Brexit News for Monday 20 March

Brexit News for Monday 20 March

Theresa May embarks on a UK tour to galvanise Brexit support

Prime Minister Theresa May will kick off a nation-wide tour with a visit to Wales this week as part of a move to “strengthen and sustain the precious Union.” Details of the trip were announced as Scottish first minister Nicola Sturgeon doubled down on her commitment to holding a second independence referendum. Dates for May’s visit to Scotland and Northern Ireland have yet to be announced, but in Wales today, the PM will announce will announce a total of £1.3bn in funding for projects including a new Swansea waterfront “digital district” and a partnership with indian industrial giant Tata to establish an “innovation and knowledge centre” for the steel industry. – City A.M.

Like or lump the EU divorce bill, Juncker tells May…

Britain’s divorce bill from the European Union will be a take-it-or-leave-it demand and if Theresa May does not like it she will have to walk away, Jean-Claude Juncker said yesterday. Using unusually uncompromising language, the president of the European Commission said that Britain faced “the choice to eat what’s on the table or not come to the table at all”. There is growing impatience with Mrs May in Brussels after she failed to trigger the Article 50 exit clause last week, pushing the beginning of negotiations back into late spring. The prime minister is not expected to inform the EU officially of Britain’s intention to quit the block until next week after a regional tour of the country which begins in Wales today. – The Times (£)

…as Britain and Germany prepare to sign new deal on defence

Britain and Germany are preparing to sign a new defence deal as Theresa May attempts to reinforce the government’s commitment to European security after Brexit. Areas of co-operation are expected to include cybersecurity, training and maritime patrols. The Royal Navy’s newest helicopter, the Wildcat, will operate from a German warship that is due to take part in operations in the Mediterranean next year. The UK and German defence ministries confirmed that they were working on joint projects. The former said that it was striving for “a joint vision statement on future co-operation” and the German defence ministry told the Financial Times: “Independent of the effects of Brexit, Great Britain remains a strong partner and ally in Nato and also bilaterally.” – The Times (£)

Whitehall puts finishing touches to long Brexit legislative agenda

Theresa May’s government will need to enact up to 15 new bills and thousands of pages of secondary legislation in addition to a centrepiece great repeal bill over the next two years, according to new research on how Brexit will happen. As the prime minister prepares to trigger Article 50 next week, Whitehall officials are putting the finishing touches to a wide-ranging legislative agenda that needs to be on the statute book by the time Britain leaves the EU in 2019. The programme will inevitably reduce the scope for ministers to introduce reforms that are unrelated to Brexit, according to the Institute for Government think-tank. – FT (£)

  • Coming soon: At least seven Brexit Bills. Leaving the EU will define May’s Government, a fate she should embrace – Paul Goodman for ConservativeHome

Brexit ministers demand Philip Hammond provide them with ‘hundreds more’ members of staff amid cuts

Brexit ministers are demanding that Phillip Hammond provide them with “hundreds more” members of staff after departments have been forced to make cuts. Mr Hammond has ordered the Trade Department and the Foreign Office to cut spending by 6 per cent, despite the fact their work is pivotal in the run up to the Brexit negotiations. Although the Brexit Department has been made exempt from this, a senior figure said they urgently needed more staff members. – The Independent

UK trade officials are exploring a 10-year interim deal to smooth the UK’s exit from the EU

British trade officials are discreetly exploring a 10-year interim arrangement with the European Union in case a trade deal is not reached during Britain’s exit negotiations. Officials from the U.K.’s Department for International Trade are investigating the possibility of keeping tariffs between Britain and the EU at zero as part of an interim arrangement that could last up to 10 years, allowing more time for a full trade deal to be negotiated after Britain has left the bloc, according to sources familiar with the discussions that have taken place at the World Trade Organization. – Politico Europe

UK economy set for strong 2017 despite Brexit, say top finance chiefs

The UK economy is set for a strong 2017 and could outperform other developed nations, despite uncertainty surrounding Brexit, according to bosses at some of the world’s biggest finance firms. More than half of those surveyed believe that the nation’s economy will remain resilient in 2017, and 22 per cent expect it to improve compared to 2016. Three quarters (76 per cent) predicted that UK economic growth will be in line with, or outpace, the average of the G7 group of advanced nations this year. Brexit was by far the biggest concern for financial firms in 2017, according to those surveyed. The prospect of losing valuable passporting rights that allow firms to sell services across the EU was the primary issue cited, with increased barriers to trade and loss of access to skilled EU workers also regularly mentioned. – The Independent

  • Britain’s financial services will remain resilient during the Brexit negotiations –
    The Independent

Tim Farron calls on Tory MPs opposed to hard Brexit to defect or resign

Tory MPs who oppose a hard Brexit should defect or resign rather than vote against their conscience, the Liberal Democrat leader, Tim Farron, has said in a direct appeal to Conservatives to join his party. Farron said the Lib Dems had the momentum to defeat Tories who decide to remain loyal to Theresa May’s Brexit agenda, citing his party’s victory over the former Tory MP Zac Goldsmith in last year’s byelection in Richmond Park, a constituency that voted heavily to remain in the EU in the June 2016 referendum. Addressing his party’s spring conference in York, Farron said Tory MPs should stop supporting policies in parliament that were the opposite of those they had signed up for. “You are now the supporters of a government that is as anti-business as Jeremy Corbyn,” he said. “You are now the cheerleaders of a government that is as anti-refugees as Nigel Farage. – The Guardian

  • Lib Dems back plan to allow Brits ‘devastated by referendum’ to opt in to EU citizenship – The Independent
  • Tim Farron accuses Theresa May of being similar to Le Pen, Putin and Trump – Huffington Post

…as Tony Blair suggests Labour should offer option of staying in the EU if Brexit deal fails

Tony Blair has said Labour should be prepared to offer voters the chance of staying in the European Union if the Government fails to secure its promised trade deal with the remaining member states. The former prime minister said the Government faced negotiations of “unparalleled complexity” if it was to achieve its stated aim of delivering an agreement that replicates as closely as possible Britain’s existing trade arrangements with the EU. While voters had backed Brexit in last year’s referendum, he said he believed it was “possible” the public mood would change if it did not result in the promised benefits, and Labour should be ready to capitalise on that. – Huffington Post

  • Tony Blair did more than anyone to cause Brexit. He should keep quiet about it – Daily Telegraph editorial
  • Blair: Labour should reconsider Brexit stance – BBC News
  • Tony Blair admits he did not realise how many migrants would come to the UK after EU expanded – Daily Telegraph
  • Theresa May doesn’t need lectures from has-beens – Daily Express editorial
  • It is sad to see former Prime Ministers resort to slinging insults at the voters – The Sun

City of London pushes for lower taxes to sugar Brexit pill

Finance chiefs in London are preparing a fresh round of lobbying for lower taxes and looser regulation to sugar the pill of Brexit and maintain Britain’s appeal in the global competition between financial centres. As Theresa May’s government prepares to activate Article 50 and start the two-year process of leaving the EU this month, senior City financiers are already drawing up ways to protect the sector’s interests. “The challenge for the UK is not to assume it’s unassailable,” said John McFarlane, chairman of Barclays and TheCity UK lobby group, in an interview with the Financial Times. “Advantage needs to be renewed.” – FT (£)

Expat benefits should stay, says Spain

Spain wants a Brexit deal that allows British expatriates to remain on the Costas with their benefits intact, including access to healthcare. Madrid would “in principle” favour an agreement that would allow Britons living in Spain and other parts of the EU to retain existing rights. Jorge Toledo, the Spanish secretary for the EU, and Madrid’s leading negotiator on Brexit, told The Times: “We are broadly in favour of retaining a reciprocal agreement on questions like healthcare and freedom of movement. “As regards the rights of EU citizens in the UK and the rights of UK citizens in the EU, Spain is in favour of the amplest respect of these rights in the future but the modalities and conditions will and should be a matter of negotiation.” – The Times (£)

Alex Salmond: Independent Scotland to join EFTA to get into single market more quickly

Scotland would try and join the European Free Trade Association rather than the EU immediately after independence under the SNP’s latest plans, Alex Salmond has confirmed. The former First Minister said that Scotland would try and join EFTA as a “transition” for an undefined period, before applying to join the EU in the longer term. He said this would be easier to achieve and take less time because EFTA has only four members and would not have “anything like the difficulties” of getting full EU membership. By following this route, known as the Norway model, he argued an independent Scotland could have “continuous” membership of the EU’s single market. – Daily Telegraph

Alex Salmond accused of rewriting history after he denies ‘once in a lifetime’ referendum pledge – Daily Telegraph

A child of the Thatcher years, nationalist leader Nicola Sturgeon evokes some bitter memories – Bloomberg

Soon there’ll be no Scottish economy left to fight over – Matthew Lynn for the Daily Telegraph

Companies ‘more concerned with staff retention than Brexit impact’

A survey of 3,000 managers found that one in four were focusing on how to keep hold of employees without large financial incentives. Fewer than one in 10 of those polled by management firm Alexander Mann Solutions said uncertainty over the UK’s exit from the EU was their main challenge. Jeremy Tipper of Alexander Mann Solutions said: “It’s somewhat surprising that having spoken directly to organisations, the biggest headache they are predicting in the immediate future is at odds with the many news reports we see each day. “Despite the avalanche of media attention and continuous emphasis on the potential impact Brexit could have on businesses, very few firms have placed this at the top of their list of concerns in the coming months.” – The Courier

Patrick Minford: Brexit will make UK manufacturing more profitable

It turns out that manufacturing and the car industry will be much more profitable than before over the short and medium term. Edgar Miller of Cass Business School and I estimate that profits in manufacturing could increase on average by about 16 per cent of value-added and in car manufacturing by about 14 per cent, mostly due to the fall in sterling. This provides these industries with a large boost to profitability as they raise productivity over the long term. It also explains why UK manufacturing, far from reeling from Brexit uncertainty, is firing on all cylinders, with the latest purchasing managers’ index recording growth in the sector. – Patrick Minford in the FT (£)

Wolfgang Münchau: A sensible Brexit deal is more probable than you think

The debate about Brexit is largely informed by confirmation bias. If you are a Brexiter, you are likely to ignore any information that leaving the EU would be bad for the economy, or that the negotiations are going to be fiendishly difficult. If you are a Remainer, you keep doubling down with exaggerated warnings about economic doom. You may also say the EU will deny Britain a decent exit deal. You will do so because you are angry, or because you are already looking forward to your moment of sweet revenge — when you can say: “I told you so”. And there are still some people who hope — or fear — that the whole thing can still be undone. It cannot. The reality of the great Brexit battles ahead is that they are comparatively boring. After Prime Minister Theresa May triggers Brexit, which is expected to happen next week, the UK will be out of the EU by July 2019 at the latest, possibly few months earlier. And, contrary to the warnings I keep hearing, I believe that the chances of an exit deal under Article 50 of the Treaty on European Union are not all that bad. – Wolfgang Münchau in the FT (£)

Matt Ridley: Britain must make sure that India is a friend

By 2022, India will have overtaken China to become the most populous country in the world and, growing fast, will be rapidly returning towards the dominant position it held in the world economy for centuries. It was the world’s economic superpower when imperial Rome and Han China were its junior trading partners. It still represented one quarter of the world economy when Britain began to conquer it in 1757. And it was we British who impoverished it. So argues Inglorious Empire, a remarkable new book by the Indian MP Shashi Tharoor, a former candidate for secretary general of the United Nations who is being touted as a potential leader of the Congress Party. The book is savagely critical of 200 years of the British in India. It makes very uncomfortable reading for Brits, especially those like me who had a parent brought up partly in India. – Matt Ridley in The Times (£)

Brexit comment in brief

  • The result of last year’s EU referendum must be respected – Jayne Adye for EU Today
  • The EU referendum’s winners and losers are still struggling to adapt to their role reversal
    Mark Wallace for ConservativeHome
  • Worrying mood music on global free trade from the G20’s summit in Baden-Baden – Christian May in City A.M.
  • Brexit Britain is suddenly debating trade – but it’s the wrong talking point – Larry Elliott for The Guardian
  • Britain has the talent to lead the Fourth Industrial Revolution – Alan Mak MP for The Times (£)
  • An independence referendum on the SNP’s timetable wouldn’t be fair to Scotland. But they don’t care. – Nadhim Zahawi MP for ConservativeHome

Brexit news in brief

  • Musicians must keep Britain in tune with EU after Brexit, says Ashkenazy – The Guardian
  • Lords warn leaving EU legal framework poses risks for cross-border cases – The Guardian
  • Brexit could see tax on tourism and flights ‘slashed’ – News Letter
  • A Brexit lexicon – Politico Europe
  • Judges should launch PR blitz to boost their image after Brexit, says Liz Truss – BT