Brexit Update 4th January 2019

By January 18, 2019 Brexit Updates

Top 3 Developments 

·         Brexiteers push for a no deal

·         Labour members call for a second referendum

·         Chris Grayling’s freight-ful mistake

Brexiteers push for a no deal

David Davis, the former Brexit secretary, has used his column in The Telegraph this week to campaign for a no deal Brexit. He argues that the more the UK prepares for a no-deal the more likely a better deal with extra concessions becomes, due to the growing fear from EU27 leaders. He also argues that leaving the EU without a deal does not mean that no arrangements will be in place for the UK’s exit, citing existing WTO agreements and the Common Transit Convention.

Additionally, a YouGov poll published today has revealed support for this sentiment amongst Conservative Party members, with 63% of members stating that they would be happy with no-deal, making the Prime Minister’s task of convincing Conservative MPs to vote for the deal all the more difficult.

Deal or same deal?

Theresa May has spent most of the Christmas period attempting to gain concessions over the Irish backstop. Several Whitehall sources have suggested that EU27 leaders will give reassurances that the backstop is intended “only for a short period of time” but are refraining from making a more legally significant statement until the outcome of the meaningful vote is known. This is unlikely to reassure wavering MPs before the vote and the Prime Minister has been urged to delay the vote for a second time after reports that Government whips have failed to persuade enough MPs to support it. A senior Brexiteer source said that “nothing has changed. Whips have been trying to contact people over the Christmas break but no-one is changing their minds about this deal because the deal itself remains the same.”

The next week will consist of an accelerated campaign with May inviting every Tory MP to Downing Street for drinks parties taking place on Monday and Wednesday, in the hope that she can win over those who doubt her Brexit deal. Sammy Wilson, the DUP’s Brexit spokesman, and Nigel Dodds, the party’s leader in Westminster, have already met the Prime Minister for lunch this week, however little progress seems to have been made with Dodds reiterating the DUP’s objections to the deal.

Labour members call for a second referendum 

A YouGov poll for Queen Mary University and Sussex University shows 72% of Labour Party members support a second referendum on the UK’s membership of the EU, putting them at odds with their leader Jeremy Corbyn. The leadership instead wants to trigger a general election if Theresa May’s deal fails to pass the Commons, with a motion agreed at Labour conference in September declaring that a second referendum is one of the options available should that fail. Tim Bale, politics professor at Queen Mary University, points out that if Corbyn “genuinely believes, as he has repeatedly claimed, that the Labour Party’s policy should reflect the wishes of its members rather than just its leaders, then he arguably has a funny way of showing it – at least when it comes to Brexit.”

It is unlikely that Jeremy Corbyn will call for a second referendum should the Withdrawal Agreement fail to get through Parliament. Len McCluskey, the general secretary of Unite trade union, has told Labour MPs that if the party chose to back another vote it could be seen as a “betrayal”.

Chris Grayling’s freight-ful mistake? 

The Transport Secretary, Chris Grayling, has come under criticism recently for awarding a company with no experience in running a ferry service a contract to operate ferries in the event of a no-deal Brexit. Seaborne Freight, was awarded a £13.8 million to operate a freight service between the ports of Ramsgate in the UK and Ostend in Belgium. The company so far does not own any ships nor has ever run any. However, Grayling defended his decision stating that he was supporting British business and that the company has been “looked at very carefully by a team of civil servants” who “reached a view they can deliver” by April.

EU Update

End of the Eurozone?

The Centre for Economic and Business Research has warned that growing instability in the eurozone would trigger a break-up of the currency bloc this year. BlackRock, the world’s largest asset manager, said that European equities have not priced in the risk of a recession and as a result, European corporate earnings “may be too optimistic given the political and growth risks”. This prediction has caused some UK politicians, such as David Davis, to believe that the EU would be willing to grant more concessions to the UK in order to receive the £39 billion ‘divorce bill’.

Ireland expands diplomatic footprint as Brexit looms

Ireland has started plans to expand its global stature with the imminent deadline of the Withdrawal Date approaching. The UK is Ireland’s biggest import partner and its second-largest export market after the US, exposing Dublin to the risk of severe economic fallout if Britain leaves the EU without a deal in March. Ireland has opened more than a dozen new missions in areas such as Latin America, India, Africa, the Middle East and New Zealand. Simon Coveney, Deputy Premier and Foreign Minister, stated that whilst Dublin is determined to work closely with London, after the UK’s exit from the EU, it is also committed to expansion and aims to have over 100 missions abroad.

Upcoming Key Dates

  • w/c 14th January: ‘Meaningful Vote’ on the UK/EU exit deal
  • 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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