Brexit News for Thursday 12 October

Brexit News for Thursday 12 October
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Theresa May promises £250m for no deal preparations as Cabinet colleagues hit out at Philip Hammond…

Philip Hammond is facing anger from cabinet colleagues after he went further on his vow to prevent unnecessary spending on preparations for Britain to leave the EU without a deal. Theresa May tried to reassure her MPs at prime minister’s questions by saying that the chancellor would commit £250 million of new money to help with Brexit preparations… She stepped in after Mr Hammond told MPs on the Treasury select committee that he would not release cash to prepare Britain for the consequences of crashing out of the EU until the “very last moment”… His remarks raised objections from cabinet colleagues, already irritated by his article in The Times yesterday in which he said it would be irresponsible to spend taxpayers’ money now. One remain-backing cabinet source said: “His intervention was completely unnecessary. He did not need to go into the specifics that he did… and frankly it was not helpful.” – The Times (£)

Taxpayers’ money will not be spent on preparing for a “no-deal” Brexit until the “very last moment”, Chancellor Philip Hammond has suggested… The chancellor, who has been accused of being too pessimistic about Brexit, told the Treasury committee of MPs a “cloud of uncertainty” over the outcome of negotiations was “acting as a dampener” on the economy… Theresa May was pressed on the issue at Prime Minister’s Questions, in which former Tory leader Iain Duncan Smith sought assurances “all necessary monies” would be spent preparing for a no deal outcome. “Where money needs to be spent it will be spent,” the prime minister replied, adding that government departments would be given an extra £250m this year to prepare for a range of Brexit outcomes. – BBC News

  • Theresa May slaps down Chancellor and approves £250m for no-deal prep – The Sun
  • Hammond refuses big spending on ‘no deal’ Brexit for now – FT (£)
  • Philip Hammond won’t budget for Brexit ‘no deal’ – Politico
  • Philip Hammond blasts no deal as ‘irresponsible’ and won’t budget for it – Express
  • Tory splits open after Theresa May ‘slaps down’ Philip Hammond over no deal – Independent
  • Cabinet rift over getting Britain ready for a Brexit ‘no deal’ – The i
  • Hammond to set out Brexit spending breakdown ahead of budget – Guardian
  • Interview: Oliver Letwin says the Brexit talks could well fail – and every minister must prepare for this – Andrew Gimson for ConservativeHome

…after the Chancellor claims flights between EU and UK could be suspended on Brexit day

The Chancellor said that while highly unlikely there is a possibility that if the UK leaves without a deal there could be no “air traffic” on March 29, 2019. He said: “It is theoretically conceivable that in a no deal scenario there will be no air traffic moving between the UK and the European Union on the 29th March 2019. But I don’t think anybody seriously believes that that is where we will get to… On that specific point it is very clear that mutual self-interest means that even if talks break down, even if there is no deal, there will be a very strong compulsion on both sides to reach agreement on an air traffic services arrangement.” – Telegraph (£)

  • All flights between Britain and Europe could stop the day after Brexit, Chancellor claims – The Sun
  • Philip Hammond: Brexit has left Britain’s economy under ‘cloud of uncertainty’ – FT (£)
  • International banks could decide to move City jobs early next year, warns Treasury official – Telegraph
  • Hammond shoots down idea that no-deal Brexit means no-fly zone: ‘theoretically possible’ but not serious risk – Bloomberg

David Davis and Michel Barnier to sum up state of talks today…

Brexit Secretary David Davis and the EU’s chief Brexit negotiator Michel Barnier are expected to sum up the state of negotiations on the UK’s departure from the union later. The fifth round of talks – the final discussions before a crucial EU summit on 19 and 20 October – are due to end… Both EU and UK teams have said the ball is in the other side’s court this week – implying that it is the other side that has to make the next concession. – BBC News

> Richard Tweed on BrexitCentral today: David Davis should announce UK withdrawal from the negotiations unless the European Council consents to trade talks

…as Hammond calls for a rapid response from the EU on a transitional deal…

Philip Hammond has called for a rapid response from the EU27 to the prime minister’s offer of a transition deal, and even warned that there could be no air traffic between the UK and the EU if no exit deal of any kind could be agreed. The chancellor underlined the “need for speed” in agreeing the outlines of the transition, expected to cover around two years, which is aimed at giving businesses and the government time to adjust to the post-Brexit world… His main emphasis was to argue that business wanted to know that a transitional deal would be in place soon, describing it as a “wasting asset”, which will be less valuable the longer it takes to agree. – Guardian

> Martin Howe QC on BrexitCentral today: The legal ins and outs of implementation periods: avoiding the negotiation noose

…with Germany, France and Romania refusing to budge on Barnier’s negotiation mandate…

Senior officials said it is extremely unlikely that EU leaders will agree to adapt the legal framework they handed down to the Frenchman so that he can begin talks on a transition. Mr Barnier is said to be frustrated with the limitations of his mandate and recently told a meeting of prominent MEPs he has the “resources” to begin scoping the future partnership immediately but is being “restricted legally from doing so”. The Frenchman is believed by some to have privately come to the conclusion that the talks will remain deadlocked over certain issues, including the Brexit bill, until he is allowed to offer Britain an olive branch. He is widely reported to have asked the member states to allow him to start trade talks with Britain at recent top-level meetings, but has failed to secure the unanimity required to forge ahead so far. The Frenchman is believed to have earned the support of “almost all” EU countries for his compromise position but has been rebuffed by hardliners France, Germany and Romania. – Express

  • Disunity in the British and EU camps is hampering Brexit talks, but everyone should be able to agree on the need for a transition after March 2019 – Times editorial (£)

…despite leaked German strategy document showing Germany favours UK banks keeping transitional EU access

Germany wants the European Union to be prepared to grant U.K. financial companies transitional access to the EU if the Brexit process drags on, according to a government strategy document. With the clock ticking toward Britain’s exit day in March 2019, the proposal by the Finance Ministry in Berlin says the EU should let member governments offer market access to British banks on a reciprocity basis for a transitional time. No mention is made of requiring U.K. banks to be domiciled in Europe, potentially removing a key obstacle at least temporarily… Without specifying a transition period, it says legal issues arising from Brexit that need to be addressed include “national transition arrangements in the area of market access for British institutions to the EU/Germany.” – Bloomberg

  • German economy minister says Europe will “be the winner” from Brexit – Politico

Tory rebels claim May will make concessions over ‘Henry VIII’ powers in EU Withdrawal Bill

Theresa May is likely to agree to a new parliamentary committee to help weed out excessive use of Henry VIII powers after Brexit as she seeks to head off a rebellion, according to Tory MPs pushing for the change. Several Conservative supporters of the idea told the Guardian they believe the prime minister will back down on the issue because she cannot risk losing a vote when the EU withdrawal bill returns to the House of Commons later this month. The amendment, signed by 15 Conservative MPs along with a number of Labour colleagues, has a chance of passing because of May’s slim parliamentary majority of 13 aided by the DUP. – Guardian

Jeremy Corbyn refuses to say whether he would vote for Brexit at a second EU referendum…

The Labour leader campaigned for Remain but he has joined Theresa May in refusing to be drawn on whether he would now switch his vote. Mrs May repeatedly refused to say on Tuesday whether she would vote for Brexit in a second poll as she dismissed the question as “hypothetical” and insisted there will not be another referendum. A spokesman for Mr Corbyn echoed a similar sentiment, telling reporters after Prime Minister’s Questions: “Jeremy campaigned for Remain or reform and he is committed to what he said in that campaign. There is no other referendum. We respect the result of the referendum so we want to be part of these negotiations.” – Telegraph (£)

  • Jeremy Corbyn follows Theresa May in refusing to say he would back Brexit in a second EU referendum – The Sun

…as Remain-supporting Cabinet ministers also refuse to say if they would support Brexit in new referendum

Two Cabinet ministers who backed Remain said they would now vote Leave. At least five Cabinet ministers who backed Remain refused to say how they would vote in a referendum today. Another 11 – all Remain supporters – refused to respond to the Telegraph’s questions. Five other Cabinet ministers who voted Leave – Priti Patel, David Davis, Andrea Leadsom, Liam Fox and Michael Gove – all said they would still vote to leave the EU… Elizabeth Truss, the Chief Secretary of the Treasury who previously supported Remain, told the BBC’s Daily Politics: “All of us had to make a judgement on what we thought the future would look like. “I made a judgement thinking it would be bad for the economy. Since we have left it has been more positive, so the facts have changed and I have changed my mind.” – Telegraph (£)

  • Remain ministers split on how they would vote in second Brexit vote – The Times (£)
  • Truss: I would now vote Leave – Guido Fawkes
  • Remainer Cabinet ministers Liz Truss and Jeremy Hunt have ‘changed their minds’ about Brexit and now back Leave – Express
  • How can Theresa May manage Brexit after telling everyone her heart isn’t in it? – Tom Harris for the Telegraph (£)

London retains crown as top spot for attracting business and talent

London has retained its number one spot as the best major city in the world for attracting businesses and talent, according to an influential ranking published today. The ranking, carried out by academics from top global universities for Japan’s Mori Memorial Foundation, shows the capital extending its lead, based on 70 factors ranging from the economic output per person to the ease of commuting… London’s dynamic economy was again a crucial factor in securing the top position, driven by the strength of the financial services industry. The capital topped the latest Global Financial Centres Index, published last month by the China Development Institute and think tank Z/Yen. The city’s economy will continue to grow above the average for other European cities, according to separate forecasts by Oxford Economics. – City A.M.

Europe’s nuclear trade body pushes for swift ‘Brexatom’ deal with UK

Europe’s nuclear trade body has said it sees no reason why the UK cannot quickly sign a nuclear deal with the EU after Brexit which mirrors agreements the bloc already holds with the US and Japan. Foratom, which is based in Brussels and represents nearly 800 nuclear firms across the EU, said it “absolutely” wanted to maintain close links with the British nuclear industry, even after its departure from the European Atomic Energy Community (Euratom). – Telegraph

UK and EU formally inform WTO of post-Brexit tariff quota plan

Britain and the EU have formally informed members of the World Trade Organisation how they plan to split up the EU’s tariff quotas and farm subsidies after Brexit in a plan already rejected by the White House. In a joint letter, the two parties, who are involved in intense negotiations over Britain’s departure from the EU, said they had come to an agreement on a key aspect of trading relationships with the rest of the world after Brexit… The White House and others say the method the UK and the EU propose is unfair, because it would allow them to reduce their obligations as WTO members. – Guardian

European Court of Justice ‘can veto Brexit deal’, warns former judge

The European Court of Justice will have the power to strike down any Brexit deal between Britain and Brussels, MPs were warned yesterday. Sir Konrad Schiemann, who was Britain’s representative on the court until 2012, told the Commons Brexit committee that any agreement would be open to legal challenge at the ECJ even if both sides agreed the deal. He warned that if it ruled the agreement to be illegal under European law both sides would have to renegotiate. – The Times (£)

Liam Fox: our new board of trade will ensure everyone prospers from Brexit

Free trade reduces poverty and generates wealth across the globe, which in turn underpins political stability and security, especially in developing countries. Here in the UK it will create jobs, increase our prosperity and help drive down prices of everyday goods. I am determined that these benefits are enjoyed by everyone, wherever they live. So today I’m launching a new board of trade to ensure every part of the UK can prosper as we increase our trade with the world. The board will bring together leading figures from business and politics from all four nations – England, Scotland, Wales and Northern Ireland. It will meet four times a year, rotating around the UK to guarantee businesses in every region have the chance to raise the issues that matter most to them. The board’s members and advisers will have a clear objective. To make sure British companies can seize the opportunities that come with leaving the EU, and have the support they need to boost exports and become successful global companies. – Liam Fox MP for The Times (£)

Telegraph: The Government must disprove the impression that its Brexit plans are in disarray

So some 16 months after the referendum, Britain’s three most senior political figures either publicly disavow Brexit, or appear not to have decided what they want to do with it. Faced with this, the apparently irrational strategy of Angela Merkel and Emmanuel Macron begins to make sense. When your opponent appears in disarray, you do not let up the attack. Instead, you press for maximum advantage. In Berlin and Paris, Brexit negotiators look out across the Channel and think they see a trinity of timidity. They must be proved wrong… One way forward may be for the Prime Minister to take some reinforcements to next week’s crucial summit… Why should the Prime Minister not take a willing ally of her own, one who has no problems advocating Brexit and the benefits it can bring this country? After all, it’s not unusual for foreign secretaries to attend foreign summits. – Telegraph editorial

Tom Goodenough: Philip Hammond’s Brexit no-deal bind

Hammond did admittedly concede that there may be a time when preparing for ‘no deal’ is worth spending money on… The fault with this approach is that if, come January, the Treasury does suddenly allocate funds to preparing for no deal, it will look panicked and rushed and do little to reassure those worried about Brexit. Better the government adopts a gentler approach now than a sudden change of tact in the new year. As David Jones, the former Brexit minister has pointed out, if no money is allocated to this scenario in November’s Budget it will leave the UK ‘scrambling’ to cope. The Chancellor is no stranger to ripping up a Budget announcement but his mistake here is being so explicit at ruling out something he should include. – Tom Goodenough for the Spectator

  • Ensuring we are Ready on Day One for any Brexit scenario is the smart thing to do – Charlie Elphicke MP for ConservativeHome

Asa Bennett: The EU elite assumes Theresa May will take any Brexit deal. She must shatter their illusion

Mrs May should have learned from Mr Cameron’s failure, and do all she can to ensure the prospect of Britain leaving without a deal seems not just credible, but feasible. Ambiguity about Britain’s readiness, encouraged today by Philip Hammond’s reluctance to back spending on “no deal” preparations, is deeply unhelpful. Her refrain – “no deal is better than a bad deal” – should be delivered by her ministers as if it was self-evident. Any reluctance they show merely emboldens Brussels’ negotiators – Asa Bennett for the Telegraph (£)

  • UK’s ‘no Brexit deal’ threat falls flat – James Randerson for Politico

Jack Tagholm-Child: Philip Hammond’s pessimistic attitude is risking a good Brexit deal

He does not see Brexit as an opportunity for the UK, simply a disaster to be mitigated as much as possible… Being prepared for a No Deal outcome would be one of the UK’s best cards at the negotiating table. Having a credible threat the UK can and will walk away from the negotiating table, if the EU continues to be unreasonable in its demands, is one of the best ways to ensure a No Deal outcome is avoided. – Jack Tagholm-Child for Reaction

Allister Heath: From Brexit to Barcelona, liberal elites have lost faith in self-determination

The trendy, right-on classes now seem to oppose all independence movements. In the Fifties and Sixties, young idealists took to the streets to defend the right of the ex-colonies to break free of the imperialist yoke. Today, those who see themselves as their political heirs spend their time decrying “nationalists” and cheering on those who threaten to ruin the secessionists. Take Brexit, Kurdistan and Catalonia: people who believe themselves to be progressive and enemies of oppression reflexively back the status quo. Big is beautiful; small is seditious… In such a hostile climate, those entrusted with pushing through Brexit need to be passionate, competent and as hard as nails… Crazily, neither Theresa May, Damian Green nor, of course, Philip Hammond can bring themselves even to say that they back Brexit, despite it being their policy… Mrs May, assuming that she stays in office, must therefore urgently involve more Brexiteers. Boris Johnson should accompany her to the negotiations, to stiffen her resolve, and a newer generation needs to be promoted. – Allister Heath for the Telegraph (£)

  • Rajoy offers Catalans way out of independence crisis with offer of greater autonomy – The Times (£)
  • I hope Catalonia stays with Spain, but I support its right to leave – Owen Jones for the Guardian

Brexit comment in brief

  • Brexit is good news for Britain, America and the special relationship – Owen Paterson MP for CapX
  • It takes two sides to agree a divorce – the EU needs to play ball over Brexit too – Hamish McRae for the Independent
  • Why free trade doesn’t require regulatory harmonisation – Simon Gordon for CapX
  • Be warned, Brexiteers – I know better than most the consequences of breaking a promise – Nick Clegg for The Times (£)
  • Brexit negotiations part 1: A tragicomedy in 5 acts – Charlie Cooper for Politico
  • Britain’s last EU Commissioner Julian King’s poison portfolio – Giulia Paravicini for Politico

Brexit news in brief

  • No-deal Brexit would be ‘devastating’ for Ireland, says former Irish PM – Sky News
  • UK treatment of EU workers ‘a blight’ on the nation, says CBI – Telegraph
  • Number of Romanians and Bulgarians in UK rises to 413,000 – Guardian
  • Farm profits may halve after Brexit, says report dismissed by Government as “based on highly unlikely scenarios” – BBC News
  • ‘Hard Brexit’ would cost UK $15,000 per person, claims Rabobank – Bloomberg
  • House buying enquiries at weakest since aftermath of Brexit vote, say surveyors – Independent
  • Trump set to meet Queen in downgraded UK visit – The Times (£)
  • Donald Trump ‘set to visit Britain within months – but he’ll keep a low profile and won’t stay with the Queen’ – The Sun
  • Ukip leadership loser Anne Marie Waters will start new far-right party – The Times (£)
  • Nicky Morgan says she banned discussion of Brexit from Christmas dinner – Guardian