Brexit News for Tuesday 13 February

Brexit News for Tuesday 13 February
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Britain finally set to be free from Brussels on New Year’s Eve 2020 – three months early

The PM used her big speech in Florence last September to suggest at phased withdrawal of “around two years” to allow business time to adjust after Brexit. But the EU’s negotiating chief Michel Barnier has said it should cut off on 31 December 2020 – one year and nine months after exit day on 31 March 2019. Now the Government are gearing up to accept the exit timetabling suggested by Brussels rather than London. A Whitehall source directly involved with the UK’s exit planning told The Sun: “The EU timetable is the working assumption and no one seems too upset by that.” …By leaving on the cusp of 2021, rather than in March of that year as originally suggested, the UK will avoid being dragged into another seven year budget cycle. The EU finances are set every seven years, with the next spending plan due to start in 2021… Last night the news of a shorter exit period delighted Brexiteers. Iain Duncan Smith told The Sun: “The sooner we can get this done, the better.” The ex-Cabinet Minister added: “What everyone needs is certainty, not a “never-end-um’”. – The Sun

  • Brexit boost as UK will leave European Union three months early – Express

Boris Johnson to use key Brexit speech tomorrow to warn that the EU endgame is political unity not free trade…

The founding fathers of the European Union did not create the common market to tear down barriers to trade but to pursue a political project, Boris Johnson will argue this week, in a speech setting out what he claims is a liberal vision for Brexit. The foreign secretary will call on remain and leave voters to unite, insisting that Britain can take advantage of the referendum vote for economic gain but only if it is ready to diverge on regulations… The foreign secretary called it a “teleological construction” that was “ends driven”. He said the founding fathers of the common market decided to create a “new sense of political identity by legal means” – but claimed this went against liberal thinking… Johnson believes that any move to stay as close as a country such as Norway is to the EU would tie Britain’s hands because signing up to the same regulations would limit the ability to strike new trade deals elsewhere. – Guardian

  • Boris Johnson will use his Valentine’s Day speech to call for Leavers and Remainers to abandon their labels and unite behind Brexit opportunities – Mail

…as Cabinet Remainers Philip Hammond and Greg Clark are belatedly granted ‘road to Brexit’ speeches of their own…

Whereas firm supporters of the Brexit option ahead of the referendum – the foreign Secretary, Boris Johnson, the international trade secretary, Liam Fox, and Brexit minister, David Davis – were all said to be part of the roll-out, there was no mention of either Philip Hammond or Greg Clark… Mr Hammond and Mr Clark both supported remaining in the European Union before the referendum and since then have argued for retaining close trade ties with the EU… Senior Whitehall sources tell me that both the chancellor and the business secretary will indeed be making speeches on Brexit over the next fortnight… Mr Hammond will be speaking about financial services. Mr Clark will talk about the need for closely allied “customs arrangements” to help business trade as freely as possible across our biggest export market – the remaining EU27 states. – BBC News

…while Philip Hammond embarks on a Brexit charm offensive across Europe amid fears France is deliberately stalling negotiations

[Hammond will] today visit Norway and Sweden, before heading to the Netherlands tomorrow, Spain on Thursday and Portugal on Friday as he appeals directly to European leaders in a bid to make a breakthrough in negotiations… The diplomatic blitz comes amid mounting concerns that Brexit negotiations are stalling, with one Government source accusing France of deliberately taking a “hard-line” in a bid to derail negotiations. The source said: “We want member states to have more of a say, it’s to their benefit that the trading relationship with the EU exists. The people in the Commission have more of a religious view of Europe. The preservation of the project is the most important thing [for them], even if it damages the European Union. France is the most negative of the member states, they are taking a very hard line. They see it as an opportunity to take business from us but it’s not going to work.” British officials had hoped to hold talks with the European Union this week but the request was turned down by Brussels. – Telegraph (£)

Theresa May and Irish premier Leo Varadkar to work on plan for frictionless Irish border

Theresa May and Leo Varadkar are to work together to come up with a new plan on how to achieve a frictionless Irish border after Brexit that does not involve the EU demanding Northern Ireland stays in the customs union and single market. But speaking to reporters after bilateral talks in Belfast, the taoiseach admitted that achieving this was the “tricky bit” in Brexit talks… Brussels and London sealed a deal on the Irish border in December with three options: an overall agreement that would allow frictionless borders between the UK and all its frontiers with the EU, a bespoke arrangement for Ireland, and in the event of a no-deal scenario or hard Brexit, a guarantee of “full alignment” north and south of the border, which would effectively mean Northern Ireland remaining in the customs union and single market. – Guardian

  • Ireland calls for ‘comprehensive’ deal with Britain after Brexit – Express
  • Theresa May calls for ‘final push’ on Northern Ireland power-sharing deal – Sky News
  • ROI launches Brexit information website – DFA.ie
  • ‘Hard Brexit’ could cost Ireland €5.5 billion over 2 years – The Times (£)
  • Call for clarity on the Irish border – The Times leader (£)

> Alexander Redpath on BrexitCentral today: Why Brexit won’t derail the Northern Ireland peace process

> Hugh Bennett on BrexitCentral: It’s time to stop doom-mongering over the Irish border – the solutions are already out there

Up to twelve European countries expected to rebel against Barnier’s plot to punish UK for Brexit

As many as a dozen European countries want Michel Barnier to take a softer line with Britain during Brexit talks, according to new reports. The top Eurocrat clashed with EU diplomats last week after he threatened to slap punishments on the UK if we break European laws. Now a top EU expert has claimed there are up to 12 member states warning Mr Barnier not to be too tough – and calling for a wide-ranging trade deal. They fear the EU will end up hurting itself by cutting off trade with Britain, Charles Grant of the Centre for European Reform suggested. But he added that the rebel countries may be unable to take on Mr Barnier – because they can’t agree on what they want him to do differently… [Barnier’s] tough line is supported by leaders from France and Germany – but not by all European states. One EU diplomat told the Sunday Telegraph: “Could anyone accept these terms? If I was Britain I would be tempted to say ‘no’ – walk away and then see how the EU does without the money.” – The Sun

  • EU eyes billions of euros from CO2 market for post-Brexit budget – Bloomberg
  • Slovak Premier urges faster aid use as EU budget debate heats up – Bloomberg
  • How Brussels plans to plug its Brexit budget black hole through cuts, plastic taxes and visa fees – James Crisp for the Telegraph (£)

Police investigation after Brexit-backing MPs receive death threats

Police are investigating death threats sent to at least four MPs who supported Brexit, including a cabinet minister. The letters, addressed by hand and sent in the past few days, claimed that the MPs had “taken lives on our side” and warned: “Now we will take lives on yours.” One of the letters was released by the Leader of the House of Commons, Andrea Leadsom, who described it as despicable. “We live in a democracy — death threats because you don’t agree? And unsigned? Coward,” she wrote on Twitter… The Metropolitan Police said that the threats were being taken seriously. “Police are aware of threatening letters sent to four members of parliament at the House of Commons,” the Met said in a statement… A similar message is understood to have been received by a constituent of the Conservative MP for Richmond Park, Zac Goldsmith, this month. – The Times (£)

  • Cabinet minister Andrea Leadsom sent ‘anti-Brexit’ death threat – Sky News
  • Andrea Leadsom becomes latest Brexiteer to receive death threats from anonymous trolls – Telegraph
  • Police investigate death threats against Brexit supporters – Guardian

Quitting the EU will help poorer Brits most by making goods in shops cheaper – but only if Britain leaves the customs union, says Australian High Commissioner

Brexit could boost the poorest Brits by dramatically lowering prices in the shops, according to a top Australian official. Alexander Downer, the high commissioner to Britain, also predicted that trade between the UK and Australia will boom once we quit the EU. But he warned Theresa May to pull Britain out of the customs union – or the country won’t have its own trade policy. Mr Downer told BBC Radio 4’s Today programme the UK would thrive if it stopped charging tariffs on imported goods after Brexit. He said: “If you unilaterally reduce your tariffs, it has a substantial and very positive effect on your economy because it reduces the price of imports. Imports which have tariffs on them are typically food, clothing, footwear, where low-income people spend a disproportionately high share of their income. It’s a progressive measure that helps low-income people more than high-income people.” – The Sun

  • Britain must quit customs union for better trade and growth after Brexit warns Australia – Express
  • Australia tells UK to open tariff-free trade to world after Brexit: ‘It’s worked for us for 26 years’ – Independent
  • ‘Hard Brexit’ to make every day life cheaper – Australian official says huge growth on way – Express

Boris Johnson’s plans for second link to Europe one step closer as Eurotunnel expresses interest in project

Boris Johnson’s plans for a new link between the UK and Europe could be coming closer to reality after Eurotunnel, which manages the Channel Tunnel, said it had contacted the Government to discuss the proposals… Eurotunnel added: “Mr Johnson’s comments are a good endorsement for a fixed link across the English Channel. Whether it’s a bridge or a tunnel, which would be decided on environmental grounds, Eurotunnel would be part of the process.” …The comments come after a report by The Telegraph, detailing a letter to the Prime Minister from Eurotunnel, which included comments from the company’s French chief executive, Jacques Gounon, who said he is “very interested” in a second fixed link and would be “delighted to start discussions”. – Independent

British and European businesses bullish over future after Brexit

British and European businesses are bullish about their future after the UK leaves the EU but most believe that freedom of movement and the jurisdiction of the European Court of Justice will continue in Britain after Brexit, research released today has found. More than two thirds (66 per cent) of the 2,500 companies surveyed in the UK, France, Germany and Spain predicted an increase in turnover after Brexit, with just 12 per cent predicting a decrease. 64 per cent said they expected to boost their employee numbers after the 29 March 2019 Brexit deadline… Despite Michel Barnier, the EU’s chief Brexit negotiator’s insistence that financial services cannot be part of any future UK-EU free trade deal, 59 per cent of German firms, 51 per cent of French and 56 per cent of Spanish companies believe a deal will be struck… Eight out of ten businesses asked revealed they had established dedicated Brexit teams and 68 pc said they felt prepared for the 29 March 2019 deadline. – Telegraph (£)

  • European businesses expect UK soft Brexit, survey suggests – FT (£)
  • Economy accelerating faster than previously expected – Express
  • Majority of voters expect economy to take immediate hit from Brexit but recover after ten years – Independent

Britain’s ‘attacks on tech companies’ raise investment concerns in America

Last week’s delegation from the U.K. parliament investigating “fake news” did little to help advance the Brits’ case. Despite being an independent cross-party group not directly connected to the U.K. government, its inquiry was widely reported in the American press. “If [the British] goal is to get [tech] investment, marching to Washington and saying they are going to investigate the big tech companies in the U.S. is probably not a recipe for success,” said a Washington consultant, who works closely with the technology industry. Another senior figure from a large technology company noted that perceived Tory leadership hopefuls, including Home Secretary Amber Rudd, Health Secretary Jeremy Hunt, Security Minister Ben Wallace and chair of the parliament’s digital committee Damian Collins have all written publicly about tech. “You don’t get a bad headline [in the British press] by attacking tech,” the figure said. “If you are on the dinner party circuit in Washington or San Francisco the rhetoric is not that these [Brits] are great people to do business with. The reaction is eye-rolling. People have not been going around town announcing investments,” he added. – Politico

Alexander Downer: Post-Brexit Britain could learn from Australia’s approach to trade

One of the great ideas Australia inherited from the UK was the idea of free trade. Let me say that Britain has nothing to fear from trade and competition… In the Eighties, Australia was an economy in all kinds of trouble. We had tried to develop new industries such as building our own cars and we had put up barriers and tariffs thinking they would protect our new businesses. But the policy did not help anyone. Our consumers had to pay more. We had a series of failing industries producing things that were not really wanted… We changed our whole approach to trade. We realised we should not be protecting our industries — we needed to open them up to the world. This forced our economy to modernise to keep up with the changing world and new technology. Australia has now had 26 straight years of economic growth since we recognised that barriers to trade are also barriers to growth. – Australian High Commissioner Alexander Downer for The Sun

Juliet Samuel: Britain must take its opportunity to blaze a trail for trade liberalisation

The UK economy is a very different beast from the EU’s major players, which makes its trade priorities very different. Britain’s exports are services driven… Britain is also not constrained by the particular interest groups of the EU, like German carmakers and French or Spanish farmers… The UK is also the single biggest export market for goods in the EU. This means that Britain can offer market access for goods in return for opportunities for our services exports, which barely even feature on the EU trade agenda… Britain is also likely to be comfortable co-operating on services using a very different model from the EU. The EU insists on “harmonisation” internally, which means everyone obeying the same regulations, and it’s very reluctant to recognise regulatory standards written by other countries. With this model, there may well be a limit to how much services liberalisation the EU can ever achieve… The UK could instead pursue a very different model: that of mutual recognition. This involves states agreeing to recognise the validity of one another’s regulations if they achieve similar outcomes, even if they are not exactly the same. This could well make more progress internationally, since sovereign states are usually reluctant to change their regulations at the behest of one another, but might be persuaded to recognise similar regulations. – Juliet Samuel for the Telegraph (£)

Frank Field: Labour Remainers risk pushing away core voters forever

It was right to ask the people about this once-in-a-lifetime change in direction for our country. But it is difficult for MPs to operate to a direct instruction like this in a representative form of government which we have in the United Kingdom. In safe Labour seat after safe Labour seat, overwhelming majorities of voters opted for Leave. At first, Labour MPs declared that they would represent their constituents’ views and voted to trigger Article 50, setting the departure clock ticking. This respect for their electorate of a significant number of Labour MPs did not last. Along came a number of wrecking amendments to the Brexit bill moved by our side. All too many Labour MPs voted for them under the thin disguise of improving the bill and acting in the national interest. – Frank Field MP for The Times (£)

Julian Jessop: We have much to gain, and little to fear, from trading with America post-Brexit

It is an open secret that the Cabinet is at war over the merits of leaving the EU’s customs union. It is also divided over the benefits of freedom to diverge from EU regulations. Unless these opportunities are taken, the UK will miss out on one of the biggest prizes of Brexit, namely the chance to do its own free trade deals with the rest of the world. But if the government is bold, the US is likely to be at the front of the queue… The economic and financial links between the two countries are already close. For example, the UK exports more goods to the US than to any other country, and the US and the UK are each other’s largest source of foreign direct investment. The UK should therefore be able to conclude a good trade deal with the US sooner than the EU ever could. – Julian Jessop for the Telegraph (£)

John Redwood: Can long-term forecasters answer these questions?

I find it difficult to believe some in the media are taking these latest economic forecasts for 15 years outside the EU seriously. They have all the hallmarks of the approach that the Treasury used to get the short-term forecast for the aftermath of a Brexit vote so hopelessly wrong… Why do they assume that staying in is a risk-free positive option? What assumptions should they make about tax levels and costs of regulation in the future? Will there be new taxes that hit UK economic activity? Will there be something like the ERM again that triggers a major recession? …How have they modelled the risks of a Corbyn-style government? I do not expect one but over a fifteen year period independent forecasters need to ascribe probabilities to policy changes that are being discussed. What do they assume about the adoption of new technology? What will Artificial Intelligence do to UK professional business services? Will the US still be pursuing pro-growth low-tax policies in fifteen years time? Will the rolling Euro crisis of 2009-14 reappear and what could that do to growth? …I could go on, but feel I have asked enough to show why I think these forecasts are a nonsense. Most fifteen-year forecasts are likely to be wildly wrong. The longer the period of the forecast, the more other things can happen that may have a big impact. – John Redwood MP for the Spectator

Telegraph: France will never tempt British companies with its retrograde dirigisme

If France, under president Emmanuel Macron, is purposefully stalling Brexit negotiations in order to steal business from the City of London, it is in for a rude awakening. The strategy appears to be that, if talks can be dragged out, financial services companies will be forced to put into practice contingency plans and will move operations to Paris to reduce the risk of disruption. It is dirigisme par excellence, the very French idea that state action can engineer economic gains. It is also delusional. While Britain should not be blind to the risk of losing its edge in financial services once it leaves the European Union, and the industry is asking for a transition period, the general tone of the debate has changed markedly since America under Donald Trump launched a blitz against regulation and massively cut taxes. The United States is now one of the most tax-competitive places to do business in the world, and many City firms fear that, unless the UK post-Brexit has the flexibility to adapt regulation and taxation to keep business in London, it will flee to New York rather than Paris or Frankfurt. Early, hysterical estimates of how many UK-based bankers would move to Europe have already been slashed. – Telegraph view (£)

Brexit comment in brief

  • Brexit Britain is fully capable of pushing for maximum freedom from EU – Sheila Lawlor for the Express
  • Meet the man who warned that we may become a vassal state to the EU – Paul Goodman for ConservativeHome
  • Brexit voters weren’t ‘brainwashed’ – they wanted a better Britain. Now it’s clear they won’t get it, we need a vote on the final deal – Chuka Umunna for the Independent
  • Brexiters owe us clarity on the sovereignty dividend – Janan Ganesh for the FT (£)
  • What is the EU Withdrawal Bill? The only explanation you need to read – James Rothwell and Laura Hughes for the Telegraph (£)
  • Let’s put our differences aside and show that Brexit is not inevitable – June Sarpong for The Times (£)
  • Brexit alarm bells are ringing for British industry – Peggy Hollinger for the FT (£)
  • Europeans are Britain’s new minority – Nick Cohen for the Spectator
  • Brexit’s losses may be independence’s gains – Alex Massie for The Times (£)
  • German coalition talks beyond extra time and now going to penalties – Iain Martin for Reaction
  • Europe speaks its own post-Brexit English – ‘Eurish’ – Michael Skapinker for the FT (£)

Brexit news in brief

  • Quintuple #DespiteBrexit special – Guido Fawkes
  • UKIP chairman Paul Oakden to quit after leadership vote – Sky News
  • Andrea Nahles to take over as head of German Social Democrats from Martin Schulz on Tuesday – Politico
  • Europe faces a ‘nuclear bomb’ of social unrest due to mass migration, EU warns – The Sun
  • Burns burns Soubry – Steerpike