Brexit Update 30th November 2018

By December 12, 2018 Brexit Updates

Top 3 developments  

  • May rules out Norway option as Plan B if deal fails
  • Economic Analysis shows high cost of Brexit remains
  • Donald Trump says UK-EU Agreement ‘good for the EU’

UK Update

Norway will that happen says May 

Theresa May has ruled out ‘the Norway option’ as a potential Plan B if her vote fails on the 11th December. It’s been reported that four ministers in May’s own cabinet are preparing to make the case for a Norway ‘plus’ option as a potential short-term solution, keeping the UK in the Single Market whilst leaving the Customs Union. Norway sets its own tariffs on goods imported from outside the Single Market, however, must accept the four fundamental principles of free movement of goods, services, people and money, something May has said “would not deliver what people voted for in the EU referendum”. It is also unclear how the issue of the backstop would be resolved in such circumstances as well, with many seeing the backstop as the main issue taking support away from May’s current deal.

May to debate Corbyn in Prime Time TV Slot

Theresa May and Jeremy Corbyn are set to go head to head in a TV debate around May’s Brexit deal once final preparations have been agreed with both parties. Current issues on finalising a date and time centre on the rival bids to host the debate from the BBC and ITV, with the BBC’s selected time on Sunday 9th December conflicting with I’m a Celebrity Get Me Out of Here!

May was widely criticised during the 2017 election when she refused to debate other UK political leaders. Whilst the Brexit head-to-head will be the first time the two leaders have gone up against each, other than in Parliament, May has ruled out others joining them, such as Brexiteers including Boris Johnson or Remainers from the People’s Vote campaign, saying “the UK has moved on from the Leave/Remain debate’.

Doubt over General Election pushes Labour to Second Vote

Labour Shadow Chancellor John McDonnell has said that if May’s deal failed, Labour would be calling for a general election, but that it would be “very difficult” to force the Government’s hand, making a second vote on Brexit almost inevitable. Asked whether he thought Brexit may still be given the go-ahead in any second vote, he said that it might, however it was very difficult at the moment. It is as yet unclear what side Labour would choose if a second vote did go ahead, with many believing a binary May’s Deal / Remain in the EU option possible given MP reluctance to back a no deal. This however would be controversial, leading to potential political fallout if the option was taken.

For a second referendum to be called, the Government of the day would have to legislate for it, gaining a simple majority in Parliament. Unlike a general election, the threshold is much lower, however this doesn’t detract from the issue facing MPs with a failed vote, general election, no deal, no Brexit and referendum all harbouring vocal opposition.

Economic analysis reaffirms cost of Brexit

Government and Bank of England economic reports released this week have reaffirmed that May’s deal would be better than leaving with no-deal but worse than remaining in the EU – as expected. The economic forecasts set out the potential impact of different types of Brexit, including a no-deal, May’s preferred Chequers Proposal, and the deal perceived to be tied into the political declaration. UK GDP is expected to be 3.75% lower over a 15-year period compared to remaining in the EU under May’s deal, with the UK foregoing an annual £100bn in its productive capability. Commenting on the forecasts, International Trade Secretary Liam Fox said that the forecasts did not account for the UK Government taking mitigated action in any scenario. Bank of England Governor, Mark Carney, meanwhile said that the UK could fall into recession in one of the scenarios being planned by the bank, however he stressed that ‘these are scenarios not forecasts’, illustrating what ‘could happen’ not what would necessarily happen.

Ball in UK’s court if deal voted down says EU

The EU is expected to await the UK’s next actions if the deal painstakingly agreed by the UK and EU is voted down, whilst reiterating that the 585-page withdrawal agreement cannot be reopened for further negotiation. German Chancellor Angela Merkel has said that the deal ‘balances the interest of both’ suggesting that the UK would fail to renegotiate, leaving MPs in a juxtaposition where they don’t want May’s deal but can’t agree on leaving with no deal or abandoning the whole Brexit process. If the issue is drawn out there is a likelihood that there may be a call for the UK to apply for an extension to the withdrawal process to resolve internal political issues ahead of any firm decisions. This may however come with certain conditions that could potentially make the option unpalatable, creating further confusion on what steps the Government and Parliament should take next.

May’s Deal ‘Great’ for EU, says Trump

If there’s one thing Theresa May probably doesn’t appreciate in the lead up to the ‘meaningful vote’ on her Brexit deal on 11th December, it’s the leader of the world’s biggest economy saying her deal ‘sounds like a great deal for the EU’. Donald Trump said just that when questioned, whilst also saying that the US would have to “look seriously at whether or not the UK is allowed to trade”. The President was of course referring to the possible backstop that would keep the UK in a customs union with the EU, and thus bound by the EU’s Common External Tariff on imports.

Brexiteers have regularly sought to advance the need to strike a more comprehensive trade deal with the US and are likely to seize upon the element of doubt in the US as a reason for MP’s to vote down the deal in the hope of pushing additional concessions on the backstop. May will be hoping other world leaders are more supportive of her deal in the ensuing weeks ahead.

EU Update

Tusk Sides with May on Cost of Voting Deal Down

EU Council President Donald Tusk has repeated the options facing MPs who choose to vote down Theresa May’s Brexit deal on the 11th May. Speaking at the G20 Summit in Argentina, Tusk said a lost vote would herald either ‘no deal’ or ‘no Brexit’ and that the EU was ready for ‘all outcomes’. The level of division in the House of Commons is expected to return a vote against the deal unless opposition MPs opt to vote for May’s deal. 80-100 Conservative MP’s are predicted to vote against the deal after publicly stating they will do so. May however is unrelenting and has called upon Brexiteer Ministers to make the case for the deal, saying a failed vote would “tear Britain apart”. Once, and if, the deal passes the UK Parliament it is expected to be voted through by the EU Parliament early next year before being ratified.

Call to limit free movement from Romanian Finance Minister

Romania’s finance minister, Eugen Teodorovici, has sparked uproar in the EU after suggesting that the country should curb the right of its citizens to work elsewhere in the EU. A European Commission spokesman reiterated that free movement was a ‘fundamental right of the European Union’ and one of the rights ‘Europeans appreciate the most’ according to studies. Teodorovici suggested that permits for Romanian citizens to work outside the country should be limited to five years to stop the country losing out economically, saying that someone who went to work in Germany had “little likelihood of returning to Romania”, with him defending his comments considering ‘Romania’s acute labour crisis and the issue should be discussed. The comments were followed by Romania’s Health Minister calling for Romanian junior doctors to remain in the country to address the countries lack of medics.

Upcoming Key Dates

  • 11th December: Meaningful Vote on Brexit Deal
  • 13th December: EU Council Summit
  • January 2019: Possible start of debate on legislation to bring EU deal into UK law.
  • 29th March 2019: UK planned exit from the European Union
  • 30th March 2019: UK planned transition period.
  • 31st December 2020: UK planned exit from the transition agreement.

 

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