Brexit Update 30th November 2017

By December 14, 2017 Brexit Updates

Top 3 developments  

  1. With broad agreement on the Brexit bill, focus shifts to the Irish border question ahead of the crunch-time EU Summit in mid-December.
  2. The row over the Brexit impact assessments is ongoing in Parliament, after David Davis handed over redacted versions to the Commons Brexit Committee.
  3. The Irish Government continue their threats to veto an early Brexit agreement unless key guarantees are met.

UK Update

Brexit bill agreement shifts focus to Irish border

The Irish border question has now become the biggest hurdle to EU leaders declaring that sufficient progress has been made in the Brexit negotiations, as Brussels has welcomed the Prime Minister’s revised offer, understood to be between £45-55bn. After securing political agreement amongst her Cabinet last week, Theresa May permitted her chief Brexit negotiator Olly Robbins to offer his EU counterparts an expanded formula for calculating the UK’s liabilities post-March 2019. However, the UK’s revised financial offer comes with significant strings attached. London is insisting that the offer is conditional on a final deal on future trading relations being agreed. Nonetheless, the offer has been “broadly welcomed” in Brussels, with Michel Barnier saying he expects agreement on the financial issue within days. Meanwhile, speaking from the Ivory Coast, Foreign Secretary Boris Johnson signalled his approval for May’s efforts to break the deadlock with the EU, saying, “now’s the time to get the ship off the rocks”. With solid progress being made at last, the pound reached its highest level in two months – reflecting optimism that talks will soon turn to the terms of future trade. With an agreement on citizens’ rights within touching distance, the biggest obstacle to “sufficient progress” looks set to be the Irish border question. The Irish government has said it wants firm guarantees on what kind of border controls there will be after Brexit, and is prepared to hold up the talks if necessary to get them.

Dublin is seeking guarantees that there will not be regulatory divergence, that “customs complications” and “customs divergence” will be avoided, that nothing will be done which might damage the Good Friday agreement, that the common travel area will continue, and that discussions over specific border issues will continue after phase one. In response the Prime Minister has vowed not to introduce any physical infrastructure on the border with the Republic, but has argued that the issue cannot be fully resolved until a UK-EU trade and customs agreement is decided in the second phase of the talks. Thus far in the negotiation process Dublin has enjoyed the full support of Brussels, which cites the Republic’s “unique” position with respect to Brexit. Some reports have emerged suggesting the Government has committed to “avoiding regulatory divergence” – one of Ireland’s key red lines. London is reportedly preparing to devolve powers to Norther Ireland to enable customs convergence with the Republic on areas such as agriculture and energy. Nonetheless, it currently looks unlikely that an agreement on the Irish border question will be reached before May meets Juncker next week – though it remains to be seen whether this will hamper a “sufficient progress” verdict at the all-important EU Summit in mid-December.

Brexit Secretary accused of contempt of Parliament over Brexit impact assessments

Brexit Secretary David Davis is facing accusations of being in contempt of Parliament after providing a Commons Brexit Committee with severely redacted versions of the long sought-after Brexit impact assessments. On Monday Davis finally handed over a single paper version of its 850-page assessment, which analyses the impact of Brexit on 58 industrial sectors. However, DExEU officials have already been through the document with a fine-tooth comb, and redacted anything it believes could be deemed “market sensitive” or potentially damaging to the UK’s negotiating position. The move has sparked outrage amongst the Committee and opposition MPs alike, with members claiming it should be up to them to decide what should and should not be redacted. Davis remains adamant that the information demanded by Parliament never actually existed in the first place – telling the Committee, “since the start of this process the Government has been clear there are not, nor have there ever been, a series of discrete impact assessments arising out of our analysis of the 58 sectors”. His comments come despite telling MPs last year that “we are in the midst of carrying out about 57 sets of analyses, each of which has implications for individual parts of 85 percent of the economy … Our 57 studies cover 85 percent of the economy — everything except sectors that are not affected by international trade”.

Meanwhile, Commons Speaker John Bercow has ordered Davis to appear in front of the Brexit Select Committee within days to confirm the process behind the Department’s actions, or face the prospect of being held in contempt of Parliament. The document has also been handed to the Lords Brexit Committee and the devolved administrations. The Committee has since confirmed that it will arrange for members to meet in private to view the document.

High street banks can withstand disorderly Brexit:

The Bank of England has said that High Street banks can withstand a hard Brexit, but has advised them to put aside an additional £6bn in funds by November next year to mitigate macroeconomic risks. Speaking on Tuesday, Bank of England Governor Mark Carney said, “in our judgment, banks are now resilient to the risks of a disorderly Brexit… The question is: what if something else were to happen at the same time?” The “something else” Carney referred to includes rapid expansion of consumer credit, global debt levels, asset valuations or misconduct costs. Carney added that a disorderly Brexit is “unlikely”, as both the UK and Brussels recognise that it would be in neither side’s interests for the UK to leave the Union without a transition deal, saying “our predisposition is to expect we will continue to have a highly cooperative relationship with Europe”. Carney also said that Brexit is an opportunity for the UK’s banking system to rid itself of the burden of excessive EU red tape. In particular, Carney pointed to the EU’s bonus cap, which the Bank of England has long opposed.

PM denies UK is ill-equipped for Brexit

Responding to accusations made by former International Development Secretary Priti Patel, the Prime Minister has denied that the UK is ill-equipped for Brexit. Speaking during her three-day tour of the Middle East, May said the £700 million already put into preparations for Brexit and £3 billion put aside in the budget last week constitutes “preparation for all eventualities”. She added, “we’ve done a lot of preparatory work for the Brexit talks and of course that work continues as the negotiations take place”.

Scots ask the ECJ to stop Brexit

A group of four Scottish pro-Remain MSPs and MEPs is seeking to ask the European Court of Justice if the UK can unilaterally challenge Brexit. The case would rest on whether Article 50 can be revoked by the UK on its own if voters or the Commons decide the final Brexit deal is unacceptable. Scottish Labour MEP David Martin, SNP MEP Alyn Smith, and Andy Wightman and Ross Greer, both Green MSPs at Holyrood, have launched a crowdfunding campaign to raise £50,000 to fund the legal action.

Abbott confuses Labour party Brexit policy

Shadow Home Secretary Diane Abbott has contradicted her party’s Brexit policy in letters to her constituents. The Hackney North and Stoke Newington MP said she would argue in favour of a referendum on the final Brexit deal, even though the Labour party has specifically ruled that out. In a letter to constituents, Abbott said, “I will argue for the right of the electorate to vote on any deal that is finally agreed”. In response Abbott has said “there is no difference at all between my position and official Labour party policy”, and blames the misunderstanding on “poor wording”.

European Update

UK to leave Europol

Michel Barnier has said the UK will no longer retain membership of the cross-border law enforcement agencies Europol and the European Defence Agency, once it leaves the bloc. Speaking at the Berlin Security Conference on Wednesday, the EU’s chief negotiator said the UK will not be able to continue participating in the EU’s powerful ambassador-level political and security committee (PSC) – meaning London will lose all decision-making powers in relation to EU foreign policy. Barnier added that this outcome is “the logical consequence of the sovereign choice made by the British”. However, London and Brussels are both in agreement that the UK’s departure will not affect NATO cooperation, or the UK’s bilateral cooperation with the remaining EU member states.

In the same speech, Barnier also irritated Downing Street by claiming that the UK’s vote to leave the EU is linked with turning its back on the EU solidarity in fighting the battle against Daesh. Barnier said, “never had the need to be together, to protect ourselves together, to act together been so strong, so manifest. Yet rather than stay shoulder to shoulder with the union, the British chose to be on their own again”. Barnier’s remarks have been widely criticised as “ill-informed and graceless” – particularly in light of the fact that May has been clear on her ongoing commitment to cooperating with the EU and sharing information. Barnier’s comments seemed particularly ironic considering that the Prime Minister was visiting Iraq that day to highlight the UK’s leading role in tackling extremism.

Ireland continues threat of veto

For a third week in a row, the Irish Government has threatened to use its veto to frustrate Brexit talks. Speaking to the Observer, the Republic’s EU Commissioner Phil Hogan said Dublin will “play tough to the end” over the border question. Hogan went on to castigate the UK Government for what he called their “blind faith” about securing a comprehensive post-Brexit free trade deal, adding that it is a “very simple fact if the UK or Northern Ireland remained in the EU Customs Union, or better still the single market, there would be no border issue”. Yet, the Republic’s threats seem not to have reached Liam Fox’s ears. Apparently disregarding the Republic’s concerns, the Trade Secretary insisted this weekend that that the border issue can be settled only as part of a UK-EU agreement on the future terms of trade. Meanwhile, Irish Taoiseach Leo Varadkar has been somewhat more optimistic, claiming that Ireland is unlikely to need to use its veto in any case, because the European Council will “operate by consensus”.

Verhofstadt fears for EU citizens’ rights

European Parliament Brexit chief Guy Verhofstadt has said his main concern in the negotiations is the issue of citizens’ rights – which he fears will not be resolved in the coming weeks. Speaking to the German press in Berlin earlier this week, Verhofstadt said, “my concern is that citizens’ rights are not being well-managed”. He went on to reiterate that the Parliament would veto any attempt to dilute citizens’ rights in order to secure a financial deal. In particular, he expressed fears that European citizens living the UK will be forced to endure a lengthy bureaucratic residency process. He also lamented the lack of clarity on what rights family members of Europeans living in the UK. would enjoy – which has been identified as one of the European Parliament’s red lines for the talks.

Timeline

  • 1st December – EU diplomats meet to assess Britain’s financial settlement proposal.
  • 4th December – Fourth day of EU (Withdrawal) Bill Committee Stage.
  • 4th December – Prime Minister to meet with Jean-Claude Juncker for Brexit Dinner.
  • 6th December – EU ambassadors begin preparations for EU Council Summit.
  • 11th December – National special envoys gather to discuss detailed responses to the UK’s offer.
  • 12th December – European General Affairs council confirm ambassadors’ and envoys’ responses.
  • 14th – 15th December – EU Council Summit.
  • 17th December – Christmas recess begins.
  • 5th January – Christmas recess ends.
  • 22nd – 23rd March – EU Council Summit

 

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