Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Decision time this week for government on Brexit trade policy… The Conservative party is planning to debate an issue it has put off for five years in four hours this week: what sort of economy does it want to see after Brexit? Cabinet subcommittee meetings scheduled for Wednesday and Thursday are to discuss what negotiating objectives the government will take into the next stage of exit negotiations. In particular, ministers are split over proposals from some UK officials to soften the pain of departure by seeking an extensive new customs union with the EU. Opponents such as Boris Johnson would prefer to keep maximum flexibility to strike new trade deals outside Europe instead. – Guardian Secret plan to use Brexiteers Gove and Johnson in compromise to end Tory turmoil on trade talks – Times (£) > BrexitCentral video: The ‘Divergers’ vs the ‘Aligners’. Who will win out in the biggest Brexit battle so far? …as Downing Street states ‘categorically’ that Britain will leave Customs Union after Brexit… Downing Street has insisted that Britain will “categorically” leave the customs union as a crucial week of Brexit negotiations begins both with the EU and inside the Cabinet. Seeking to calm the fears of some backbench critics who have accused Chancellor Philip Hammond of seeking to pursue his own policy aimed at keeping Britain as closely aligned as possible with the EU, a No 10 source said last night: “It is not our policy to be in the customs union.” The source said they would be seeking an “arrangement” with the EU to ensure trade remained as “frictionless” as possible after Brexit. It comes as Theresa May and David Davis are to hold talks with Brussels’ chief Brexit negotiator Michel Barnier as officials prepare to open negotiations on transitional arrangements. – Sky News Theresa May stands firm over UK striking own trade deals – Express > Martin Howe QC on BrexitCentral today: Remaining in the EU Customs Union after Brexit would be a political and economic disaster …despite ministers sending mixed messages on the issue over the airwaves yesterday… Tory in-fighting over Brexit erupted today [Sunday] as Amber Rudd said the UK may stay in a customs union with the EU – only to be slapped down by Dominic Raab who ruled it out. A row over what Britain’s future relationship with Brussels should look like is brewing ahead of a crunch meeting of Theresa May’s Brexit war Cabinet later this week. Ms Rudd, the Home Secretary, left the door open to the UK having a customs union with the EU saying the PM has an ‘open mind’ on the question. But within minutes of her making the statement on television Housing Minister Dominic Raab popped up on another channel where he ruled out staying in any form of customs union. – Daily Mail ‘ Brexit war Cabinet is more united than they think’: Amber Rudd claims customs deal compromise is close – Telegraph > On BrexitCentral’s YouTube: Housing Minister Dominic Raab on leaving the EU Customs Union … while the Labour Party looks to be edging towards opposing the Brexit deal agreed in the autumn The biggest political moment of 2018 is likely to be the parliamentary vote on the U.K.’s Brexit withdrawal agreement, expected in the autumn. How Labour’s 259 MPs vote will very likely decide the outcome and the country’s future. At the moment, the party looks like it’s heading only one way: opposing anything other than the softest of departures from Europe. Its Brexit spokesman Keir Starmer told Politico the position was clear: “If the final deal that the government brings back does not meet our six tests and provide for a strong future partnership with the European Union then we will not support it. Labour is clear that we want a deal with the European Union that retains the benefits of the single market and the customs union.” – Politico Amber Rudd says UK will not ‘surrender’ over fight for bespoke Brexit deal with the EU… Britain will not “surrender” in its fight to win a bespoke deal with the European Union that would offer tariff-free trade as well as control over immigration, a minister said on Sunday before a crunch week for the government in Brexit negotiations. Home Secretary Amber Rudd was one of several senior Conservative members of parliament to take to the airwaves to support Prime Minister Theresa May, under pressure from Brexit hardliners who fear she is diluting her plans for a clean break with the EU. With reports in the local media suggesting that pro-Brexit ministers are being urged to get ready to replace May, Rudd tried to play down the deep divisions in government, saying there was more unity than so-called Brexiteers thought. – Reuters …and slams Jacob Rees-Mogg’s claims of Treasury “fiddling” Brexit figures… Amber Rudd has hit back at fellow Tory Jacob Rees-Mogg and his claims that the Treasury “fiddled figures” relating to the potential economic impact of Brexit. The home secretary said the claims were “wrong” and a “surprise”. “I’m very surprised at Jacob, because he is famously courteous, famously thoughtful, articulate. So I’m very surprised that he’s used that language. I think that they are wrong, he is wrong here, and this document that he’s particularly referring to is not a Treasury document anyway,” she said, speaking on the BBC’s Andrew Marr show. – City A.M. Home Secretary Amber Rudd tells Brexiteers to back off the PM – Belfast Telegraph Cabinet ministers in fight to keep Theresa May as PM over Rees-Mogg fears – Express > On BrexitCentral’s YouTube: Amber Rudd on the Brexit forecasts …while ex-civil service chief claims Brexiteers are ‘selling snake oil’ as row over Whitehall impartiality intensifies The former head of the civil service has accused Brexiteers of “selling snake oil” as a row over the impartiality of Whitehall officials intensified. Former cabinet secretary Lord Gus O’Donnell said accusations made by Jacob Rees-Mogg that civil servants at the Treasury were “fiddling the figures” to show Britain would be worse off outside the European Union were “completely crazy”. Meanwhile, Amber Rudd, the Home Secretary, rebuked Mr Rees-Mogg as she said the leading Eurosceptic MP was “wrong” to have made the claim. – Telegraph > Professor Patrick Minford on BrexitCentral today: Even the new Civil Service approach seems to show the benefit of Free Trade outside the EU Customs Union Brexit gloom lifted again as UK growth is upgraded One of Britain’s top think tanks has upgraded its growth forecasts for the UK economy, in a move that threatens to deal another blow to widespread predictions that Brexit would deliver a serious shock to Britain. Tearing up forecasts it made just a few months ago, the EY Item Club has lifted its UK GDP estimates for 2018 to 1.7pc, up from the 1.4pc predicted in its Autumn Forecast in October last year. Its team of economists has also acknowledged that growth in 2017 was better than expected at 1.8pc. Momentum from 2017 is now expected to carry into this year, the think tank said. – Telegraph Brexit not deterring EU students from applying to study in the UK The number of foreign students applying to UK universities has risen beyond 100,000 for the first time, as UCAS figures suggest that Brexit has not deterred EU students from studying in the UK. The statistics for students applying by the January deadline show that applications from EU students coming from outside the UK rose by 3.6 per cent in 2018 after dropping in 2017. The total number was 43,510, the highest level for any year apart from 2015, when applications hit an all-time high of 45,220. – Telegraph Vince Cable: Corbyn ‘crucial’ to second EU referendum hopes The Liberal Democrats’ leader says Jeremy Corbyn is “crucial” to his hopes of forcing another Brexit referendum. Sir Vince Cable accused the Labour leader of “collusion” with the Conservative government to enable Brexit to happen. He admitted there was no clear evidence of people changing their mind on EU membership. But he insisted a growing number of people wanted a vote on the final deal reached with Brussels. – BBC News Welsh Government must ‘urgently’ plan for a no-deal Brexit The Welsh Government must ‘urgently’ devise a plan for a ‘no deal’ Brexit scenario, according to a committee report. The External Affairs Committee found that while the Welsh Government has examined a number of scenarios they have not planned for a possible ‘no deal’ between the UK and the European Union. The committee is calling on the Welsh Government to examine the outcome’s effect on Wales and publish reports within six months. – ITV News UK exports in financial services jump to £95.7bn Britain’s exports in financial and professional services had a record-breaking year in 2016, according to figures released today by TheCityUK. Exports in the sector jumped 15.8 per cent from £82.6bn to £95.7bn, breaking away from four years of relatively sluggish growth, when exports edged up by 0.9 per cent each year on average. The UK remains the world’s top exporter for financial and professional services, with a trade surplus of £57bn, far ahead of the US, which has net exports of £31bn. The figures included exports in finance, insurance, accountancy, legal services, management consultancy and business services. – City A.M. Bank of England set to hold rates on Super Thursday The Bank of England is set to hold interest rates at 0.5 per cent on Thursday, but rate rises are forecast for later in the year. The bank’s Monetary Policy Committee (MPC) will vote on the rate on so-called Super Thursday, when the bank will also release its quarterly inflation report and release the minutes from the MPC’s last meeting. “With the pound at its highest levels since the Brexit vote against the US dollar MPC officials will be hoping that the 18 per cent gain from a year ago will start to have a downward effect on the headline inflation rate,” said Michael Hewson, chief market analyst at CMC Markets UK. – City A.M. Bank of England to raise rates twice this year, economists say – Times (£) Pay rises bigger than thought, tax payments show Britain’s wage growth may have been greater than previously according to an experimental study of tax data. Tax data suggests that pay rose by 3.1pc in the year to September, substantially stronger than the 2.3pc reported in official figures. The figures raise the possibility that wages may be rising more quickly than inflation, which stood at 3pc over the same period. It backs predictions by Bank of England policymakers that very low rates of unemployment are starting to force up pay growth as employers have to pay more to attract and retain staff. – Telegraph British Summer Time could be replaced with ‘Berlin Time’ as EU politicians vote on whether to scrap it British Summer Time could be replaced with ‘Berlin Time’ as EU politicians will this week vote on whether to scrap it for good. The proposal would end the British ritual of moving clocks forward by an hour in March and back again in October. MEP’s are debating the change after an ‘impact assessment’ indicated that there could be ‘negative impacts’ on health, agriculture and road traffic safety. The UK Government could block the move up until Brexit in March 2019, but ‘Berlin Time’ could be forced upon the UK during the transition period. Changing the clocks has already been dumped in some countries including Iceland, Belarus and Turkey, and if the change is implemented then London would be on the same time zone as Berlin for six months a year. The new European Parliament resolution states that ‘numerous scientific studies have failed to provide proof of any positive effect of the biannual clock change’. – The Sun Gerard Lyons: Don’t listen to the naysayers: The City is Brexit-proof and will remain the world’s financial hub The City of London is in a strong position to maintain its status as the world’s financial capital. Many of the City’s strengths are deeply embedded and therefore “Brexit-proof”. Moreover, London is in pole position to become the centre of global fintech. But we cannot be complacent. The international environment is competitive. The biggest challenge comes from New York, where the deregulation agenda aimed at improving its competitiveness that was talked about prior to the global financial crisis is now back on the agenda. While there are a host of niche financial centres in western Europe such as Zurich, Frankfurt, Luxembourg, Geneva, Paris and Dublin, none of these have the infrastructure or depth of market to challenge London. – Gerard Lyons for City A.M. Roger Bootle: Project Fear resurfaces in another misguided and ill-thought-out way Project Fear all over again. I hadn’t intended to write again about Brexit this week, for fear that readers may be suffering from Brexit fatigue. But a story appeared last week that an as yet unpublished document authored by government economists suggests that, whatever sort of deal we get out of the EU, in 15 years’ time the UK is going to be considerably worse off. It is time for 12 home truths. 1. The idea that the UK civil service or, for that matter, anybody else, can confidently opine about the economy in 15 years’ time is ludicrous. – Roger Bootle for the Telegraph (£) Matt Ridley: Bias against Brexit runs deep in Whitehall Last week saw political eruptions on either side of the Atlantic about a similar issue: whether government officials are neutral. The row over the leaked forecasts for Brexit, and whether civil servants were being partisan in preparing and perhaps leaking them, paralleled the row in America about the declassified Congressional memo on the FBI and Donald Trump. “Trump’s unparalleled war on a pillar of society: law enforcement”, said The New York Times. “Brexit attacks on civil service ‘are worthy of 1930s Germany’ ” said The Observer. To summarise, in London a government forecast that even a soft Brexit would be slightly worse for the economy than non-Brexit was conveniently leaked. This happened just as some politicians and commentators were trying to shift the country towards accepting a form of customs union with the European Union — that is to say, not really leaving at all. – Matt Ridley for the Times (£) Patrick Minford: More compliance. Lower productivity. Reduced growth. Why we must free ourselves from EU regulation One of the key issues in the referendum was the control of regulation in this country. Being in the Single Market means that essentially the whole of our economic lives comes under the control of the EU. In the future, because it is determined to become a federal state, that control could extend much further into these lives, and indeed well beyond. This control is entirely unnecessary for us to sell in the Single Market. All non-EU countries sell in it freely, provided they meet the requiered standards on the products that they sell in the EU, just as they must meet product standards on the products they sell in other economies. You export something to country X; you meet its product standards on your exports. So really the whole panoply of EU regulation over our whole lives is not needed for us to do business in the EU. It is simply up to the businesses that export there to make sure that they comply with product standards. – Patrick Minford for ConservativeHome Juliet Samuel: Brexiteers need to tell us why the customs union matters It’s 18 months since the country voted and – forgive me – I’ve forgotten what exactly Brexit is for. Judging by the loudest voices we’ve heard recently, led by Jacob Rees-Mogg, its main purpose is to inflict a wounding defeat on the Treasury and to discredit our Civil Service, an institution that used to be rather a source of British pride. This week the Cabinet will, supposedly, decide what kind of Brexit it wants. We will then learn whether it is an exercise in damage limitation and scapegoating or a political project intended to reshape the country. That we’ve had to wait this long to find out is, of course, shameful, but, as Sir Humphrey would say, we are where we are. – Juliet Samuel for the Telegraph (£) Iain Duncan Smith: The Establishment is lashing out against Brexiteers in the most disgraceful way It has always been the same: when the cosy consensus of the Establishment is challenged, the sound and fury from them becomes personal. “Those whom the gods would destroy they first make mad.” I wonder how many can recall how in 1981, 364 economists representing just such a vast cosy consensus attacked Mrs Thatcher’s economic reforms as essentially mad. How wrong they proved to be. Indeed, I remember well enough the attacks on those of us who had the temerity to oppose the signing of the Maastricht treaty in the early Nineties. As the Government sought to defend the extension of qualified majority voting, which stripped away our power to stop regulations which could damage the UK economy, we were attacked as idiots: mad, bad and dangerous to know. – Iain Duncan Smith MP for the Telegraph (£) Sam Coates: Threats are not what they seem In private Brexiteers realise that there are dangers in toppling Mrs May that are likely to outstrip the dangers to Brexit of keeping her there. A change of prime minister would not change the Commons arithmetic, the divisions among the parliamentary party or the complexity of the issues. They fear that it would not necessarily make it more likely that they would get the hard Brexit they desire. Sources in the European Research Group, whose 50 members back a hard Brexit, confirmed that there was no desire to get rid of Mrs May. They will continue instead to target Philip Hammond. Intriguingly, one source said that the group disliked David Davis even more. – Sam Coates for the Times (£) Brexit in brief The UK must not get left behind by China’s rise as a new superpower – Lord Green for City A.M. Google’s spat with the EU looks to be open-ended – James Titcomb for the Telegraph (£) Post-Brexit, Wales could boom as never before – Monima O’Connor for ConservativeHome We will get a good deal on Brexit – Lucy Allan MP for the Shropshire Star It will soon be too late to salvage the Brexit trade talks – Raphael Hogarth for the Times (£) Ministers set up ‘secret database to monitor Brexit preparations’ – PoliticsHome Brexit is being derailed by this lacklustre Government of Remainers – Telegraph letters (£) Global dealmaking boom with best start to year for two decades – Telegraph Swiss bank UBS chases the newly-rich in Britain’s regions – Telegraph Fears grow that South Korea is playing hardball as UK seeks to ‘roll over’ Brexit trade deals – Telegraph (£) Justine Greening warns Tories must listen to young people on Brexit – PoliticsHome Welsh ministers not prepared for no-deal Brexit, say AMs – BBC News ‘One size fits all’ Welsh rural policy warning – BBC News UK rents rise at slowest pace since 2013 as Brexit vote weighs – Reuters How one German city could be hit harder by Brexit than any other area in the EU – Telegraph (£) BoE deputy warns against ‘bonfire of the regulations’ after Brexit – FT (£) Fifty Shades star Jamie Dornan: Brexit keeps me awake at night – News Letter And finally… Just don’t mention Brexit! Tatler issues new 12-step guide to hosting a dinner party Around the dinner party table, no topic of conversation is usually off the menu. But according to society bible Tatler, if you want your evening to be a success then you must ban any mention of Brexit. The magazine has published a 12-step guide to hosting a dinner party – a social occasion it claims is making a ‘mighty, long-awaited comeback’. It says: ‘Until now it has never been acceptable to veto the conversation. But in these troubled times it is advisable to impose a Brexit moratorium. Nothing else is out of bounds.’ – Daily Mail