'Difficult' Brexit backstop talks see no breakthrough: Brexit News for Thursday March 7

'Difficult' Brexit backstop talks see no breakthrough: Brexit News for Thursday March 7
Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team

‘Difficult’ Brexit backstop talks see no breakthrough…

Brexit negotiations “have been difficult” and “no solution has been identified” to the Irish backstop, the European Commission has said. It comes after the latest talks between UK ministers and EU Brexit negotiator Michel Barnier in Brussels. Commission spokesman Margaritis Schinas said the talks had taken place in a “constructive atmosphere” but there had been no breakthrough. Mr Schinas was speaking after Mr Barnier briefed the European Commission’s weekly meeting on the state of Brexit talks. Speaking after talks with Mr Barnier, the UK’s Attorney General Geoffrey Cox said: “Both sides have exchanged robust, strong views. We’re now facing the real discussions. Talks will be resuming soon.” He added: “We’re into the meat of the matter, we’ve put forward very reasonable proposals.” – BBC News

  • Brexit talks fail to make breakthrough on Irish backstop, says EU – Belfast Telegraph
  • Brexit talks in stalemate as UK and EU negotiators clash – Guardian
  • Brexit negotiations in crisis as London and Brussels admit talks have been ‘difficult’ – iNews

> WATCH: Geoffrey Cox says the UK and EU are “constructively engaging” on negotiations

…as the UK is given 48 hours to table new proposals that would be acceptable to the EU

The UK has been given 48 hours to table fresh proposals to break the Brexit impasse, EU diplomats have been told. EU officials said they would work non-stop over the weekend if “acceptable” ideas were received by Friday to break the deadlock over the Irish backstop.  The UK has said “reasonable” proposals to satisfy MPs’ concerns about being tied to EU rules had already been made. There have been few visible signs of progress ahead of Parliament’s second vote on the Brexit deal next Tuesday. Diplomats from the 28 member states were told on Wednesday that Mrs May could meet European Commission President Jean-Claude Juncker on Monday if progress was made. But the BBC’s Europe reporter Adam Fleming said talk of a 48-hour deadline for new proposals and a weekend of negotiations was “a notional timetable” and that more flexibility could be possible. – BBC News

Here are the two new ideas Geoffrey Cox presented to the EU

The UK is still looking for ways to change the substance of the Brexit deal agreed with the European Union despite having been repeatedly told that the withdrawal agreement cannot be reopened, according to a diplomatic note seen by BuzzFeed News. The note is of a briefing made to the ambassadors of the EU’s remaining 27 member states on Wednesday afternoon following yesterday’s meeting between the UK’s attorney general, Geoffrey Cox, Brexit secretary, Steve Barclay, and the EU’s chief Brexit negotiator, Michel Barnier. Tuesday’s meeting is described in the note as “negative.” It states that Cox, who is leading the talks for the UK side, presented the idea of an “arbitration panel” that would determine if the two sides were acting in good faith and were being reasonable in their efforts to identify alternative arrangements to the backstop — the insurance policy that guarantees that there can be no hard border between the Republic of Ireland and Northern Ireland in all circumstances. Cox also proposed the concept of a new “mini backstop” that would limit the mechanism to only cover elements that relate to border infrastructure. Both ideas were rejected by Barnier. “[Barnier] requested fresh drafting,” the note read. The diplomats were told that the arbitration panel as suggested by Cox was an attempt to lower the bar for exiting the backstop by introducing notions such as “reasonableness.” The note states that the UK is in essence “questioning the legal stability of the backstop” and is trying to find a “legal solution to a political problem.” – BuzzFeed News

Downing Street insists next week’s meaningful vote will go ahead nonetheless…

Downing Street has insisted the meaningful vote on Theresa May’s Brexit deal will go ahead as promised on Tuesday, despite negotiations in Brussels stumbling. The prime minister’s spokesman repeated the line on Wednesday that the government is determined to secure “legally binding changes” to the Irish backstop, despite the attorney general, Geoffrey Cox, returning empty-handed from the talks. Shortly before leaving Brussels, he conceded “strong views” had been expressed during three hours of “robust” discussions. Downing Street said the talks had been “difficult”, but stressed the vote would take place on Tuesday, as committed by May. If it is lost, MPs will vote on successive days on whether to block a no-deal Brexit and whether to extend the departure date. With it increasingly being assumed No 10 will not secure significant EU concessions on the backstop, May is expected to try to sell her plan to MPs and the public later in the week, potentially with a speech. There are no plans as yet for the prime minister or Cox to return to Brussels, but it is understood this could happen if required. Sunday night is the final deadline for any changes, as the government needs to publish and print copies of deal documents on Monday, and publish the motion MPs will then vote on. – Guardian

  • Desperate 11th hour Brexit talks near collapse in Brussels after bitter clash between Attorney General and Michel Barnier – The Sun

…although May’s deal ‘will be defeated by 100 votes’, ministers believe…

Theresa May’s Cabinet is resigned to her Brexit deal being defeated by up to 100 votes next week after talks in Brussels collapsed without progress on Wednesday. Downing Street is already making plans for a third “meaningful vote” on the deal on the assumption that Tuesday’s vote is lost, and Mrs May is considering making a major speech on Friday to plead for support from MPs. One minister said it appeared “certain” that the Commons vote on the Brexit deal will be lost, and that Mrs May’s next move would depend on the scale of the defeat. Meanwhile the Chief Whip, Julian Smith, has warned MPs their Easter break could be cancelled if Brexit is delayed, adding to the growing sense of inevitability that the Government will lose the vote. If Brexit is delayed until June, the most likely date, MPs would only have three months to find a new way forward and could ill afford their 18-day holiday. Mrs May was defeated by a record majority of 230 when MPs voted on her Brexit deal in January, and her advisers believe that if she can limit the defeat in the next vote to a majority of fewer than 60 she would stand a chance of winning a third vote. However, some ministers believe the margin of defeat will be as high as 100 votes, leaving the Prime Minister in “serious difficulty”. – Telegraph (£)

  • Cabinet resigns itself to May’s Brexit deal being heavily defeated next week as talks with Brussels end in deadlock – Daily Mail

…as Government sets up Brexit advisory groups to find alternative arrangements for Irish border

Both pro-Brexit and pro-EU supporters in May’s Conservative Party have backed a proposal to find alternative arrangements to the backstop and Britain’s Brexit department said it would establish three advisory groups as part of a joint UK-EU effort to develop these.  “There is clear support for finding alternative arrangements to ensure there is no hard border on the island of Ireland,” a spokesman for the Brexit department said. One advisory group will consist of technical experts in trade and customs, which will look at advanced use of IT systems and “cutting-edge technologies”. The others will be a business and trade union engagement group and a parliamentary engagement group.  The pursuit of alternative arrangements is a particular demand of eurosceptic MPs in May’s party who strongly opposed her deal but have suggested they could be persuaded to back an amended agreement if the backstop was only temporary or Britain could exit it unilaterally. – Reuters

Remainer Lords defeat the Government with bid to enforce a permanent customs union with the EU

A cross party group of peers lead by Labour pushed through the soft Brexit bid with an amendment to the Trade Bill, winning by 207 v 141. The defeat is a major new headache for Theresa May. The PM will try to ask MPs in the Commons to overturn the amendment before it becomes law, as the move strips Britain of its own independent trade policy – a key Government objective for Brexit. But if her revised Brexit deal is also defeated by MPs next week, Remainer Tory MPs could ally with Labour to push through the customs union bid to avoid a No Deal Brexit. Labour’s Shadow International Trade Minister Lord Stevenson said: “The success of this cross-party Lords motion gives both the government and the House of Commons a chance to step back from the disaster of a No Deal. “Ministers must now drop their red lines on Brexit and embark on a fresh approach to the negotiations with the EU.” The customs union bid was also backed by former Tory minister Baroness Altmann, the Lib Dem’s Lord Purvis, and former senior diplomat crossbencher Lord Kerr. – The Sun

  • Theresa May suffers humiliating Lords defeat as peers demand UK stays in a customs union – Independent
  • Theresa May suffers fresh Brexit defeat as peers demand UK stays in customs union – PoliticsHome

Government accused of keeping tariff bonfire secret to avoid no-deal Brexit…

The government is under fire over a “secret” plan to cut up to 90% of tariffs in the event of a no-deal Brexit, after Liam Fox confirmed details would not be released until after MPs vote on Theresa May’s withdrawal agreement next week. The international trade secretary is the second cabinet minister to say the tariff schedule, which will have huge implications for British business, and particularly farmers, has been delayed again. Two weeks ago, the environment secretary, Michael Gove, said the tariff plan would be published within days, but now Fox and the business secretary, Greg Clark, have said it will be published only if the House of Commons rejects the prime minister’s agreement and decides the UK will crash out of the EU. Fox said: “The government will set out the correct tariffs if indeed we get to a no deal. My personal preference is that we would know that information before we take a decision on a no-deal outcome. But I am not in a position to guarantee that would happen.” In response, the independent MP Chris Leslie said it was wrong to “hold a gun” to MPs’ heads, begging them to vote for May’s deal while keeping details of the alternative no-deal scenario secret. – Guardian

…as Nicky Morgan urges the Treasury to provide no-deal tariff plans ahead of May’s Brexit vote

Former Cabinet minister Nicky Morgan has urged the Treasury to clarify its position on tariff policy in the event of a no-deal Brexit following reports that up to 90 per cent could be slashed. Morgan, who chairs the Treasury Select Committee, wrote to Philip Hammond today to demand he state whether the lowering of tariffs was current Treasury policy, as “such a reduction would represent one of the largest liberalisations of trade policy in British history”. She said MPs needed to be provided with an update to the department’s previous economic analysis on tariffs so that they wouldn’t be expected to “vote blindly” on Theresa May’s Brexit deal next week, which, if rejected, will be followed by a vote on whether MPs want to rule out no deal. On Tuesday Sky News reported that the UK intended to cut 80-90 per cent of all tariffs on imported goods if it leaves the EU without a deal. Morgan said: “MPs should not have to read reports in the press that the Government is planning to slash tariffs on almost all imported goods. This is likely to have a significant impact on different business sectors and regions in the UK economy. – City A.M.

Slash tariffs to boost economy and flip pressure back on to the EU, top German economists tell Britain

Embracing free trade would limit the damage caused by a “no deal” Brexit, give a bounty of cheaper imports to consumers and strengthen Britain’s hand in EU negotiations, according to top German economists. Slashing all import tariffs after Brexit would cut costs for households and businesses, giving the economy a boost, the Ifo Institute said in a new report, calling this model a “hard but smart” Brexit. At the same time it would rebalance the power around the negotiating table, which is currently based on a “no deal” Brexit harming the UK because it would involve Britain imposing WTO taxes on its own consumers. The EU has used this imbalance to its advantage. However, Britain is free to scrap these taxes across the board, freeing itself from this damaging trap, the Ifo said. “In the case of a hard Brexit, would the UK really apply the high EU external tariffs and carry out elaborate physical checks at the borders? Most studies on the economic effects of Brexit go away and come to the conclusion that hard Brexit is much more expensive for the UK than for the EU,” said the report, written by Gabriel Felbermayr, director of the Ifo. “But such a strategy would be hardly rational for London and technically perhaps not feasible. By contrast, the UK would unilaterally abandon all new barriers with a ‘hard-but-smart’ strategy. This fundamentally changes the negotiation situation.” – Telegraph (£)

Michael Gove stokes rumours that MPs’ Easter recess could now be cancelled to deal with Brexit legislation

Michael Gove has stoked rumours parliament’s Easter recess could be cancelled for MPs, with time running out to put in place crucial legislation before the UK leaves the EU. The environment secretary said on Wednesday that Tory MPs had been warned that the break in April – currently set to last almost three weeks – could be scrapped. Asked by the Commons’ environment, food and rural affairs committee whether the government’s fishing bill could be expected before Easter recess, Gove replied: “The chief whip has reminded Conservative MPs that there may not be an Easter recess – it depends on, you know…” “Events, dear boy,” Tory MP Neil Parish – who chairs the committee – helpfully cut in. Gove’s words add to reports that the break, which is due to begin just six days after the UK is set to depart the bloc on March 29, could be cancelled as MPs scrabble to push through post-Brexit laws in time. – Huffington Post

Theresa May urges MPs to ‘give up EU membership’ for Lent

Simon Hoare (North Dorset) said at Prime Minister’s Questions: “Today sees the start of Lent, traditionally a time of abstinence and giving things up. Recently its become about doing something new and positive. “Would my Right Honourable Friend agree with me, that it would do our national soul some good if we all took up voting with the Government to leave the EU with her good deal and in an orderly fashion on the 29th March? Mrs May replied, saying that Mr Hoare had put forward a “very positive suggestion” for MPs to back her deal. She added: “And then of course across this House, we would all be able to give up being a member of the European Union on the 29th March.” – The Scotsman

> WATCH: Theresa May tells MPs “We can give up membership of the European Union on 29th March!”

Jeremy Corbyn ‘reaches out’ to Tory MPs over Norway plan…

Jeremy Corbyn has said he is “looking at all the options” to prevent a no-deal Brexit after he met Tory MPs to discuss alternatives to the PM’s deal if it rejected again by Parliament. The Labour leader held talks with ex-Tory ministers Nick Boles and Sir Oliver Letwin, who favour a closer, Norway-style relationship with the EU. He said he had discussed the so-called “Common Market 2.0 option” but would not commit to backing it at this stage. Many Labour MPs and some Conservatives back an even closer arrangement with the European Union – dubbed the “Common Market 2.0” plan – which would see the UK remain in the EU’s single market by staying part of the European Economic Area. Mr Corbyn said he had agreed to meet the Conservative MPs because he was adamantly opposed to a no-deal exit and he wanted to hear “what their ideas and options are”. “I am reaching out to all groups in Parliament to try and prevent a no-deal Brexit which I think would be very damaging,” he said after the meeting. “We are looking at all the options.” – BBC News

  • ‘Common market 2.0’ – Jeremy Corbyn talks to former Tory ministers – Guardian
  • Corbyn Seeks Common Brexit Approach With Tory Lawmakers – Bloomberg
  • Chances of a super-soft Brexit deal increase as Labour bid to woo Tories with Norway-style EU agreement – Daily Mail

…as Labour’s party chairman says Corbyn will ‘never be Prime Minister’ if the party backs a second referendum…

In an explosive Shadow Cabinet meeting on Tuesday Labour party chairman and Corbyn loyalist Ian Lavery tore into his Remainer colleagues for pushing the party to support a second vote. He warned that the move risks losing key votes in the Midlands and northern England. According to one insider Mr Lavery told Mr Corbyn in Tuesday’s Shadow Cabinet meeting: “If we back a 2nd referendum you will never be Prime Minister.” In the same meeting Mr Lavery also tore into critics of Labour’s handling of anti-Semitism complaints. He even said called for the prominent Jewish Labour MP Dame Margaret Hodge to be disciplined “for bringing the party into disrepute” after she accused Mr Corbyn of stepping in to stop his mates being kicked out over anti-Semitism. Mr Lavery then suggested Labour should “boycott the MSM [mainstream media] for a week” in revenge for its coverage of the party’s anti-Semitism crisis. In a further sign of the deep splits in the Labour party over Brexit, around three dozen MPs who represent pro-Leave constituencies met the party’s Brexit chief Sir Keir Starmer to express their fury at the decision to support a second referendum. One insider said: “Most turned up to tell him the second referendum was mad and was deeply unpopular.” – The Sun

…and a Labour shadow minister admits organising to stop new Brexit referendum

One of Jeremy Corbyn’s shadow ministers has admitted to organising a campaign to stop a fresh Brexit referendum, despite Labour’s backing for the policy. Gloria De Piero refused to answer questions about how her campaigning could be squared with her frontbench role as a spokeswoman for justice issues. Critics said Mr Corbyn’s “complete lack of leadership” on Brexit would be underlined if he allowed shadow ministers to openly oppose party policy to push for a second public vote. Ms De Piero’s actions were revealed when she joined other Labour referendum opponents in urging fellow MPs to join their cause at a meeting staged in Westminster. An email sent by the group, seen by The Independent, is entitled “Respect the Result: No Second Referendum” and encourages MPs unable to attend to register their opposition in order to stay “in touch”. – Independent

DUP’s Sammy Wilson accuses head of NI civil service of Brexit scare tactics…

On Tuesday a letter emerged from the man tasked with running Northern Ireland in the absence of government to the Northern Ireland parties. He warned the inability to prepare for a no-deal Brexit put a strain on businesses which could lead to their collapse or relocation sparking a “sharp increase” in unemployment. While saying he did not think there would be food shortages, he said choice on shop shelves would be reduced, there would be higher prices and likely an increase in energy bills. Sammy Wilson – appearing in front of the Northern Ireland Affairs Committee on Wednesday morning, was asked what he made of claims Brexit would make a united Ireland more likely. He said that was an “example of the scare tactics, like we have got from David Sterling”. Responding to those in the room pointing out he was effectively head of the Northern Ireland government, Mr Wilson said: “I don’t care whether he is the head of the civil service or whether he is Santa Claus. It really doesn’t matter. The fact of the matter is he has got it wrong.” – Belfast Telegraph

…and repeats that the DUP won’t back Brexit without guarantees on backstop

Reports have suggested that Cox, unable to secure a time limit or unilateral exit mechanism for the backstop, has shifted his focus to a beefed up system that would allow an independent body to decide on how the system would operate. “That certainly is not a mechanism that we would accept,” Wilson said. “That leaves us in exactly the same position as the current withdrawal agreement does, where somebody else decides whether the United Kingdom can break out of the backstop or whether it stays in the backstop.” Any exit from the backstop had to be “a decision of this parliament, and this government, not some independent panel of judges”, he said. – Guardian

Dominic Grieve to host French Europe minister for discussions on Article 50 and a second referendum…

Remain Tory MPs will meet on Thursday with senior members of Emmanuel Macron’s government to discuss extending Article 50 as a path to a second referendum, The Telegraph can reveal. Dominic Grieve, the former Attorney General, will hold a meeting with Nathalie Loiseau, the French Europe minister, and other senior French politicians in his office. It came as Nick Boles and Oliver Letwin, two Tory MPs pushing for a softer Brexit, held a meeting with Jeremy Corbyn to discuss their plans. Mr Grieve has invited fellow pro-European MPs for a meeting with Ms Loiseau, her advisers, a French senator and a senior official from the French Ministry of Foreign Affairs. France has reportedly been pushing for a 21 month Brexit delay while the terms of a future deal are thrashed out. Mr Grieve and other Remain Tory MPs are pushing for a longer extension to Article 50 as they attempt to secure a second referendum. Remain ministers are understood to have held secret meetings with ministers from Germany, Belgium and other nations as part of talks on extending Article 50. – Telegraph (£)

  • Dominic Grieve’s Remainers hatch plan with Macron’s team to delay Brexit – Express

…as she says the UK should offer new proposals to break the Brexit impasse

France’s Europe minister, Nathalie Loiseau, has urged Britain to offer fresh proposals to end the Brexit impasse, warning that uncertainty surrounding the UK’s departure from the EU is affecting its neighbours. Loiseau, who will meet the Brexit secretary, Stephen Barclay, in London on Thursday, said: “Everything we are living through is unprecedented and we clearly don’t want to lecture. But the clock is really ticking and I do think it would have been better for people and businesses to live in more certainty than they are today.” She added: “My feeling is that this is a historic moment, and you have to live up to the moment.” Loiseau said the withdrawal agreement was the best option and the EU was open to giving reassurances, but it was up to the UK to present new initiatives. She repeated the recent warning by the French president, Emmanuel Macron, that any extension to Britain’s departure date would depend on the UK making firm proposals. “Why would be there be an extension without a reason?” Loiseau said. “We have been in discussions for quite a long time now. There needs to be something specific to justify an extension. This is not only what Emmanuel Macron is saying, the German chancellor, Angela Merkel, was in Paris last week and said the same thing. And a number of my counterparts throughout the European Union call me for frequent discussions and we all have the same sense. A short extension: why not, if there is a good and credible reason.” She added: “So far, we are still waiting for a proposal from London. It’s really a British initiative which has to come. And it has to be supported domestically in the UK.” – Guardian

German economists: no deal will hit Ireland three times harder than UK

Germany’s prestigious IFO Institut has crunched the numbers on the economic impact of no deal on 44 countries and predicted that Ireland would be hit three times harder than the UK by a no-deal Brexit, taking a massive 8.16% hit to their economy. Guido hears that Ireland has been the main EU27 country holding out against any reference to the UK’s basic Vienna Convention treaty rights over the backstop. They may want to seriously reconsider their position after seeing these figures… However, the Institut also modelled the effect of a “hard but smart” Brexit, where the UK left with no deal but also put in place large unilateral tariff cuts, more or less exactly along the lines of what what the Government is planning. In this scenario, the UK actually faces a smaller impact than the EU – they forecast a -0.5% impact on the UK compared to -0.4% for France and -0.48% for Germany, and -0.6% for the EU as a whole. Ireland is still by far the biggest loser, taking a -5.39% hit, ten times the size of the UK… In their sector-by-sector breakdown, they find that the UK would actually receive a major boost to certain sectors in a “hard but smart” Brexit, with electrical equipment up by 3.7%, machine manufacturing by 8.4% and pharmaceuticals by a whole 8.7%. EU sectors lose out across the board. – Guido Fawkes

Tory Ministers face row with SNP over post-Brexit Scotland’s ‘Towns Fund’

Tory Ministers face a furious row with Nicola Sturgeon after demanding they control a near £100 million Scottish ‘Towns Fund’. The Government is putting the finishing touches to a post-Brexit fund for Scotland, Wales and Northern Ireland after the £1.6 billion ‘Stronger Towns’ programme for England. Scotland is expected to receive almost £100 million – equivalent to the West Midlands. And sources claim Communities Secretary James Brokenshire is insisting he gets a say over where the money goes – rather than allow the Scottish Government to treat it as a devolved matter. One insider pointed out that the SNP had failed to pass a £40 million Brexit package to the police to prepare for a possible No Deal – with some of the money going to the Forestry Commission. Another said there was a precedent for Westminster managing money destined for Scotland. In 2015, some 27 coastal towns and villages across Scotland shared a near £10 million administered by the Big Lottery Fund. A source said: “We’re worried we can’t trust the SNP to spend the money on what it’s earmarked for.” Northern Ireland could £50 million with Wales £30 million. Ministers were slammed over the ‘Stronger Towns’ fund when the details emerged at the start of the week. Shadow Chancellor John McDonnell accused the government of attempting to “bribe” Labour MPs into backing the PM’s Brexit deal. – The Sun

Jeremy Corbyn: Botched Brexit is dragging our communities down and driving deep division

We’re stuck in the mess the government has made of Brexit. It is dragging our communities down, whether they voted leave or remain, and driving deep division. It’s time we raised our sights from this false divide and moved beyond Brexit to deal with the real pressures facing people. Over a million elderly people are not getting the care they deserve. Take home pay has barely risen since the financial crisis and household debt is growing six times faster than wages. I will continue to reach out to get a decent Brexit deal so our country can spend more time talking about our children’s future than a customs union. Labour respects the result of the referendum and a close economic relationship is the best Brexit compromise for both 17 million leave voters and 16 million remain voters. But we can’t accept a damaging Tory Brexit or a no deal outcome, so we also support preparing for a public vote in case parliament is not able to achieve a sensible Brexit. We will do whatever we can to find a solution that can unite the country so, together, we can face down the real challenges and seize the opportunities in this moment of great change. – Labour Leader Jeremy Corbyn for the Mirror

Allister Heath: It’s a complete myth that a no-deal Brexit would cripple the British economy

Like almost everybody who voted for Brexit, I wanted to leave the EU with a trade deal. I certainly assumed that we would: it is in both sides’ interests, and EU manufacturers and farmers do especially well from the present arrangements. I thought the Government would negotiate robustly and sensibly, following Vote Leave’s advice not to trigger Article 50 until the outlines of a deal had been agreed, all the while preparing for a hard exit. I expected the EU to realise that a refusal to play ball would mean a calamitous financial, defence and security hit. It wasn’t to be. The abject lack of leadership provided by the Prime Minister, the Government’s staggering refusal to leverage the UK’s strengths, its bovine nastiness on the rights of EU citizens and, of course, the fact that so many on the UK side were trying to reverse Brexit, all combined to deliver the greatest failure of British statecraft since Suez. The EU was emboldened into laying a series of traps into which we jumped enthusiastically, with what ought to have been the minor issue of Northern Ireland’s border turned into a case study in technocratic sabotage. What now? Tory Remainers are in full swing, threatening either a delay or permanent membership of the customs union and single market – in other words, no Brexit – if MPs don’t sign up to the Prime Minister’s appalling deal. We must hope that, against all the odds, Parliament doesn’t fall for this madness. – Allister Heath for the Telegraph (£)

Asa Bennett: Theresa May will soon have to decide if she is serious that ‘no deal is better than a bad deal’

Theresa May has come out with many mantras in her mission to ensure that, as she put it, “Brexit means Brexit”. Undoubtedly the most significant has to be her insistence that “no deal is better than a bad deal”.  That slogan made its way into the Conservative Party’s 2017 election manifesto, a sign that she wanted to bind fellow Tories into this. Whenever Brexiteers feared that the Prime Minister was giving too much away in the negotiations, she would comfort them by repeating that mantra, leading them to believe that she would prefer to walk away rather than sign away too much. She stands by that mantra even now, telling the House of Commons last week:  “Indeed, I have always said that no deal is better than a bad deal. I think we have actually got a good deal from the European Union.” Awkwardly for the Prime Minister, scores of her Brexiteer parliamentary colleagues followed her own logic by voting down what they saw as her “bad deal” back in January. And many of them are threatening to do so again this month in the hope of paving the way for an outcome Mrs May has held up as better: a no-deal Brexit. After all, why spend time preparing for a no-deal Brexit if you won’t back your own preparedness for that scenario? Mrs May could try and justify it by insisting that she still believed her “good deal” was possible. But given that those close to her expect it to be softened even further, she would effectively pass over a no deal in favour of a bad deal – the opposite of what she insists is still one of her key beliefs. – Asa Bennett for the Telegraph (£)

Jayne Adye: The 15 major failings of May’s deal

There has been a great deal of focus on the Irish Backstop, so much so the renegotiation of the Withdrawal Agreement, most recently attempted by the Attorney General, Geoffrey Cox MP, has focused entirely on this single issue. Everyone seems to have forgotten there are many more problems with the Withdrawal Agreement! Far too much of the Prime Minister’s Withdrawal Agreement is being deemed acceptable, in many cases because the majority of Remain MPs in Parliament do not believe in the Leave result of the EU Referendum, even though so many of the voters in their constituencies voting Leave. British politicians need to ensure we get a real, true and clean Brexit, and get behind the World Trade Organisation No Deal option, instead of  this half-baked betrayal of the Great British Public. – Jayne Adye for Get Britain Out

Anna Isaac: Tariffs are no easy Brexit battle

There’s sound logic that suggests raising a tax on something will instantly make it cheaper. However, with tariffs, as in life, things are rarely so simple. These taxes, which have been thrust into the limelight by Brexit and the US-China trade war, are placed on goods entering country by a government. And there’s a tricky cost-benefit analysis to be done when suddenly increasing these levies. Tariffs are one of the most controversial Brexit decisions facing the Cabinet, which Trade Secretary Liam Fox says has arrived at a “basic agreement” on the charges the UK would apply if it leaves the EU without a Brexit deal on March 29. This agreement reportedly involves slashing taxes on as much as 90pc of imports. The gradual removal of tariffs in some instances can help industry to become steadily more competitive, and better able to match peers margins around the globe. Having an open economy does not always render a country less strong per se. It can make it more agile and responsive to the forces of global demand. Freer trade, of which tariff reduction can be a key part as it removes barriers to market entry, clearly has its benefits. “Trade agreements list tariffs in documents called ‘schedules’ precisely because the reductions they agree in sensitive sectors tend to be gradual. Governments phase out their tariffs bit-by-bit, sometimes over decades, specifically to allow formerly protected sectors and the communities built around them time for adjustment,” explains former trade negotiator Dmitry Grozoubinski. There’s no such slow steady chipping away at levies facing UK firms, however, as far as the Telegraph understands the Government’s plans. With only a few weeks left until no deal may arrive, businesses do not know if they will be left naked to international competitors. – Anna Isaac for the Telegraph (£)

Igor Gräzin: The British defeated the EU – you should be demanding surrender terms, not offering them

Around Europe, Theresa May’s “deal” is described as a capitulation. For one of the first times, I think the European media may have the essential truth. Certainly, there is little quarrel with that description. The first step to victory, to lasting peace, is not to capitulate. Can we all agree on that? People ask me in Brussels what is the plan to save Brexit? I am a Eurosceptic MEP but I am from Estonia, how should I know? I telephone London and ask what is the plan? Descriptions of events these days is that it is hand-to-hand fighting, everything is immediate and tactics are only for the situation of the moment. One is put in mind of that scene in “All Quiet on the Western Front”when Sergeant Katczinsky explains how to use a spade in trench fighting. But even in this war of attrition, which we have witnessed for two years now, someone should have sat back from the trenches and planned a breakthrough, invented the tank or something. You may survive for the moment but you cannot win a war with shovels. Certainly, May’s capitulation must be shredded. That much is obvious. But then? The only characters in this tale who seem to know about negotiation are the DUP. Their basic negotiation approach has been that if Mrs May gives them what they want, they’ll let her survive – a crude but effective tactic. Mrs May’s successor must understand that these are not negotiations between gentlemen of goodwill looking for mutually advantageous business. When the British people defeated the EU in referendum, you did it for all of Europe. The deal you want is what we want. You defeated our adversaries. You should be demanding surrender terms, not offering them. – Estonian MEP Igor Gräzin for the Telegraph (£)

Ryan Bourne: Deal or no deal, Britain should pursue unilateral free trade

A recent study estimates that the full burden of tariffs imposed by President Donald Trump fell on American consumers. As reports claim that the Department for International Trade (DIT) intends to cut 80-90 per cent of the UK’s import tariffs if Britain leaves the EU without a deal, that’s worth remembering. For though there were very different reactions to both stories, they are two sides of the same economic coin. Import tariffs are taxes overwhelmingly paid by final consumers. They reduce consumer choice. In the longer term, they make the whole economy less efficient too, insulating industries from international competition, diverting resources to less productive sectors, and encouraging lobbying for similar protection. The best thing to do is remove them, irrespective of what other countries do, in turn creating a dynamic for firms to instead lobby for a good general business policy environment. To an economist then, the reaction to the DIT proposals is perplexing. “Goodbye manufacturing, and goodbye agriculture,” tweeted Laurie Macfarlane, the economics editor of an organisation called Open Democracy. “Sheer lunacy,” “suicide” and “devastating” said others. Former BBC Newsnight editor Christopher Cook dubbed the plan “banana republic stuff.” So why is something so uncontroversial among economists generating so much anger among commentators? – Ryan Bourne for CapX

The Sun: Leaving the shackles of the EU is a chance to really kickstart Britain’s economy

Leaving the European Union is a chance to kickstart Britain’s economic engine. We’re fully behind the Government’s not-so-secret plan to get rid of tariffs on thousands of items coming into the UK in the event of No Deal. Even if we strike a deal, our economic policy MUST be focused on playing the biggest possible part we can in global trade. That’s what made Britain great. At home, the Government — preferably without Philip Hammond anywhere near it — must reboot our regions. The “Towns Fund” is only a start. Let’s turn some of our old industrial areas into free ports, revitalising the manufacturing economy. We should experiment with enterprise zones in poorer parts of our biggest cities, similar to that used in London’s Docklands in the 80s, to encourage investment in exciting new technology. Slash business rates for the high street to allow it to compete with online rivals, reinvigorating our town centres. The PM and others have too often seen Brexit as a damage-limitation exercise. It’s that sorry attitude, in large part, that has led us to where we are today. Actually, it is a chance for us to up our game as a nation, to embrace the free market red in tooth and claw. To reap the benefits it can bring for businesses, consumers and our public services. Ambition is not a dirty word. – The Sun says

Christian May: Brexit-backing Tories are running out of road

While Theresa May’s team attempts to woo Labour MPs with offers of cash for poor areas and commitments on workers’ rights, the attorney general and Brexit secretary have been in Brussels, frantically trying to win concessions on the thorny Irish backstop issue that has so far scuppered May’s efforts to get her deal through parliament. Their conversations with EU negotiators are said to have been “difficult and robust” – but so far fruitless. Technically, the threat of a no-deal exit hangs over this political tussle. The OECD became the latest body to raise no-deal fears yesterday, warning that it would seriously undermine the UK’s economic prospects and drag down global growth. Bank of England governor Mark Carney made the same point on Tuesday, though his team at Threadneedle Street also pointed out that the UK was better prepared than the EU – whose member states have been too focused on luring business from London and not focused enough on mitigating the hit to financial stability. The respected German think-tank, the IFO Institute, has warned that a no-deal scenario would wallop Ireland particularly hard – with a staggering 8.16 per cent hit to their economy. German business leaders are increasingly vocal about the damage that would be caused by a failure to agree an exit deal, as are manufacturers here in the UK. You might think all of this would motivate the EU to soften its approach to the Irish backstop and allow May to get her deal over the line for the benefit of all concerned. However, EU officials seem increasingly confident that the Westminster parliament simply will not allow a no-deal outcome – and, if they’ve read the signs (or newspapers) correctly, why would they go soft on their position? – Christian May for City A.M.

Spectator: Why MPs must hold their nose and back May’s Brexit deal

It is becoming painfully clear that on Tuesday the House of Commons will be asked to vote on an EU withdrawal bill that is almost entirely the same as the one defeated by 230 votes in January. Geoffrey Cox, the Attorney General, is seeking to guarantee that Britain will never be trapped in the backstop. If he succeeds, Brexiteers, whatever their wider misgivings, should hold their noses and vote for Theresa May’s deal. It will be tempting for MPs who are seeking a proper break with the EU to repeat their rebellion. May’s deal means Britain will, for two years, be an EU member in all but name: paying all of the money and obeying the directives while undergoing (at least) two more years of Brexit talks. Leaving without a deal, which remains the default option, would certainly be disruptive in the short term, but nowhere near as bad as forecast. Even Mark Carney, Governor of the Bank of England, has had to accept his earlier warnings were vastly overblown. But there is no one to lead Britain through a no-deal Brexit and not enough MPs to support it. This is what Brexiteers have to accept. – The Spectator editorial

Brexit in Brief

  • Theresa May is delusional if she thinks she can win over Labour MPs – Brian Monteith for City A.M.
  • Conservatives can unite once the Brexit psychodrama is over – Stewart Jackson for The Times (£)
  • Why should we give a cluck about chlorine-washed chicken? – Pip Sloan for the Telegraph (£)
  • Workers’ rights were won in Westminster, not Brussels. So why is Labour spreading fake news? – Tom Harris for the Telegraph (£)
  • The UK can’t accept backward US food standards – or chlorinated chicken – George Eustice MP for the Guardian