Brexit Update 2nd November 2017

By November 15, 2017 Brexit Updates

Top 3 developments  

  1. Sexual Abuse Scandal triggers Cabinet reshuffle.
  2. Government agrees to publish Brexit economic impact assessments.
  3. Davis admits initial Brexit withdrawal agreement will favour Brussels.

UK Update

Westminster Sex Scandal

The departure of former-Defence Secretary Michael Fallon has triggered a Cabinet reshuffle, in which new Government whips have been appointed. Gavin Williamson replaced Fallon as Defence Secretary, with Julian Smith filling the newly-vacant Chief Whip position. Meanwhile, Esther McVey has been appointed the new Deputy Chief Whip. McVey and Smith will play a vital role in ensuring the Government’s Brexit-related businesses passes through the Commons. The role of the Whips has become even more important after the Prime Minister lost her majority in June’s General Election.

Government concedes on secret paper publication

The Government has agreed to publish details of the economic impact assessments on how Brexit will impact the 58 sectors of the UK economy, after the Labour Party used an archaic Parliamentary mechanism to force the Government to do so. The Government refused to contest the arcane motion – known as a ‘humble address’ – meaning it passed successfully. Some questioned whether the mechanism was legitimate and binding on Government, and Speaker John Bercow gave Ministers “several days” to respond. On Thursday evening, Commons Leader Andrea Leadsom told the House, “it is absolutely accepted that the motion passed by the house yesterday is binding, and that the information will be forthcoming”. She added, however, that there would be some delay to the release of the documents as ministers decided how best to release the information without jeopardising the Brexit talks. Leadsom added, “it’s difficult to balance the conflicting obligation to protect the public interest through not disclosing information that could harm the national interest, whilst at the same time ensuring that the resolution the house passed yesterday is adhered to”.

Earlier this week DExEU refused a Freedom of Information request to publish the papers, citing that the Department needs to make policy in a “safe space”. It added, “releasing the commissioning document for this exercise, which is still a live policy issue, may undermine the effective formulation or development of policies which are key to our negotiating strategy”. The Government did, however, release a list of which sectors were studied – ranging from advertising, aerospace and agriculture to telecoms, textiles and tourism. DExEU said it would prefer to release information in an “organised and efficient manner” rather than through FOI requests. The Government’s refusal to publish the papers was criticised, not least by Labour MP Seema Malhotra, who made the request. She said, “the government’s reference to needing to conduct Brexit policymaking in a ‘safe place’ seems to be more about keeping parliament and the public in the dark”.

Davis concedes Brexit withdrawal deal will favour Brussels

David Davis has admitted that he expects the Brexit withdrawal agreement to “probably favour the EU”, but that the future relationship “will favour both sides and will be important to both of us”. Some have interpreted his admonition to be hinting at a hefty Brexit divorce bill. Speaking to the House of Lords EU Select Committee, he went on to say that any Brexit deal (both withdrawal and future relationship) could initially be just a “political” agreement, rather than a full legal treaty. Clarifying remarks made during his Commons committee session last week, Davis said he wants talks to wind up by October next year. During this week’s hearing Davis also said his European counterparts are not inclined towards “continuous” talks. Brussels has meanwhile accused the UK of failing to commit to talks, insisting that time is being wasted in arguing about the format and suggesting that had both sides agreed quickly there might have been three full rounds of talks before the next summit.

HMRC says port delays likely

HMRC has warned Ministers that it could take five years to prepare the UK’s ports for Brexit. The Department also announced this week that it will need up to 5,000 more customs officers if no deal is reached with the EU at the end of the negotiations, which could cost up to £450m. The Government announced it expects customs declarations to increase fivefold from 50m to 250m per year after Brexit. HMRC said the new lorry parks, computer systems, and additional border staff needed could take half a decade to implement. HMRC’s warning to ministers comes after boss Jon Thompson refused to guarantee that everything would be ready by Brexit day in 2019. However, DExEU has hit back at the claim, maintaining that the necessary systems are “on track for delivery by January 2019”. Similar reports suggest that ports across Europe will also not be able to supply enough officers to cope with an increase in customs checks.

Johnson offers guarantee on citizens’ rights

Foreign Secretary Boris Johnson has said that the rights of EU citizens living in the UK “will be protected whatever happens”. Johnson’s comments offered stronger assurances than those of the Prime Minister, who has thus far been somewhat ambiguous about what guarantee the UK is willing to offer EU nationals. A department spokesperson subsequently tried to clarify Johnson’s remarks, saying ‘as the prime minister has made clear, safeguarding the rights of EU citizens living in the UK and UK nationals living in the EU is her first priority and we are within touching distance of agreement… The Foreign Secretary was simply reiterating our determination to achieve this”.

The Foreign Secretary also announced this week that the Government would be hiring more diplomats in order to “beef up” the UK’s bilateral influence post-Brexit. 50 additional diplomats are expected, with some already in their posts. The additional staffing is expected to cost around £8m per year.

Bank of England believes Brexit could cost 75,000 finance jobs

The Bank of England has said that Brexit could cost up to 75,000 jobs in the financial services sector, if there no specific UK-EU financial services deal. The number is subject to the nature of the post-Brexit trading deal, but even under the best scenario the Bank still expects job losses as operations are moved to the continent. According to reports, the Bank is expecting 10,000 job losses on “day one” of Brexit if no deal is reached.

Fox urges government to stand firm

International Trade Secretary Liam Fox has said the UK should not give the impression that it will pursue a Brexit deal at any cost. Claiming that historically the UK has tended to put “all of its eggs in the Brussels basket”, Fox told the Commons Foreign Affairs Committee that the Government should be “keen” to secure a deal, but that it should not be “afraid” of leaving the bloc without one. He went on to say that some in the EU want a “political rather than an economic deal”, which would serve to deter other members from leaving.

Whitehall staffing surge to handle Brexit

Brexit Secretary David Davis has said the Government is creating 8,000 new jobs in Whitehall in order to ensure that the civil service can cope with the UK’s departure from the European Union. Briefing the Cabinet on Brexit progress on Tuesday, Davis said a “huge cross-government effort” was underway as part of a “significant acceleration”. Nearly 3,000 jobs have already been created, including 300 lawyers, and HMRC is set to recruit between 3,000 and 5,000 new staff next year. The bill for the additional staffing could top £400m. The Brexit Secretary added that the Government is currently working to deliver around 300 Brexit-related programmes in conjunction with the Cabinet Office.

Timeline

  • 9th November – Sixth round of negotiations to begin.
  • 7th – 13th November – Parliamentary Recess.
  • 13th November – EU (Withdrawal) Bill returns to the Commons
  • 14th – 15th December – EU Council Summit
  • 22nd – 23rd March – EU Council Summit

 

 

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