Brexit News for Wednesday 6 December

Brexit News for Wednesday 6 December
Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team

Boris Johnson and Michael Gove lead Cabinet revolt against Theresa May over fears she is forcing a ‘soft’ Brexit…

Theresa May is facing a Cabinet revolt after Brexiteers led by Boris Johnson and Michael Gove expressed “genuine fear” the Prime Minister is trying to force through a soft Brexit. Mrs May was accused of trying to “bounce” the Cabinet into agreeing to “regulatory alignment” between Ulster and Ireland after it emerged she did not brief senior ministers before talks in Brussels on Monday that stalled over the controversial issue. David Davis, the Brexit Secretary, said that any alignment between the north and south in Ireland would apply to the whole of the UK, which Leave supporters interpreted as Britain remaining yoked to the EU. One Cabinet source said: “It seems that either Northern Ireland is splitting from the rest of the UK or we are headed for high alignment with the EU, which certainly hasn’t been agreed by Cabinet. The Prime Minister is playing a risky game.”. – Telegraph (£)

A dangerous Tory Brexiteer revolt has also been spiralling tonight over the PM’s proposal, drawn up to break a negotiations deadlock over the Irish border… It has also emerged tonight that Mrs May had not told her Cabinet about her controversial offer in Brussels on Monday, or won its sign off for it. The Sun has learned that Boris spoke out over his fears about it at the weekly meeting of the PM’s top table of ministers this morning. Mr Johnson told Mrs May that he “would worry if regulatory alignment bound us into the EU”… [David] Davis raised eyebrows [in the Commons] when he also refused a demand from Tory MP Jacob Rees-Mogg to make regulatory divergence a Brexit red line. Mr Davis instead said: “The red line for me is delivering the best Brexit for Britain”… Iain Duncan Smith said: “We cannot sign up to regulatory alignment. It means we can’t do trade deals These are demands that are designed to box us in. We have to say to them, ‘not good enough’. We simply can’t pay this price.” – The Sun

  • Theresa May faces new Brexit revolt from Boris Johnson – Bloomberg
  • Irish dispute triggers Tory battle on Brexit destination – FT (£)
  • Boris Johnson leads Cabinet rebellion against fears Theresa May wants a ‘soft Brexit’ – Express
  • Are we due a “Boris eruption”? Where he, May, Davis and Hammond are now on the Government’s Brexit strategy – Paul Goodman for ConservativeHome

…as Ruth Davidson says Theresa May may have to pursue regulatory alignment with the EU on a ‘UK-wide basis’…

Ruth Davidson and her Scottish Tory MPs have helped Theresa May push back against the Tories’ hard Brexit wing by arguing that any special deal for Northern Ireland would have to apply to the rest of the UK. The Scottish Conservative leader telephoned the Prime Minister on Tuesday morning to say that any special arrangements to maintain a frictionless border between the north and south of Ireland should be copied on the British mainland. In a subsequent statement that was looked on favourably by Downing Street, she and the 12 new Scottish Tory MPs at Westminster argued that the country should not be divided by “different deals for different home nations”… The support of the Scottish Tory MPs, who hold the balance of power in the Commons, makes it difficult for Mrs May to get a majority for a Brexit deal unless she accepts that the entire UK will continue to follow a swathe of EU regulation. – Telegraph (£)

  • Theresa May warned against unique deals for each nation by Scottish Conservatives leader Ruth Davidson – The Times (£)

…while the DUP puts pressure on May to drop suggestion of regulatory alignment with the EU…

The DUP is pushing the government to drop its promise to align rules between Northern Ireland and the Republic of Ireland after Brexit as they made clear they were prepared to keep Theresa May waiting in order to secure an acceptable deal… Speaking at the Houses of Parliament, Mr Dodds said that other areas of co-operation already existed and could continue. The DUP would oppose open-ended offers to keep rules the same. Mr Dodds said: “Northern Ireland already has a single energy market with the Irish Republic so there are areas where we can cooperate with the Irish Republic and indeed where it make sense to have regulatory alignment in certain specific areas, but not in relation to following the rules of the customs union and single market for Northern Ireland as a generality. The fact of the matter is that this whole issue of no divergence or regulatory alignment regulatory divergence has been brought in by the Irish republic. There are sensible ways of dealing with the Irish border through technology, trusted trader status. It is the EU (that is blocking this)”. – The Times (£)

  • DUP threaten to delay Brexit deal for ‘as long as necessary’ in border row – The Sun
  • Pressure grows on May as DUP reveals Brexit ‘shock’ – Guardian
  • DUP boss Arlene Foster insists she won’t sign up to Brexit deal which cuts off Northern Ireland from the rest of UK – The Sun
  • Damian Green blamed by DUP for communications breakdown which led to Brexit talks impasse – Telegraph (£)
  • Brexit means a slow creep to reunification, Unionists fear – The Times (£)
  • Varadkar rejects DUP accusation over deal – The Times (£)
  • Ireland, the EU is playing you like a fiddle – Brendan O’Neill for the Spectator
  • Stay strong about Ireland or Britain will be taken apart – Ross Clark for the Express
  • No, the Northern Ireland Brexit solution was not going to break up the United Kingdom – Professor Colin Harvey for the Telegraph (£)
  • If Ireland gets a bad Brexit trade deal, Leo, you’ll have yourself to blame – The Sun says
  • Leaders in Dublin and Brussels must stand firm and not cede ground on the border issue – The Times leader (£)
  • Blocking a Brexit divorce deal is a high-stakes game – FT view (£)

> WATCH Nigel Dodds: Northern Ireland must leave the EU on same terms as UK

…and Brexiteers back the DUP’s demands for a clean Brexit

Brexiteer cabinet ministers are backing the Democratic Unionist Party, heaping pressure on Theresa May to tear up a promise to align rules with the EU after Britain’s departure… Brexiteer Tories thanked the DUP for scuppering a deal that they claimed would either break up the UK or ensure it could never fully leave the EU. One senior Conservative said MPs would comprehensively reject any proposal that resulted in the UK signing up to maintain any kind of regulatory alignment with the EU… The former Tory leader Iain Duncan Smith warned the EU to back down and called on Mrs May to walk away from the talks if they refused… A cabinet source said she failed to reassure her colleagues that the DUP was wrong to fear that the scope of the commitment left Northern Ireland vulnerable to being forced to mirror almost all EU rules. – The Times (£)

  • PM told to walk away from talks by her own Eurosceptic MPs over ‘intolerable’ demands – Daily Mail
  • Irish border row: Theresa May’s four options risk a bad-tempered Brexit – Peter Foster for the Telegraph (£)
  • Finally Theresa May is coming out of her protective Brexit shell – but outside, it’s a bloodbath – Asa Bennett for the Telegraph (£)
  • May’s failure in Brussels blows open Brexit debate at home – Charlie Cooper for Politico
  • Theresa May must urgently clarify what sort of Brexit she is now seeking to achieve – Telegraph editorial

> WATCH Jacob Rees-Mogg: “I’m grateful to the DUP for helping the Government stick to its own Brexit policy”

Northern Ireland’s biggest manufacturer Bombardier rejects Brexit border in Irish Sea

Bombardier Inc., whose Belfast aircraft plant is Northern Ireland’s biggest manufacturer, said it’s against any moves toward a Brexit deal that would effectively redraw the U.K.-Ireland border in the Irish Sea. Rather than benefit from a settlement keeping the province in a customs union with the Irish Republic to preserve boundary-free travel, the Belfast site, which employs 4,200 people, would find its day-to-day imports tied up in red tape and delays, the head of the operation said. “Most of them come via the mainland, through the ports of Liverpool and Southampton, whether from U.K. suppliers, European suppliers or from North America and China,” Michael Ryan, Bombardier’s president of aerostructures and engineering services, said in an interview. Only a small number of items are flown in via Dublin airport, he said. – Bloomberg

Shadow Cabinet members call for Customs Union membership to be kept “on the table”

U.K. opposition Labour Party leader Jeremy Corbyn’s policy of constructive ambiguity on Brexit came under pressure Tuesday as his lawmakers argued that Britain should stay inside the European Union’s customs union… Labour’s official position is vague. Corbyn and his shadow Chancellor John McDonnell say simply that they want a “jobs first Brexit,” and Brexit spokesman Keir Starmer has said Britain should stay in a customs union and the single market during any transitional period. As Davis was speaking in Parliament, one of Labour’s Brexit team, Jenny Chapman, told the BBC that the party would keep customs union membership “on the table.” Starmer stuck close to that line in the House of Commons, accusing Prime Minister Theresa May of being reckless in rejecting the option of customs union membership without saying that Labour backed it. – Bloomberg

  • David Davis faces heated questioning from MPs over Brexit talks failure – FT (£)
  • Labour attacks ’embarrassing’ Brexit talks – BBC News
  • Shadow Cabinet Brexit positions in full – Guido Fawkes
  • The Labour party’s Brexit muddle puts them on thin ice – Christian May for City A.M.

Former Brexit minister David Jones warns on ECJ oversight and regulatory alignment

If the U.K. does not leave the jurisdiction of the European Court of Justice, it will not have left the European Union, former Brexit Minister David Jones said Tuesday… “The European Court of Justice is effectively the supreme body within the European Union,” Jones told BBC’s Today program. “If we are continuing to be subject to its jurisdiction, then again we have not in reality left the European Union… If we are to make a success out of Brexit, indeed if we are to have Brexit at all, we’ve got to make sure that we are free to conduct our own trade arrangements the way we want to,” Jones said. “If we maintain a regulatory alignment with the European Union then that makes it extremely difficult if not impossible,” adding that he did not favor such a regulatory alignment.” – Politico

Moving euro clearing away from London threatens global financial services, warns City grandee…

Moving euro clearing away from London could send shockwaves across the global financial community, forcing up transaction costs and causing capital requirements headaches, one of world banking’s most influential voices has warned. Speaking at TheCityUK annual dinner at London’s Plaisterers’ Hall, chairman John McFarlane said Brexit in March 2019 is a reality that needs to be accepted and the UK will not be able to retain all the benefits of being a full member of the EU. While he accepted some activities currently performed in the UK may need to be moved to the EU, moving others could be detrimental not just to Britain but worldwide. – City A.M.

…as Treasury minister tells City not to expect a bonfire of red tape after Brexit

Britain will not slash red tape after quitting the EU as the UK’s financial services sector is already highly competitive even with Brussels’ regulations, the Government has told banks. Even if the UK leaves the EU without a deal there will be no bonfire of regulation, Treasury minister Stephen Barclay told peers… Last week Mark Carney, the Governor of the Bank of England, said there could be room to cut some excessive regulations from the EU… However, Chancellor Philip Hammond, speaking late on Tuesday, argued the UK was looking to protect its existing trade deal with the European Union and that this would require a new type of agreement to be drawn up between the two parties, different to that agreed with foreign countries. – Telegraph

  • Bank of England mulls ordering banks to raise buffers against disorderly Brexit – Telegraph
  • Bank of England ‘secretly warned’ High Court of flood of Brexit insurance cases – The Times (£)

Public blame the EU as optimism falls about a good Brexit deal – but still back the same kind of Brexit as before

Some 57 per cent blame the EU for how negotiations are going – up from 47 per cent in February. And the proportion of Brexit voters who think the UK will secure a good deal has fallen from 51 per cent to 28 per cent… But despite the pessimistic outlook, the research found public opinion on what kind of Brexit the UK should be seeking has not changed markedly during the course of the year… [Professor John Curtice said:] “It should not be presumed that growing disappointment and discontent with the Brexit process will necessarily persuade voters to change their minds about the kind of Brexit the UK should be seeking, or their view about the wisdom of leaving the EU in the first place.” – The Sun

Joining Efta court may be Britain’s only road to ‘deep and special’ EU partnership, says its president

Writing for the Telegraph, Prof Carl Baudenbacher said the Efta court could become a “natural home” for the UK after Brexit, while its existing members would be happy for at at least one British judge to sit on its panel. The Efta court oversees access and membership to the single market for European Economic Area (EEA) members Iceland, Liechtenstein and Norway within the framework of EU rulings and European law… Eurosceptics have poured scorn on the idea of Britain signing up to the Efta court as they say the requirement to take into account ECJ rulings means that in practice it is subservient to EU law… Though EFTA members benefit from access to the single market, they must accept some EU laws and regulations. They also have no voting rights on EU laws but can try to influence them from outside. – Telegraph (£)

  • After Brexit, here’s why Britain’s natural home could end up as Efta – Carl Baudenbacher for the Telegraph (£)

Robin Swann: Northern Ireland is not a bargaining chip

While the Ulster Unionist party advocated remaining within the EU, once the UK as a whole voted to leave, we were very clear as to what had to happen next. We are democrats. There can be no separate arrangements for Northern Ireland, which is exactly what would have been introduced via a commitment to “no regulatory divergence” across the island of Ireland after Brexit or “continued regulatory alignment” between Northern Ireland and the Republic… Anything that weakens our regulatory regime or means that regulations applicable in Northern Ireland could be set in Dublin or Brussels without consultation, rather than being established in Belfast or Westminster, would be wholly unacceptable. We would be left voiceless and have no say on their design or implementation. It would also mean that if the UK government is negotiating future trade deals across the world, we would be seen as a place apart. What kind of unionist worthy of the name could ever countenance that? – Ulster Unionist Party leader Robin Swann for the Guardian

Theresa Villiers: With goodwill and technology we can avoid a hard border

Technology can be used to carry out checks and declarations remotely and electronically using pre-clearance. Customs checks are already dealt with in this manner (using concepts such as “authorised economic operator” and “trusted traders”) in many EU countries in relation to goods from third countries. This should be further assisted by the landmark Trade Facilitation Agreement. This came into force in February 2017 following its ratification by the WTO and requires signatories (including the EU) to facilitate cooperation between customs authorities on trade facilitation and customs compliance issues. Technology can therefore provide the solution for larger businesses and a workable package for the border would be complete if smaller businesses were given a customs opt-out for what is essentially local trade which just happens to cross between Ireland and Northern Ireland. – Former Northern Ireland Secretary Theresa Villiers for The Times (£)

Jeremy Hunt: Science in Britain will thrive – whatever the outcome of Brexit

Lots of gloomy predictions are made about Brexit, so let’s ask ourselves this: why are these organisations choosing to invest in Britain? They’re choosing us because they have confidence that the fundamentals that have made the UK such a strong destination for inward investment over the last 25 years will remain in place after we leave the EU. Firstly, we have one of the most productive scientific research bases in the world, for example – responsible for 80 Nobel prize winners in chemistry, physics and medicine alone, and home to three of the top ten universities in the world. This will not change… [W]hatever the outcome of our Brexit negotiations, we have promised a competitive regulatory system that serves the best interests of patients and allows the UK life sciences sector to thrive, including fast processing of approvals and licences. Eighteen months ago, the clinching argument in the decision to leave the EU was that it gave us back the power to shape our own destiny. Today, we are starting to see what this future might look like: forward-looking, highly skilled and built on a very British tradition of creativity and entrepreneurship. – Jeremy Hunt MP for the Telegraph (£)

  • Britain can lead scientific discovery ‘whatever happens with Brexit’ says Jeremy Hunt – Telegraph

Danny Finkelstein: Labour must make up its mind on Brexit

The fact is that Labour’s position on Brexit is simply not viable — legally or politically. And in turn, this is storing up a dilemma that could cause the country, not just the party, real harm… If the government puts its Brexit deal to a vote in the Commons and loses, it is unlikely that the opposition would achieve anything more than losing whatever agreements had been struck. We would still have to leave in March 2019. The alternative would be for the opposition to insist that we stay in the customs union and the single market for an indefinite period. Yet again, this would require the EU to agree to an arrangement while being told by us that it’s only temporary. It will strike Brussels as simply another British attempt to buy time and screw a better deal out of them. Why on earth should they agree to that? – Danny Finkelstein for The Times (£)

Charles Jacobs: Brexit is an opportunity to strengthen the rule of law

Whatever your view on the UK’s decision to leave the EU, we can all agree that we must improve the country’s economic competitiveness post-Brexit. An important part of that will be getting right the complex process of disentangling UK law from EU law. The significance of this process has focused unprecedented political and commercial attention on the UK’s legal system. Irrespective of the merits or risks of Brexit, we should use the importance of this legal task, and the corresponding level of attention on our legal system, as an opportunity not only to rework Britain’s laws but also to improve how the rule of law operates in the UK for the benefit of our business environment. The rule of law is the foundational basis for creating the stability, fairness and ultimately the confidence that businesses need to invest in Britain. – Linklaters Chairman Charles Jacobs for the Telegraph (£)

Barnabas Reynolds: The City will continue to thrive, with or without a Brexit deal

Brexit is less disruptive than might first appear. Many of the gloomy predictions ignore the fact that we can place some reliance on EU law. There is an element of confirmation bias underlying the thinking. Bleak discussions confirm pre-existing beliefs as to the need for expensive no-deal contingencies. There are in fact two attractive ways forward for financial services on Brexit. The first – the preferred option – involves obtaining mutual access through recognising each other’s standards… The other way forward for the City is to plan for an attractive no-deal fallback… The UK is starting to act. The governor of the Bank of England has floated the idea of rolling back aspects of EU financial regulation after Brexit, including the much-criticised bonus cap. Britain can now prepare to refocus its regulation on what matters and away from unnecessary box-ticking. If a deal is withheld by the EU, this will be at considerable cost to its own consumers – punishing them to make a political point. But businesses in the UK can, and will, continue to flourish. – Barnabas Reynolds for City A.M.

Jeremy Warner: After the border issue comes post-Brexit trade. That’s when things get really tough

[N]o deal has come to be seen as an unconscionable choice. It is therefore necessary to address the question of how many other red lines must now be crossed in order to win a satisfactory deal on trade. The divorce settlement is in a sense the easy bit. Next comes much more tortuous negotiations on trade… Both membership of the single market and the customs union have been ruled out by the Government, which seeks instead a unique, “deep and special” relationship with the EU. Are these red lines to be ceded too? It is hard to see how it would be “taking back control” if they were. Britain would become a rule and trade agreement taker, with very little say in their construction – not so much taking back control as abject surrender. – Jeremy Warner for the Telegraph (£)

Brexit comment in brief

  • The best way to solve Brexit’s Irish border issue is stay in the EU customs union and single market – Vince Cable for The Times (£)
  • It is claimed that the EU has conceded nothing and our Government much. But in truth, both sides have moved. – Henry Newman for ConservativeHome
  • There’s no chance of uniting Britain on Brexit, Anna Soubry, especially if we stay in the Single Market – Tom Harris for the Telegraph (£)
  • Taking back control of trade will be a challenge for post-Brexit Britain – Angus MacNeil MP for The Times (£)
  • Skeleton Brexit deal risks leaving parliament in the dark – Nick Clegg for the FT (£)
  • Shy Tory remainers must find the courage to mutiny too – Rafael Behr for the Guardian

Brexit news in brief

  • MPs and peers criticise tight security around Brexit impact reports – Guardian
  • Brexit boost as Liam Fox reveals British music exports have soared to £2.5billion – Express
  • EU’s tax haven blacklist mocked after bloc refuses to include member states – Express