Brexit Update 25th May 2017

By June 9, 2017 Brexit Updates

Top 3 developments

EU sets out timetable for Brexit negotiations to begin on 19th June – with Michel Barnier formally appointed to broker the ‘divorce’, and the estimated exit bill currently at €100bn

The status of EU citizens is one of the EU’s top priorities – alongside the UK’s bids to stay in the single market without countenancing free movement. Net migration in the UK has fallen by a quarter as more EU citizens leave.

The Manchester attack puts the international focus on safety – the importance of shared data in international defence is firmly on the agenda.

General Election

The Manchester Attacks

The appalling attack in Manchester meant election campaigning was suspended for much of this week. Low-level local campaigning will resume today, wider campaigning tomorrow. UKIP have broken rank in releasing their manifesto today; Nuttall defended the decision by declaring “We took the decision that the best way to show these people they will be beaten and they will not win is to get back into the saddle and launch our manifesto”. Today’s UKIP manifesto launch saw the party say May and contemporary politicians should take “some responsibility” for the terrorist attack. The leak of pictures of the attack and confidential details to the US media has elicited understandable fury from the government. Andy Burnham condemned the leak as “frankly disgusting”. May is set to confront Trump over the leak, and the UK police have stopped sharing information regarding the attack with the US.

Threat levels remain at “critical”, as soldiers were drafted on to the streets of the UK, including parliament, Downing Street, and Buckingham Palace.

Strong and stable, or weak and wobbly?

Earlier in the week, in what seems a very long time ago, the Prime Minister was on the backfoot over her response to criticisms of the Conservative manifesto. Her flirtation with centrism in the manifesto has elicited mixed responses. Her proposal to roll out free breakfast for primary school children has been judged to be poorly costed, and the so-called ‘dementia tax’ has attracted scathing criticisms from the left and the right – the former consider it to be cruel, the latter an attack on inherited wealth. May’s team have since pledged that there would be – and always had been – a cap on the amount that social care patients would have to posthumously pay towards their own care. This, however, was not in the manifesto. A particularly ill-handled Andrew Neil interview saw her spluttering that her u-turn on this policy was not, in fact, a u-turn, but a “clarification”; “nothing has changed, nothing has changed!” BT chairman Sir Mike Rake slammed “the continuing reluctance to acknowledge the huge need and benefit we obtain from immigration”, as well as “too much populist, anti-business rhetoric in all of the manifestos”. Proper discussions of Brexit were notably absent in the Conservative manifesto. In short, as she attempts to pander to both Labour and UKIP supporters, May is learning that the centre ground can be an uncomfortable place for a Conservative to be.

Labour MP’s admission that “I don’t like Corbyn” doesn’t hurt the party’s polling

The fallout from the manifesto led to the polls between the Conservatives and Labour to continue to tighten. However, analysts claim that elections typically overstate the swing towards Labour, due to too-small or biased sample groups. Phil Wilson, the MP in Blair’s old seat, has explicitly criticised the party leader in a bid to find common ground with his constituents: “People don’t like Corbyn; I don’t like Corbyn”. Eyebrows have been raised over Corbyn’s links to the IRA, and at a time when patriotism is at a political premium, Labour could really do without this sort of thing. However, the strident criticism of May’s ‘dementia tax’ from Labour MPs made light work of the policy, forcing May to u-turn in a matter of days. Nonetheless, pollsters continue to predict a comfortable Conservative victory.

UK Update

“The row of the summer”

Michel Barnier has scheduled 19th June as the kick-off date for Brexit talks. This news was not well-received by the UK’s Brexit secretary, David Davis who rejected the timetable – and the proposed final ‘Brexit bill’ – saying that discussions of the UK’s financial obligations and the future status of the Northern Irish border would lead to “the row of the summer”. He deemed the timetable “wholly illogical”. Davis declared that the government are seeking an agreement that “effectively freezes” the rights of EU nationals living in the UK post-Brexit. It is worth noting that these remarks were made before the Manchester attack – the general consensus seems to be that discussions post-attack are more conciliatory in tone.

Security takes centre stage in negotiations

In light of the awful attack in Manchester, and with negotiations looming, security powers take on fresh importance. Jan Kral, acting Secretary of State for EU Affairs said of Manchester that “perhaps this is one of the events, no matter how tragic it is, that shows that Brexit is an unfortunate thing… I’m convinced if not by goodwill then by necessity we will be forced to cooperate even more closely.” The ideological motivation behind the attack has reiterated the cultural bonds between the EU member states, as well as the practical importance of collaborative defence. Intelligence sharing and co-operation between the European states and the UK has never been more important – particularly given Trump’s fondness for sharing confidential information – whether with Russia or with the US press. If Theresa May were to deliver on her promise that “no deal is better than a bad deal”, then the UK would leave Europol, the Schengen Information System, and the European Arrest Warrant system abruptly. This would be bad for all concerned. May wants a bespoke security deal for the UK. A study by RAND described the prospective UK-EU security relationship as “too big to fail”; May could well get that deal.

European Update

You spin me right round, baby, right round

May isn’t the only one in the habit of making u-turns. Today Donald Trump reportedly told the European Union that he fears that Americans may lose jobs because of Brexit. Trump is evidently feeling magnanimous; he recently observed that the EU has been doing a “better job” of late. Trump’s revised opinion is thought to be due to his wish to “do a deal” on trade with Germany. An anonymous German politician reported that Merkel had to tell trump 11 times that America could only do a trade deal with the EU, not specific nation states. Perhaps the UK won’t be “first in line” for a trade deal with the states.

Hard Brexit or, er, Hard Brexit

Andreas Dombret – board member of the German Bundesbank – offered a gloomy prediction for the Brexit negotiations. “It doesn’t look like a soft Brexit to me at all. It looks like either a hard Brexit, or a very hard Brexit.” He went on to stress the importance of proper management and regulation for the banking and financial sector, so that “the investment banking products which have been offered through London will be offered somehow on the continent in a legal way”. The European Central Bank’s Vice President Vitor Constancio said that Brexit will be “much less meaningful” for European players than it would the UK, with the latter’s financial industry bearing the brunt of the financial disruption that would ensue were the UK to push for a hasty or rash exit.

Barnier the diplomat

Michel Barnier has been officially appointed to broker Brexit talks. So far he has proved himself to be an even-handed diplomat. Whilst he has stressed the grave repercussions – both financial and political – if May walks away from the negotiating table, he has struck a conciliatory tone. “Barnier is delivering a much more compromising tone,” said Steffen Kampeter, Germany’s former deputy finance minister, and the director general of Germany’s BDA federation of employers. “There seems to be a growing flexibility in the process.” Barnier stressed the importance of a “united Europe” and reciprocity and “sustainable trust” in Brexit talks – newspaper reports suggest that Barnier may be resisting pressure from Paris and Berlin to inflict the highest possible cost on the UK. The proposed Brexit bill currently stands at €100bn, although Barnier maintains that the figure “depends on the methodology”. Access to the single market and rights for EU citizens remain two of the biggest issues to contend with.

Timeline

  • 22nd May – European Governments set to approve final negotiating directives.
  • 31st May – Irish High Court begins hearing case on revocability of Article 50
  • 8th June – UK General Election.
  • 13th June – Parliament reconvenes.
  • 19th June – State Opening of Parliament.
  • 19th June – Tentative start date for Brexit negotiations.
  • 1st July – 3rd September – Parliamentary recess.