Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Theresa May promises free movement of EU citizens will end on Brexit day in March 2019… Theresa May has promised that freedom of movement for EU citizens coming to Britain will end on Brexit day in March 2019. Brussels had insisted free movement must continue to the last day of any transition period, meaning EU citizens would be free to settle in Britain until at least the end of 2020. But the Prime Minister has made it clear that changing the rules on migration as soon as Britain leaves the EU is a must for her in negotiations over the transition period, which begin next week. Speaking in China on the first day of a three-day trade visit, she said people “did not vote for nothing to change when we come out of the EU”. – Telegraph PM toughens talk on EU migrants during Brexit transition – The Times (£) Embattled May vows to fight EU demands amid Brexiteer unrest – Sky News …and declares she is a Brexit ‘believer’ backing Britain to prosper outside the EU… Under-fire Theresa May tonight declared she was a “believer in Brexit” and that Britain would have a “better economy” outside the EU. In comments that will delight seething Eurosceptics, the PM said growth figures since the Referendum proved the “sky hadn’t fallen in”. And she said: “I believe that outside the European Union we can not only project an image of global Britain but I believe we can see a better future for our economy.” It follows a revolt among furious Tory backbenchers who fear the PM has gone “soft” on Brexit after agreeing a ‘status quo’ transition deal with the EU. She has also refused twice in recent months to say she would vote Brexit in the event of a second EU Referendum. But challenged yesterday if “hand on heart” she believed in leaving the EU, she said: “Yes. At the time of the Referendum I voted Remain but I also said the sky wasn’t going to fall in if we left the EU.” – The Sun Senior minister ‘preparing to resign and denounce Theresa May from the backbenches’ – The Sun Tory grandee blasts Theresa May over Brexit and demands a clamp down on ‘squabbling back-seat drivers’ – The Sun PM must act now on housing, health – and spreading wealth from London – The Sun says Tory Brexit hard-liners ponder next move – Charlie Cooper and Annabelle Dickson for Politico …as Liam Fox vows to back May for ‘as long as she wants to lead’ but reportedly refuses to rule out staying in customs union after Brexit Government trade chief Liam Fox today vowed to support Theresa May “as long as she wants to lead the party”. He said he wished mutinous MPs could see how well the PM promotes Britain overseas – and how she is received in nations such as China. He insisted the Chinese – who have dubbed the PM “Auntie May” – view her differently to “some of the internal tea room discussions” in Westminster do. But he also risked infuriating Eurosceptics by refusing to rule out staying in a customs union after Brexit. He also admitted free trade deals will be “some time away” given Brexit the transition phase ends in December 2020. – The Sun Liam Fox: Post-Brexit trade deals ‘some time away’ – Sky News British beef back on menu after China lifts BSE ban – The Times (£) May’s visit should strengthen links between Britain and an increasingly global China – Richard Graham MP for The Times (£) Brexit bickering is an obstacle for Theresa May in China – Faisal Islam for Sky News Delays to no-deal bill ‘raise fears that May is going soft’… Theresa May has put the first legal preparations for leaving the European Union without a deal on ice, raising suspicions that she is clearing the way for a soft Brexit. Senior figures who support Brexit are already blaming the prime minister for commissioning new analyses showing that the economy would suffer whatever the means of departure. Tension over Britain’s destination outside the bloc is said to be at a critical level with a showdown in cabinet due over two days next week. Brexiteers want Mrs May to push for the maximum freedom from EU rules and to show that she will accept no deal unless Brussels agrees. News that Mrs May has delayed the first piece of legislation designed to prepare Britain for a such a scenario — by making sure British lorries can still travel on EU roads — will further inflame those Tories backing Leave. – The Times (£) …as it emerges Theresa May knew about leaked Brexit impact forecasts… Brexiteer ministers’ fury was mounting with Theresa May last night as it emerged she gave the green light to a controversial Brexit impact dossier. The PM knew about the bitterly contested work before Christmas, No10 aides have admitted. The study that shows any type of Brexit will harm the British economy was leaked on Monday. Critics see it as a plot to bounce leading Leave campaigners Michael Gove and Boris Johnson into agreeing to a softer Brexit… No10’s plan – orchestrated by Cabinet Secretary Jeremy Heywood – was for the Cabinet Brexit war committee to be shown the grim projections ahead of two crunch meetings next week. The Sun can also reveal that tensions among its 10 members will come to a head next week when it meets for two days in a row – Wednesday and Thursday – to thrash out the detail of Britain’s for a trade deal with the EU. A Cabinet source said: “The study is clearly an attempt to bounce Michael and Boris into accepted close EU alignment. It’s disappointing that the PM allowed projections as flawed as this to go ahead.” – The Sun 10 questions for Jeremy Heywood to answer – Guido Fawkes …which Ministers will now hand to Brexit Committee after Commons debate Ministers will be forced to publish a secret study on the impact of Brexit after the details of what it contains were leaked. Labour won a vote in Parliament to reveal details of the analysis after the Government chose not to contest it. Brexit minister Steve Baker said he was doing so on the “exceptional basis” of “poor reporting” on the document. But he warned: “It does not set any precedent for future action.” …The Prime Minister’s spokesman said on Wednesday: “Whatever is published will be the partial unfinished document that was leaked. When the full analysis is complete that will be published ahead of a meaningful vote.” – Sky News Ministers agree to show MPs the leaked Brexit report – BBC News US trade deal won’t make up for the cost of losing EU migration, Brexit impact analysis reportedly says – Telegraph Philip Lee’s Tweets make no sense – Guido Fawkes Brexiteers are tired of receiving doom-laden predictions – Express editorial > Patrick Minford on BrexitCentral today: Whitehall’s leaked Brexit forecasts are clearly based on outdated trade models Hague criticises Adonis call for second Brexit vote as EU Withdrawal Bill passes Lords Second Reading A second EU referendum on the terms of Brexit would plunge Britain into a “long and bitter” political battle that should at all costs be avoided, Lord Hague of Richmond warned yesterday. The former Conservative Party leader was responding to a demand by Lord Adonis, the Labour peer, for a fresh vote on the terms of Brexit during the second day of debate in the Lords on the government’s withdrawal bill. He warned that pledging to give the country a second say on the terms of a Brexit agreement would create a “referendum merry-go-round” that would damage the national interest. “We could have made a success of the UK in the EU and we can make a success, with some cost and upheaval, of being outside the EU,” Lord Hague said. “But we cannot possibly make a success of being in a national state of bewilderment about when we’re going to have another referendum and which direction we are going in.” – The Times (£) > Highlights from Day Two of the House of Lords Debate EU threatens sanctions to prevent Britain diverging after Brexit… The EU is threatening sanctions to stop Britain undercutting the continent’s economy after Brexit, including “tax blacklists” and penalties against state-subsidised companies, according to a leaked strategy paper. The measures, outlined in a presentation to EU27 member states last week, show the bloc wants unprecedented safeguards after the UK leaves to preserve a “level playing field” and counter the “clear risks” of Britain slashing taxes or relaxing regulation. Brussels describes the UK economy as too big and too close to treat like a normal trade partner and wants to define new ways to enforce restrictions on taxation, state aid, environmental standards and employment rights… Noting such strict curbs do not feature in standard trade deals, the EU paper argues innovative mechanisms will be needed to keep the UK in check, either through conditions in a trade agreement or separate retaliatory measures. – FT (£) …as Jean-Claude Juncker admits EU could ‘crack’ and give UK a better deal In candid remarks the EU Commission chief said pressure from big businesses on the continent will drive a wedge between member states. He predicted that individual countries will start squabbling over where to allow the UK ongoing access to the Single Market. His comments will come as a huge boost to British negotiators who are trying to pick apart the bloc’s opposition to “cherry picking”. Mr Juncker insisted he wants Britain to be a “privileged partner” of the club, but also issued a coded warning to Theresa May to stop dithering over her position on trade. He said: “It will be more difficult to keep together the 27 EU member states during the second step of the negotiations because the economic industries, the multinationals, will try to convince their respective governments to say yes to this or that British proposal.” The EU chief predicted this would lead to “several extras, several exceptions” for the British “that will make Europe a mess”. – The Sun Surge in UK services growth as UK-EU financial services trade jumps despite Brexit The EU was the fastest growing partner for trade in British services during 2016, with companies’ increased use of financial services at the vanguard of record growth, according to government data published today. UK imports of services rose by £5bn in 2016, according to the most up-to-date data from the Office for National Statistics (ONS), although that was less than the £9.2bn increase in exports. Financial services products used by foreign firms made the largest contribution to the rise in exports in 2016, increasing from £14.9bn in 2015 to £18.4bn, the ONS said… Overall services imports and exports to all countries surged to record growth during the year, the ONS said. Exports excluding transport, travel, and banking rose from £123.2bn in 2015 to £142.7bn in 2016, an increase of 15.8 per cent. Services account for the vast majority, almost four-fifths, of British output. – City A.M. City lashes out as EU rebuffs proposal for Brexit deal on financial services… City bosses have warned the EU not to “play politics with people’s jobs”, after the bloc rebuffed specific plans put forward by firms to include the sector in a Brexit trade deal. UK financial firms have drawn up proposals that would see frictionless trade in financial services across borders continue after Brexit. The so-called ‘mutual regulatory recognition’ plan would enable firms on both sides of the Channel to retain market access, providing there were no major differences in regulation. But Brussels has rejected the proposal, according to a Reuters report citing City sources who have met with EU officials to discuss the plans in recent weeks. – Telegraph EU rejects Brexit trade deal for UK financial services sector – FT (£) …while EU reportedly mulls ‘pay per access’ for financial services post Brexit instead The U.K. could pay for its financial services sector to access the single market post Brexit, according to six EU diplomats familiar with an idea floated in Brussels by a northern European country. Although it has not yet been discussed formally by diplomats formulating the EU27’s negotiating position, the idea will offer hope to British negotiators desperate for a sign that national officials are willing to be more pragmatic about the Brexit talks than the European Commission and the EU’s chief negotiator Michel Barnier. – Politico EU will build itself a new €155 million conference centre – with taxpayers to foot the bill European Union officials will spend at least £136 million on building a new conference centre as part of plans to transform Brussels’ “euro district” into a gleaming architectural advert for the EU. Despite the EU facing a budget blackhole of £13 billion a year after Brexit, the European Commission will use taxpayers’ money to foot the bill, which does not include VAT… Ashley Fox, the leader of Conservative MEPs, said: “I fear it is another example of the EU being irresponsible with public money. No one wants to see another unnecessary vanity project in Brussels when the money could be better spent on helping small businesses, research and innovation.” The commission already has the Centre de Conference Albert Borschette, as well as access to numerous other buildings in the EU district. – Telegraph (£) Allister Heath: The technocrats want you to believe our world is too complex for democracy. Resist them Today, it is the post-liberal, supposedly centrist chattering classes that are leading the charge: devastated by Brexit, many openly argue that voters are too stupid or prejudiced to be trusted with our country’s future, and that real power should be held by a small cadre of officials, quangocrats or “independent” bodies. An independent Bank of England is not enough; we now need to “depoliticise” everything else, including the NHS, to make sure it is safe from the public. Brexit was meant to be the ultimate repudiation of such a technocratic nightmare, but it has become increasingly clear that Theresa May’s Government is about to flunk a once-in-a-lifetime opportunity to reset British democracy. Instead, the bureaucrats are back in the driving seat, with their inane, question‑begging “forecasts”, telling us that the only possible Brexit is one where we continue our slow slide into nothingness. Yes, democracy is flawed and trusting the people is risky, but the alternative is elite rule, which is even more dangerous. There is no one to guard the guardians, who are thus never held to account, even when they trigger financial crises and wars. – Allister Heath for the Telegraph (£) Nick Timothy: Toppling Theresa May would put Brexit in critical danger. That is the bottom line Frustration among some Conservative MPs that things are not straightforward is understandable. They know the country wants change, they worry about Labour’s extremism, and they want the Tories to feel optimistic again. But a change of leadership – as some MPs secretly advocate – cannot deliver a better Brexit and would not mean a radical policy agenda. In fact, a change could destroy the Brexit negotiations, destabilise the Conservative Party, and delay – perhaps render impossible – serious reform. Whoever is prime minister, the political facts of life will not change. There will be a minority government. The Conservatives will be divided on Europe. And Whitehall will be swamped as it handles the complexity of our departure from the EU. – Nick Timothy for the Telegraph (£) Bill Wiggin: A Brexit implementation period might be acceptable – but only if it is strictly time-limited Such an implementation period also carries a great risk. It must never become a tool through which those who seek to derail Brexit, or push for a Brexit which looks exactly like membership of the European Union, can achieve their ends. To counter this risk, I believe there are two conditions on which such an implementation period must rest. The first is that it must be strictly time-limited. Not only does this ensure certainty for business, it calms the fears of those who could see the ‘implementation period’ becoming a semi-permanent state where we continue to live under EU rules and regulations, but with no say in their creation or enforcement. The second condition is that trade negotiations with the EU must be completed before the beginning of the implementation period. There is no value in an implementation period if there is nothing to implement. – Bill Wiggin MP for ConservativeHome Asa Bennett: The leaked Brexit report shows the need for Theresa May to get a grip on Whitehall Brexiteers can be justifiably concerned if officials have been quietly pulling together their own research casting the Government’s flagship policy in poor light. It has been drawn together in utmost secrecy, with most ministers only knowing about the analysis when Sir Jeremy invited them last week to be briefed on its findings. The first time Brexit ministers including Mr Davis saw them was when they had been leaked to Buzzfeed, his deputy told the Commons. It is hard to imagine a minister slipped it out if they only knew about the document that late, which leads one to suspect officials were going rogue… Sir Jeremy Heywood may sit next to the Prime Minister at the cabinet table, but that does not mean he does her job. Mrs May should make sure he doesn’t forget that. – Asa Bennett for the Telegraph (£) Christian May: The reality of trade will intrude on EU politics Data released yesterday by the Office for National Statistics revealed a significant spike in UK-EU services trade in 2016, to record levels. Imports of services from the EU to the UK shot up, as did exports of UK services to the EU. Given this backdrop, the briefings from EU officials yesterday that there’s “no way they’ll do a deal covering services” sounded particularly out of tune with reality. European businesses currently raising capital in London, drawing on the expertise of its legal services or relying on its market infrastructure may well wonder on whose behalf these EU officials are speaking. We should not be surprised that the European Commission sticks to its line that financial services will fall outside the scope of any trade deal, but we shouldn’t treat such rhetoric as a benign statement of fact, either. It is a negotiating position, and one that will be sorely tested by the interests of EU member states and their constituent economies in the coming months. – Christian May for City A.M. Shanker Singham: What’s the point of Brexit? For some, Brexit is about damage limitation. For others, myself included, it is about seizing the opportunities presented by our withdrawal from the EU. Continued membership of the Single Market and Customs Union limit these opportunities, and as such they are key features of the damage limitation playbook. If we are serious about honouring the result of the referendum we need to turn our attention to the opportunities before us, and consider how we can capitalise on them. – Shanker Singham for CapX Ambrose Evans-Pritchard: Europe’s civil wars will blow away the Treasury Brexit forecast Since the Treasury toys with raw speculation on Britain in the early 2030s, let me counter with raw speculation that the EU will either have torn itself to pieces by then, or will have evolved so obviously into an authoritarian Caesaropapist construction that it will no longer command emotional loyalty from Western liberals. Either way, it cannot prosper, so it is perfectly plausible that Britain will – by breaking free early – enjoy an 8pc gain in output relative to the status quo trend line of being shackled to this EU enterprise. The eurozone is currently enjoying a cyclical recovery driven by negative interest rates, QE a l’outrance, the end of fiscal austerity, and a catch-up effect from the Long Slump – deeper for Southern Europe, Ireland, and Finland, lest we forget, than during the Great Depression. Germany has permitted the European Central Bank to operate as a lender-of-last resort since the summer or 2012, when contagion to Italy and Spain almost blew up monetary union. This matters enormously but the euro nevertheless remains an orphan currency with no fiscal union or genuine banking union to back it up. The North-South chasm in competitiveness has not been closed. – Ambrose Evans-Pritchard for the Telegraph (£) Brexit in brief The Brexit vote may be the first shot fired in a British culture war – Rob Ford and Maria Sobolewska for the Telegraph (£) Britain needs the optimism of Trump or Macron – Iain Martin for The Times (£) British Conservatism and the politics of Brexit – Paper by Alan Sked for Global Britain French student who took knife to nightclub walks free as ‘he was scared to live in Britain after Brexit vote’ – Telegraph Post-Brexit destination of EU medicines regulator thrown into doubt as Italy launches appeal – Telegraph (£) Catalonia independence bid has been betrayed, says Carles Puigdemont – The Times (£)