Brexit Update 9th November 2017

By November 23, 2017 Brexit Updates

Top 3 developments  

  1. Sixth round of Brexit talks began in wake of shambolic week for Prime Minister.
  2. Government publishes new Trade Bill and reveals plans for upcoming Customs Bill.
  3. Government delays release of Brexit economic impact assessments by three weeks.

UK Update

Could Prexit ruin Brexit?

The Prime Minister’s political future has become a subject of open speculation in Brussels, after another disastrous week in which Priti Patel was forced to resign as ex-International Development Secretary. Senior EU officials are questioning whether May – and even her ailing Government – will still be in office in early 2018. Brussels is understood to be preparing for every possible Brexit outcome – even the most extreme – as May’s Government spirals further into crisis; these include preparing responses to May’s departure, another General Election, a no-deal Brexit, and a reversal of the referendum decision. Brussels’ contingency planning makes plain that its faith in the British Prime Minister is diminishing further every day.

Government introduces new Trade Bill

The Government has laid before Parliament a new Trade Bill, which will give Ministers the power to strike independent international trade deals for the first time in forty years. The Bill, which still needs to pass through the legislative process before it can be enforced, would create powers to “assist in the transition of over 40 existing trade agreements between the EU and other countries”. In other words, it will translate into domestic law more than 40 existing free trade deals the UK currently has as an EU member, which will help create continuity on the first day of Brexit. The legislation will also create a new independent body called the Trade Remedies Authority, which will be responsible for defending UK businesses against unfair trade practices. The Bill also seeks to ensure that UK firms can continue to access £1.3 trillion worth of foreign government contracts post-Brexit.

Announcing the Trade Bill, the Department for International Trade also said a new Customs Bill will enter Parliament “shortly”. Resolutions for the Customs Bill show that it will allow the Government to create “a standalone customs regime and amend the VAT and excise regimes”. It will, further, “maintain a functioning movement of goods from the day we leave the EU by continuing the VAT and excise regimes in line with the final deal reached in negotiations”.

Ministers delay release of Brexit economic impact assessments

The Government has said it will take “no more than three weeks” to publish a long-awaited series of Brexit economic impact assessments, after Commons Speaker John Bercow ordered the Government to publish them immediately. Brexit Minister Steve Baker said his department needs more time to “collate” the information. The Government has since been accused of a “cover up” by Labour, who also accuse the Brexit Secretary of being in contempt of Parliament. Labour’s Hillary Benn has said the documents should be handed (unredacted) to the Committee for Exiting the EU without delay, and it “should be for the committee to decide in what form they are published”.

On Monday Bercow gave the Government until Tuesday evening to publish the Brexit economic impact assessments. Bercow added that, if the documents are not released, “I expect ministers to explain to the house… why they have not and when they intend to do so”. The Speaker’s intervention came after Davis sought to lower expectations about what the official reports contain. In a letter to Benn, Davis said the reports ranged from “very high level overarching” work, to detailed analysis of “certain product lines in specific sectors”. He added, “it is not, nor has it ever been, a series of discrete impact assessments examining the quantitative impact of Brexit on these sectors”.

House of Commons recommends new Brexit sifting committee

The Commons Procedure Committee has this week recommended that Parliament introduces a new committee to review which EU legislation should be transferred into UK domestic law. The Committee recommended a new “sifting committee” after concluding that the current proposals for Parliamentary scrutiny are “inadequate”. Under the Government’s current plans, Theresa May’s ministers would decide which aspects of EU law should be scrutinised by MPs as it is transferred into UK law. The proposed new committee would have the power to recommend the withdrawal or redrafting of secondary legislation – which allow Acts to be brought into force or altered without full Parliamentary scrutiny.

Senior Judge warns against dragging judiciary into Brexit

Lord Neuberger, the recently-retired Supreme Court judge, has criticised the Government’s European Union (Withdrawal) Bill. Neuberger said a clause of the bill, as currently worded, would allow judges to take into account EU decisions post-Brexit “if it considers it appropriate to do so”. He told the House of Lords Constitution Committee that this wording could lead to judges having to take into account economic or political factors when making their decisions. He went on to tell the committee that judges were “not naturally the people to take into account”. Neuberger said that Parliament should provide more precise guidance on the extent to which judges could and should take such factors into account.

NHS chief wades in on Brexit Bus row

The Chief Executive of NHS England, Simon Stevens, has said that the Brexit campaign’s pledge that the UK’s exit from the EU would result in more money for the NHS, should be honoured. Speaking at the NHS Providers conference in Birmingham, Stevens said that peoples’ trust in democracy “will not be strengthened” if the Government does not promise extra cash for the NHS in this month’s budget.

Corbyn pressures May at CBI

Jeremy Corbyn has told Theresa May she must agree a Brexit transition deal “immediately” to end uncertainty for businesses. Speaking to the Confederation of British Industry (CBI), Corbyn said “let me be clear: to delay a transition deal until a final deal is agreed as the Prime Minister says she wants to do, is simply not good enough. The prospect of sudden changes in the legal and regulatory environment in which people do business is affecting… decisions right now”. CBI president Paul Drechsler said about 10% of businesses had “started to reallocate employees, to re-plan their investments… by the end of the year that will be 25% and by March 60% of all firms will have made big decisions, which are their contingency plans to prepare for the unknown”.

European Update

Sixth round of Brexit talks begin

The sixth round of Brexit negotiations have begun today. Unusually, the talks are set to take place without the chief negotiators – Michel Barnier and David Davis. Instead, the two will meet on Friday, at the end of the two day session. As short as this round of talks may be, both sides have been keen to emphasise that Davis and Barnier’s deputies – Olly Robbins and Sabine Weyand – are in near-constant contact in-between talks.

Senior officials in Brussels are said to have given the UK Government two to three weeks to set out how much it is prepared to pay in the Brexit divorce settlement. Brussels has made it clear that, should the UK be unable to further clarify how many of its financial commitments will be met, the EU will struggle to prepare this year for a transition deal. The Government is reported to have privately indicated to Brussels that it will offer more clarity on the financial commitments it intends to honour, on the condition that the EU will reciprocate and simultaneously agree the terms of a transition deal in December.

Meanwhile, the European Parliament has reiterated that the British Government’s claim that a deal on citizens’ rights is “within touching distance” is incorrect, and that the new streamlined application system for EU nationals seeking to stay in the UK is inadequate. The European Parliament’s Brexit steering group – chaired by Guy Verhofstadt – issued a statement ahead of the sixth round of talks, highlighting that there is a need for progress on more than just the divorce bill. The group also highlighted concerns that the UK is back-pedalling on family reunification and export of benefits.

EU27 begin discussing Brexit Phase II

The EU27 leaders have begun preparing their positions on phase two of Brexit this week. Ambassadors of each of the 27 capitals met in Brussels on Wednesday for private talks on post-Brexit trade and transition issues. The group were briefed by Barnier’s team, before the “mood and opinion” of the group was gauged. Next week the EU’s Article 50 Taskforce will meet and begin to put together detailed positions. However, France and Germany look set to drive a hard bargain for the UK, insisting that progressing to phase two in December should not be “automatic”. This has been reflected in a leaked EU calendar – compiled by Michel Barnier – which makes clear that London should not count on talks proceeding automatically to the second phase of talks by year’s end. Merkel and Macron are pushing for two sets of draft conclusions for December’s summit – one for and against a “sufficient progress” outcome. As a result of Berlin and Paris’ insistence, Barnier is said to be “under a bit of pressure” to ensure discussions do not develop beyond the initial withdrawal issues. The leaked calendar also reveals that no date has been set for the seventh round of talks, after it was revealed two weeks ago that the British Government are dragging their heels over arranging the negotiation session.

David Davis tours European capitals

David Davis has been criss-crossing Europe this week as part of the Government’s charm offensive with the EU27 leaders, in an attempt to influence the internal talks on post-Brexit trade and transition deals. On Tuesday he held talks with Italy’s Europe Minister Sandro Gozi in Rome. Whilst Gozi welcomed Davis’ dialogue, he criticised the Brexit Secretary’s inability to offer the EU anything new, saying, “he didn’t tell me anything specifically new on the financial aspects… I told David Davis the next negotiation round will be very important, notably on the financial obligations”. Following his meeting with Gozi, Davis visited officials working on Operation Sophia – the EU’s mission rescuing migrants in the Mediterranean. The Brexit Secretary was quick to point out that a third of migrants helped were picked up “using UK assets”. Though Davis’ strategy was not very subtle, it sought to remind EU leaders that the UK supplies a useful military and effective intelligence services. On Wednesday Davis met with Konrad Szmański – Poland’s Minister for European Affairs – but received a similarly glum message. After the meeting Szmański told the press, “we don’t see a significant progress in talks concerning the financial obligations of the UK, as both sides have different political assumptions on this”.

Ireland calls for five-year transition period

Irish Foreign Minister Simon Coveney has called for a transition period of up to five years after the UK leaves the EU in March 2019. Coveney said it is “not realistic” to agree a fully fledged UK-EU free-trade deal within the next year – despite the Prime Minister’s commitment to do exactly that. In a sign of Dublin’s growing concern that Brexit could inflict collateral damage on the Irish Republic, Coveney said, “Brexit is not something we should be playing a game of chicken on in terms of making unrealistic demands… We should not be setting transition periods to meet some kind of political electoral cycle. The businesses that are going to have to survive through that transition will also need time”.

Timeline

  • 7th – 13th November – Parliamentary Recess.
  • 13th November – European (Withdrawal) Bill returns to the Commons.
  • 14th December – EU Council Summit.