Brexit News for Tuesday 10 October

Brexit News for Tuesday 10 October
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Theresa May sets out first plans for what ‘no deal’ would look like in trade and customs white papers…

The UK has set out how it could operate as an “independent trading nation” after Brexit, even if no trade deal is reached with Brussels. Prime Minister Theresa May told MPs “real and tangible progress” had been made in Brexit talks. But the country must be prepared for “every eventuality”, as the government published papers on future trade and customs arrangements… She rejected a call from a Tory MP to name a date when the UK would walk away from talks without an agreement, saying “flexibility” was needed. – BBC News

Theresa May has revealed detailed plans for quitting the EU with “no deal” in a move designed to pile pressure on Brussels to begin trade talks… White papers published on Monday on customs and trade made it clear that Britain would trade under World Trade Organisation rules if it left without a deal, and would set its own tariffs and taxes on goods, as well as moving borders inland to avoid queues at ports. It also emerged that the Department for International Trade has set up a planning unit dubbed “Project After” which is putting forward radical options including dropping all trade tariffs and joining a trade pact focussed on Asia. – Telegraph (£)

  • White papers tackle challenges of ‘no deal’ Brexit – FT (£)
  • Theresa May warns British public not to expect a deal until last minute – Independent
  • May backed over no-deal stance as Brexit stakes rise – Bloomberg

…as Ministers demand billions from Philip Hammond to prepare for ‘no-deal’ Brexit…

Pro-Leave Cabinet ministers are demanding billions in the Budget to prepare for a ‘no deal’ Brexit scenario – after one rated its chances now at 50/50. Two of the PM’s most senior ministers spoke to The Sun to vent their growing anger with the government’s failure to be ready to call the EU’s bluff if exit deal talks fail. Levelling much of the blame on Philip Hammond and Treasury mandarins, the powerful pair insisted the Chancellor publicly sets aside jumbo sums in his annual financial blueprint next month… One of the powerful duo: “Since the election, the system has fallen into inertia. No proper leadership means departments have stopped preparing for no deal, and they are using our lack of a majority as an excuse. It is killing our negotiating hand, as the EU is watching us very carefully and they can see just how little we’re doing too.” – The Sun

  • Pro-Brexit Tory Bernard Jenkin calls for ‘no deal’ EU ultimatum – FT (£)

…with Germany and France pushing to delay talks on trade deal and transition…

Theresa May is facing a fresh blow from Brussels as it prepares to ignore Britain’s demands to agree the Brexit transition deal before the end of the year, delaying trade talks further… Germany is among the countries behind the slowdown, introducing a new three-month discussion window for the EU to work out its common position, or “mandate”, on transition. Experts said that this could be done in three days rather than three months. “Germany is hostile and has told the others that it is not going to happen,” a diplomatic source said. France is also slowing down the timetable behind the scenes. This will especially upset the British government since cabinet ministers believed that President Macron was an ally. Some believe that France is taking more conciliatory lines in private because of the importance of Calais’ trading links to the country’s economy. – The Times (£)

  • French EU minister: UK doing better on Brexit, but it’s not enough – Politico
  • ‘Berlin is being quite German’: Merkel’s businesses won’t budge on Brexit deal with UK – Express
  • There’s no use trying to go over Michel Barnier’s head – he’s doing just what EU leaders want – Asa Bennett for the Telegraph (£)

…as the EU hits back at May, saying negotiations aren’t a ball game… but the ball is ‘entirely in the UK court’

The PM said she had made as many concessions as she was prepared to in her keynote speech, which included pledges to honour Britain’s financial commitments and seek a transition on current terms. But asked about the comments today, EU Commission chief spokesman Margaritis Schinas said: “This is not exactly a ball game. There’s a clear sequencing of these talks and there’s been so far no solution found on step one, which is the divorce proceedings, so the ball is entirely in the UK court for the rest to happen.” – Express

  • EU rejects Theresa May’s call to advance Brexit talks – FT (£)
  • Claims that Member States blocked Barnier from “closing chapter” on citizens’ rights – Express
  • UK ministers ‘deeply pessimistic’ about Brexit talks progress – Guardian
  • Brexit negotiators seek technical progress – Politico
  • Theresa May could be offered ‘landing zone’ by EU to finally start discussing trade, suggests EU diplomat – Express
  • We have to ask the question. Does the EU really want a deal? – Sir Peter Marshall for ConservativeHome
  • Britain’s patience with the EU is finally wearing thin – Express editorial

Theresa May reveals in statement to MPs that the UK could be bound by ECJ rulings after Brexit…

The Prime Minister told MPs in the Commons that Britain may “start off” a Brexit implementation period under the jurisdiction of the EU until it can implement a “dispute resolution mechanism”… However Bernard Jenkin, a leading eurosceptic who Tory MP who sat on the board of Vote Leave, told The Daily Telegraph: “Most MPs represent Leave constituencies, and they may find it hard to explain why we are not taking back control of our laws on day one.” Jacob Rees-Mogg, another eurosceptic Tory MP, said he was “concerned” by the Prime Minister’s comments. – Telegraph (£)

  • Theresa May concedes ECJ rule during Brexit transition – Politico
  • Theresa May reveals Britain will be ruled by EU judges for at least two more years, enraging Brexiteer MPs – The Sun
  • Tory fury over European court’s ongoing role during two-year transition period: Theresa May faces backlash after confirming UK will still be subject to rulings – Daily Mail
  • Brexit MPs angry as Theresa May accepts continuing rule of EU court – Guardian
  • Tory Brexiteers accuse Theresa May of betrayal over role for EU court – The Times (£)
  • UK business leaders tell May Brexit transition ‘essential’ – FT (£)
  • May wisely prepares for No Deal – but treads a dangerous line on the ECJ and transition – Mark Wallace for ConservativeHome

…but Boris Johnson welcomes the Prime Minister’s statement

Boris Johnson has backed Theresa May’s crunch speech on Brexit – despite her appearing to cross two of his previous ‘red lines’. The Foreign Secretary said the speech was a “great statement” and declared: “What matters is the end state and our freedom to do things differently and better.” He hailed the Prime Minister’s “powerful vision”, which included warnings that a transitional period after the official EU divorce date could last longer than two years. Mrs May also suggested the European Court of Justice (ECJ) would overrule UK law beyond March 2019. – Sky News

  • Boris and Gove back PM statement – Guido Fawkes
  • Boris Johnson hits out at ‘so-called friends and allies’ after media reports he would refuse cabinet demotion – ITV News
  • Poll: Six in 10 voters want Theresa May to stay on as Prime Minister until after Brexit – Telegraph (£)

SNP economy minister attacks banks for ‘not threatening to leave’ UK after Brexit…

The SNP’s Economy Minister has delivered an extraordinary attack on the banking sector for “not threatening to leave” the UK after Brexit. Keith Brown accused the financial services industry of “not getting on side of the public” by failing to exert pressure on the UK Government with threats to move their operations abroad.peaking at a fringe meeting at the SNP conference in Glasgow, Mr Brown said the major banks and financial institutions had not shied away from going public with their concerns during 2014’s independence battle and asked: “Why is the sector so quiet?” – Telegraph (£)

…as Nicola Sturgeon describes Brexit as a ‘developing disaster’

Scotland’s first minister has insisted that Brexit is a “developing disaster” despite Theresa May’s prediction that the “doomsayers” will be proved wrong. Nicola Sturgeon told BBC Scotland that the process of leaving the EU had left the UK “engulfed in chaos”. She argued that the case for Scottish independence was getting stronger by the day as a result. But she again said she would not set a date for a referendum until there was greater clarity on Brexit. And she said she was “not there yet” in supporting a UK-wide referendum on the final Brexit deal, although she said the case for one may become “more and more difficult to resist”. – BBC News

  • Nicola Sturgeon calls Brexit talks a ‘slow-motion car crash’ – FT (£)
  • ‘She wants Brexit to be a disaster!’ Sturgeon mocked for revealing second referendum plot – Express
  • Nicola Sturgeon puts all Scottish nationalist chips on Brexit ‘disaster’ – Politico

New court complex planned to bolster City of London after Brexit

A major court complex specialising in cybercrime and fraud cases is to be built in the City of London to promote the UK’s financial and legal services post-Brexit. The scheme – likely to costs tens if not hundreds of millions of pounds – is being backed by the City of London Corporation, HM Courts and Tribunal Services (HMCTS), the Ministry of Justice and senior judges… The investment is intended to bolster the City’s reputation after the UK leaves the EU. – Guardian

EU banking watchdog to publish guidance aimed at avoiding EU cities offering ‘sweeteners’ to lure banks from London

The European Union’s banking watchdog will publish guidance on new EU hubs for lenders from Britain seeking a base in the bloc after Brexit, its chairman said on Monday… The guidance will be published in the coming days, he said. It aims to stop regulators in Frankfurt, Paris, Amsterdam and elsewhere offering sweeteners to lure UK firms. – Independent

  • Frankfurt steps up efforts to lure €1tn-a-day euro clearing from UK – Guardian
  • Deutsche Boerse plans revenue-share deal to lure Brexit clearing – Bloomberg

Iain Duncan Smith: The Treasury still hasn’t accepted a two-year, time-limited transition

A senior minister commented to me recently that the Treasury seemed locked into a state of permanent depression about the UK’s ability to get a deal from the EU. Much of this stems it seems from a fear that the EU and Germany’s plan is to punish the UK and make an example of us. Therefore, it follows for the Treasury (the architects of Project Fear) that we must have a very long transition in the hope that either the UK changes its mind on Brexit or that the pain could be spread out over a much longer period… This is part of the problem with the discussion on this side of the Channel. It’s been dominated by those who fear what the EU might or might not give us… That is why our negotiating tactic must be to publicly plan to leave the EU on WTO terms and force the EU to decide what they really want. If so-called ‘punishment’ is their plan then then this will become clear soon enough and we can act accordingly. However, if it is not, then when they realise that we mean business they will have to decide. – Iain Duncan Smith MP for ConservativeHome

Hugh Bennett: It wouldn’t be a calamity if the UK left the EU with no deal

The key factor in determining whether “no deal” can work for the UK comes down to whether the government commits serious resources to planning for it. There are issues to resolve whether the UK leaves with or without a deal, but none will ultimately prove too challenging if the right preparations are made in good time… Most importantly, all government departments must now start pulling in the same direction on Brexit. There are elements within the Treasury which are still pinning their hopes on a deal which preserves EU membership in all but name – a shadow EEA-type membership which binds the UK to existing and future EU regulations with no say over them at all. Not only does this damage Britain’s negotiating hand, but it would be far more detrimental to the UK’s long term prospects than leaving with no deal. – Hugh Bennett for City A.M.

  • Prepare for a ‘no deal’ scenario with Brexit – but try to avoid it – Christian May for City A.M.

The Sun: In the face of the EU’s petulance, we must start preparing for a ‘no deal’ Brexit

What more incentive do we need, after the EU’s latest pig-headed intervention, to invest billions immediately in preparing for a “no deal” Brexit? Forget about waiting till the New Year. What for? It is time we took Brussels’ stonewalling seriously. Every day we dither strengthens their position. The Sun would much rather we ended up with the deal outlined by Theresa May: a two-year transition followed by a free trade agreement. But it would be disastrous if we were not ready to walk away from some dodgy settlement they offer us at the last minute… Chancellor Philip Hammond’s Budget next month needs to contain dramatic new ideas to fix the country’s problems. But it must also make our Brexit fallback position a reality. – The Sun says

  • Britain has a strong Brexit hand. Planning for no deal helps the Government play it – Telegraph editorial

Terry Scuoler: It will be a hostile act if the EU halts progress on talks

May to her credit has made an effort to unlock the deadlock. She has done so at some political cost and now the EU needs to respond in kind. The EU Council should now confirm that the phase two negotiations commence in October and agree to loosen the straitjacket of Michel Barnier’s limited and procedural negotiating authority to encompass wider-ranging discussions on our future relationship. Not to do so would be seen as a hostile act and portray the EU as a bully and potentially force the UK to edge towards a harder Brexit which could be damaging to all parties. We need to see flexibility and leadership on all sides. – Terry Scuoler, EEF chief executive, for the Telegraph (£)

Liam Byrne: Britain needs its old buccaneering spirit post-Brexit to lead the world

Now, we should be optimistic about the task. Company formation rates are at the highest level ever; Britain boasts nearly 2 million more firms than at the turn of the century; there are more self-employed than ever before – and over 40 per cent of Europe’s “unicorns” (new firms worth over $1 billion) are UK based. By the next election, there will be more self-employed people than public service workers, and there are now over 2,000 eBay millionaires. Yet peep over the horizon and see what the competition is up to. Historians love asking why the Industrial Revolution started in Britain and not in China. Well, today, it’s China’s Red Tech Revolution that is powering ahead… So its time for a bold plan to help unleash the best traditions of British enterprise. – Shadow Digital Minister Liam Byrne MP for the Telegraph (£)

Chris Cook: Liam Fox, transition and ‘Project After’

Liam Fox’s department is busier than it looks. The Department for International Trade has a huge amount to do to keep trade going smoothly, even if we stay in a customs union with the EU during our transition out. But the trade secretary’s department is also doing some emergency planning. What if the talks end acrimoniously? What if we need a radical Plan B? This planning has been dubbed “Project After” -  a menu of options for life in that world. These are not firm proposals, but blue-sky “what-ifs” for a cliff-edge break with Europe. These are radical – they include ideas like joining an Asia-focussed trade pact and dropping all our tariffs. Planning for no-deal is not DIT’s most pressing engagement, however – its key priority for now is making our transition out of the EU as seamless as possible. – Chris Cook for BBC News

Brexit in brief

  • We can’t let Brexit get lost in transition – Richard Littlejohn for the Daily Mail
  • Theresa May wants the EU to get a move on, but their rules still shape the Brexit process – Catherine Barnard for the Telegraph (£)
  • This company loves Brexit. Its Polish workers don’t mind – Bloomberg
  • Spain stares into Catalan ‘abyss’ – Politico
  • Dutch government coalition deal receives parliamentary backing – Politico
  • Merkel forced to cap refugee numbers as coalition talks loom – The Times (£)
  • EU divisions on the eastern front – Politico
  • Hard-line French union chief calls mass rally against Macron reforms – Politico
  • Irish tax break scheme ‘will attract top talent from Britain after Brexit’ – Guardian
  • UK farmers risk seeing incomes halve after Brexit – FT (£)
  • Brexit will be a big kick up the a** for lazy Britons, says Gordon Ramsay as he insists he’s looking forward to end of migrant ‘influx’ – Mail