with Turkey. Surely we can have one with the United Kingdom”. He went on to say that any such “practical solutions” would need to be negotiated, and would not be offered by default – hinting, perhaps, at how closely guarded David Davis has kept his negotiating positions thus far.

European Update

Spain won’t ‘jeopardise’ Brexit deal over Gibraltar

Spanish Foreign Minister Alfonso Dastis has made clear that Spain will not block a Brexit deal by attempting to regain sovereignty over Gibraltar. Dastis sought to allay fears that Gibraltar could be used a pawn during the Brexit negotiations, after the negotiating guidelines produced by Brussels in April indicated that Spain would be given a veto on whether any Brexit agreement would be applied to Gibraltar. Speaking to the Spanish paper ABC, Dastis said “what I don’t want to do is jeopardise an EU-UK agreement by subjecting it to a need to alter Gibraltar’s status at the same time”.

Timeline

  • 4th September – Parliamentary recess ends
  • 14th August – UK Brexit position papers expected
  • 28th August – Third round of Brexit negotiation talks
  • 7th – 11th September – EU (Withdrawal) Bill Second Reading
  • 18th September – Expected start of fourth round of Brexit negotiation talks
  • 24th – 27th September – Labour Party Conference
  • 1st – 4th October – Conservative Party Conference
  • 9th October – Expected start of fifth round of Brexit negotiation talks
  • 19th October – EU Summit