Brexit News for Monday 31 July

Brexit News for Monday 31 July
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Tensions flare in Cabinet over post-Brexit free movement…

Senior Conservative MPs are urging members of Theresa May’s cabinet to stop publicly setting out their demands for a transitional deal on Brexit, saying the move could make negotiations with the European Union more difficult. Iain Duncan Smith, former Conservative leader and key Brexit supporter, added: “Conservative backbenchers now wish cabinet members would practise what some are preaching and that they ‘transition’ from saying too much about Europe to saying nothing at all. This is a transition that should last up to two years.” – Guardian

  • Cabinet unity on Brexit, please – Telegraph view

…as Philip Hammond seeks ‘off-the-shelf’ Brexit transition…

Chancellor Philip Hammond has told business leaders he wants to negotiate a simple “off-the-shelf” transition deal with Brussels to maintain current trading relations with Europe for at least two years after Brexit. Mr Hammond said he wants a “standstill” transition leaving companies with full access to the single market and customs union, followed by a further “implementation phase” while a new, UK-specific trade accord is put in place. The chancellor believes it would be a waste of time and political capital trying to persuade the EU to adopt a new legal framework for an interim agreement, according to government officials and business people who have discussed the idea with him in recent days. – FT (£)

…while suggesting their is a Cabinet consensus behind a transitional deal…

Speaking on BBC Radio 4’s Today programme, the chancellor conceded that “many things will look similar” the day after Brexit officially takes place in March 2019. A three-year transitional period would have to be agreed by the rest of the EU, and only after that would the UK have a completely new immigration system, its own trade deal with the EU, and be able to strike trade deals with other countries. – Guardian

…and that we might not be able to sign new trade deals until 2022…

He said that a transitional deal with the bloc could last for up to three years and that interim arrangements would likely mean the UK would be unable to sign any new trade deals until after 2022… Mr Hammond’s comments relating to the UK’s inability to strike new trade deals will likely come as a blow to Brexiteers who want to use withdrawal to boost Britain’s trading relations with the rest of the world… “The important point is that we are able to get started on that process and during a transition period when we would hope to have continued access to the European market it may be that during that period we don’t bring those new agreements into force”. – Telegraph (£)

  • Boris Johnson’s ally attacks Philip Hammond’s plan which could see thousands of EU citizens move to Britain after Brexit – Telegraph

…while Amber Rudd vows no post-Brexit ‘cliff edge’ on migration…

Amber Rudd has assured migrants and businesses there will be no “cliff edge” on the UK’s immigration system on the day it quits the EU. The Home Secretary made the comments after her junior Brandon Lewis made the surprise announcement that free movement would officially end on the day the UK quits the EU in March 2019. She said EU nationals will instead go through a “registration and documentation” process if they want to come to the UK under its transitional post-Brexit immigration arrangements. – PoliticsHome

…but Liam Fox denies Cabinet has agreed an immigration stance during a post-Brexit transition…

The international trade secretary, Liam Fox, has caused a fresh cabinet rift over immigration by insisting that the continuation of free movement after 2019 would “not keep faith” with the referendum result. In an interview with The Sunday Times, Fox dismissed claims that the cabinet had reached a consensus that free movement of people for up to three years after Britain leaves the EU will be part of a Brexit transition deal. “If there have been discussions on that, I have not been party to them,” he said. “I have not been involved in any discussion on that, nor have I signified my agreement to anything like that.” – Sunday Times (£)

…while Philip Hammond’s allies accuse Liam Fox of ‘living in fantasy-land’

Philip Hammond’s allies have accused Liam Fox of living in “fantasy land” after he warned that continued free movement will “not keep faith” with the vote to leave the EU. The International Trade Secretary this weekend denied that the Cabinet has reached a consensus that free movement of people will continue for up to three years after Brexit. – Telegraph (£)

We won’t be a tax haven after Brexit, says Hammond

Britain will not slash taxes and regulations after Brexit to undercut European rivals, Philip Hammond has said. In a marked softening of tone, the chancellor said that Britain’s social, economic and cultural model would remain “recognisably European” after it left the EU. The comments to a French newspaper appear to rule out Britain reinventing itself as a Singapore-style corporate tax haven to attract global businesses. Such an idea was floated by Mr Hammond in January as a proposed response to other EU nations blocking access to the single market. – Times (£)

EU threaten to suspend Brexit trade talks unless Britain pays its divorce bill…

Europe has warned that the next phase of Brexit negotiations will be delayed for two months because of the UK’s refusal to engage with Brussels on the so-called ‘Brexit divorce bill’, The Telegraph can reveal. Michel Barnier, the EU’s chief Brexit negotiator, made the warning in a private meeting with EU ambassadors in Brussels, according to an account of the meeting obtained by The Telegraph. – Telegraph

…but David Davis plays down talk of delays

Brexit Secretary David Davis is confident negotiations will continue as planned after reports that Brussels may delay trade talks because of a lack of progress on the “divorce” settlement… A spokesman for the Department for Exiting the EU said: “As the secretary of state said, it is important that both sides demonstrate a dynamic and flexible approach to these negotiations. Government officials are working at pace and we are confident we will have made sufficient progress by October to advance the talks to the next phase.” – BBC

  • Both sides want to speed up Brexit talks by meeting more frequently – Politico

The Irish Government want a sea border with UK after Brexit…

Leo Varadkar, the Republic of Ireland’s prime minister, is pushing for the Irish Sea to become the post-Brexit border with the UK after warning Mrs May that her plan was doomed and would jeopardise the peace process. British officials were said to be taken aback by Dublin’s change in tone, expressed at a European Union summit in Brussels last week. The British government had proposed using technology such as surveillance cameras to allow continued free trade between the north and south of the island. Dublin called on British ministers to come up with new ideas that guaranteed absolute freedom of movement of goods and people across Ireland, irrespective of any wider Brexit deal. – The Times (£)

…but the DUP say No

Sir Jeffrey Donaldson, a senior Democratic Unionist MP, said there was “no way” his party would sign off on the plan amid concerns that it would create a barrier between Northern Ireland and the rest of the UK. The DUP’s opposition to the sea border proposal could spell a headache for Theresa May as she seeks to hammer out a Brexit deal with her minority Government reliant on the party’s MPs to pass laws in the House of Commons. – Telegraph

Liam Fox wags his tail at US trade talks after Brexit

Liam Fox left Washington fizzing with excitement. Donald Trump had hailed the first round of talks on a “big and exciting” trade deal with Brexit Britain. “It’s going really well,” the international trade secretary gushed. “They so want to help us make a success of Brexit.” The high point of Fox’s visit last week was an impromptu meeting with Vice-President Mike Pence and the first gathering of the UK-US trade and investment working group. Not even a transatlantic row with cabinet colleague Michael Gove over the import of chlorine-washed chickens could ruffle his feathers. – Sunday Times (£)

EU offer £2 billion ‘bribe’ of free travel to students

Profligate EU chiefs plan to blow £2billion a year bribing young people with free rail travel around Europe as Britain negotiates a multibillion pound Brexit divorce bill. The European Parliament is preparing to give a free InterRail pass to everyone when they turn 18 for railway lines in 30 countries, including Swiss Alps and Norwegian fjords. The idea was proposed a year ago but an EU Budgetary Committee report last month called on the EU Commission to approve it. – Sunday Express

Labour can stop Brexit – but only with fresh vote, says Sadiq Khan

Sadiq Khan has set out the possibility of Britain remaining within the EU, arguing that Brexit could be legitimately stopped if the Labour party included the pledge in an election manifesto or committed to a second referendum. In a considered and powerful intervention that could raise the hopes of remain supporters, the London mayor described himself as “an optimist” about the possibility of the UK staying part of the European Union. But he said it was only possible to “trump the referendum” of 2016 in which 52% opted to leave the EU with a fresh, democratic vote, which could be delivered through the next general election or a national vote on the final Brexit deal. – Observer

  • Brexit could prompt Welsh-UK Labour split, says senior Welsh Labour figure – BBC News
  • Sadiq Khan tells EU ambassadors that he hopes that the “EU flag would stay flying outside City Hall forever” – IBTimes

Calls to protect Scotch whisky from inferior US knock-offs in wake of chlorinated chicken row

Scotch whisky could become the next big issue in post-Brexit trade deals after the row over chlorinated chicken, it emerged today. The Scottish Government is calling for whisky to be given official protection amid fears that the US could press for relaxed labelling rules. – The Sun on Sunday

Boris Johnson denies claim by Vince Cable he could quit over Brexit

Boris Johnson has accused Sir Vince Cable of “peddling lies” after the Liberal Democrat leader claimed he is poised to stand down as Foreign Secretary over Brexit. – Telegraph

Gerard Lyons: Many of the ‘risks’ being highlighted about Brexit are perceived risks, not real risks

Our transition should be fixed and two years works well. I fully support Brexit and have always thought a transition makes sense… It is important that in the transition we do not agree to an existing arrangement, suitable for smaller economies, but not for us, the fifth biggest economy in the world. The deal needs to be bespoke. Because we are a member of the EU we have complete regulatory alignment with the EU now. Given that starting position it should be easy to agree a trade or other arrangement. – Gerard Lyons for the Telegraph (£)

  • Brexit must be cue for policies that make most of Britain’s new normal – Gerard Lyons for The Times (£)

Kathy Gyngell: There is plenty of good Brexit news, we’re just ignoring it

When Brexit good news does crack the surface it is routinely skewed too. “Despite Brexit” reporting is an editorial technique that particular newspapers excel at. Should the UK’s economy prove “resilient”, it is despite, never because of, Brexit. If ever there was a case of cognitive dissonance it’s this method of rationalising every failed gloomy prediction. Yet there was good news from the start. – Kathy Gyngell for The i

Brian Monteith: Trade the immoral Customs Union for fruitful deals that benefit the developing world

Both millennial liberal progressives and out-and-out lefties are at last awakening to the fact that the Customs Union exports poverty to Africa and the rest of the developing world. It does this by erecting punitive tariff barriers that discourage trade and ensure penury for agricultural workers, from South Africa to Morocco. The EU has increased its number of Customs Union tariffs by 1,494, to 12,691 since 2009, and last year raised its tariff on importing oranges fivefold from 3.2 per cent to 16 per cent – specifically to protect Spanish fruit by pricing out of the market South African oranges, first taken to the Cape by the Dutch back in 1654. – Brian Monteith for City A.M.

Jeremy Warner: Jeremy Corbyn is a more genuine Brexiteer than Theresa May, but it might sink his next campaign

Labour’s attitude to Europe has always been an ambivalent and divided one. Today we think of euroscepticism as essentially a Tory phenomenon, but this was by no means always true. Euroscepticism was once the preserve of the Labour Party – brilliantly articulated in terms that still resonate today by the then Labour leader Hugh Gaitskell in his speech to the Labour Party conference on 1962. The European Economic Community, he said, was essentially a federalist idea that would “mean the end of Britain as an independent European state… the end of a thousand years of history”… Mr Corbyn is one of a small group of Labour backbenchers who stayed loyal to these Eurosceptic principles through the rampant Europeanism of the Blair years. – Jeremy Warner for the Telegraph (£)

Bill Carmichael: It’s time the ‘despite Brexit’ crowd shut up

Perhaps the two most over-used words in the English language so far in 2017 are “despite Brexit”. Demoralised Remainers have taken to this little phrase in a desperate attempt to explain why their confident predictions of total economic collapse, genocide and the outbreak of World War Three if we voted to leave the EU have not in fact come to pass. Instead, since the referendum result last summer the UK has been cheered by wave after wave of fantastically positive economic news – but each verse of glad tidings is accompanied by the bleating Remoaner chorus of “despite Brexit”. – Bill Carmichael in the Yorkshire Post

Andrew Lilico: Stop talking about “betrayal” – a phased withdrawal from the EU has always been the plan

The position of Leave campaigners during the referendum and of the May government since has been that there should be a phased process of withdrawal. The idea that we should have such a phased, time-limited transition process now is not some kind of “betrayal” or “defeat by the crafty EU negotiators” or “surrender to the Soft Brexiteers” (whatever Nigel Farage, in unholy alliance with die-hard Remainers, might say). It is what was always the plan and always manifestly in the interests of both sides. – Andrew Lilico for Reaction

George Eaton: The Brexiteers have lost battles but they are still set to win the war

There is no parliamentary majority for a second referendum (with the pro-Remain Liberal Democrats still enfeebled), Hammond has conceded that any transitional arrangement would end by June 2022 (the scheduled date of the next election) and most MPs are prepared to accept single market withdrawal. The prospect of Britain avoiding Brexit, or even a “hard” version, remains doubtful. – George Eaton for the New Statesman

Frank Field: Theresa May urgently needs to form a cross-party Brexit Cabinet

When Winston Churchill ascended to the premiership he made winning the war the purpose of government. He refashioned the Whitehall machine to achieve this objective by imposing a War Cabinet to sit in constant session to drive the road to victory. We need a similar drive for victory in our Brexit negotiations… She needs to create a Brexit cabinet, to offer seats to opposition parties, and to spend time chairing that cabinet and leading our negotiations… A rethink of how successfully to achieve Brexit is urgent. – Frank Field MP for The Times (£)

Independent: Only Theresa May can end the confusion over the Cabinet’s approach to Brexit

Just when it seemed that a consensus was emerging in the Cabinet over what Brexit really might mean, Liam Fox has characteristically popped up to show that the truce is fragile at best, and non-existent at worst. The International Trade Secretary, a Brexiteer, dismissed the idea that the Government has agreed free movement will continue in all but name for up to three years when the UK formally leaves the EU in March 2019. This was suggested last week by Philip Hammond, the Chancellor, and Amber Rudd, the Home Secretary, who backed Remain last year and who are now trying to ensure that the hard Brexit planned by Theresa May does not inflict economic self-harm. – Independent editorial

Henry Newman: There will be a Brexit transition period – but it is unlikely to be via the EEA or EFTA

It has become clear that the Cabinet has reached broad agreement that the UK will transition out of the European Union. Although the Prime Minister and other ministers had left the door open before to “phasing” or “implementation periods” for elements of Brexit, the Government is now advocating a period of much greater wholesale continuity after we formally leave the EU. The Chancellor is suggesting a transition period of up to three years between March 2019 (the end of the Article 50 process) and June 2022 (by when the next General Election must be held). – Henry Newman for ConservativeHome

John Harris: Brexit has already split the UK; now it risks tearing Labour apart

As has been clear for a very long time – 40 years, or thereabouts – Jeremy Corbyn and John McDonnell are instinctive Eurosceptics, whose half-hearted campaigning in the 2016 referendum was a matter of realpolitik rather than conviction, and who have now found their voice. For them, one referendum is enough, and the result is sacrosanct. But that is only half the story. More than anything, they see in the Brexit moment a chance to slip free of the supposedly stifling limitations Europe places on the economic activities of the state. – John Harris for the Guardian

Brexit comment in brief

  • Deal or no deal on Brexit is not a choice between triumph and disaster – Mark Littlewood for the Times (£)
  • Access to cheap American produce will benefit Britons – Tim Newark for the Express
  • Brexit may take time, but it must not take for ever – Dia Chakravarty for the Telegraph (£)
  • Remoaners hate the fact that the economy is performing well – Leo McKinstry for the Express
  • The EU is struggling to compromise over Brexit as it doesn’t actually know what it wants out of it – Stephen Booth for the Telegraph (£)
  • Ireland may fancy its chances outside the EU – Liam Halligan for the Telegraph (£)
  • Labour are constantly shifting their Brexit stance depending on the winds of public opinion – Charlie Cooper for Politico
  • We must disentangle Britain from EU quangos – Tim Philpott for ConservativeHome
  • Leadership is needed to win Battle of Brexit – Bill Jamieson for the Scotsman
  • Britain has beaten Continental bullies before – Alexander Fiuza of Get Britain Out
  • Local Government Association asks Treasury to replace lost EU regeneration funds for councils post-Brexit – Guardian
  • Jeremy Corbyn is not ruling out post-Brexit single market membership, says Diane Abbott – PoliticsHome
  • EU Commissioner Hogan: UK approach to Brexit talks ‘beggars belief’ – Politico
  • Maltese PM: ‘I believe Britain will stay in EU’ – PoliticsHome
  • Luxembourg PM tells UK: We want our money back – PoliticsHome