Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team EU agrees Brexit ‘transition’ negotiation guidelines… The European Union has set out its demands for the temporary transition period after the UK leaves in March 2019. The EU wants the UK to continue to follow its rules but not be involved in making decisions. Brexit Secretary David Davis said the UK wanted a “right to object” to new laws passed by the EU during this time. Downing Street said there would “naturally” be differences between the sides ahead of negotiations. – BBC When it comes to a Brexit transition, Brussels is confident it holds all the cards – Politico Brexit transition period could be lengthened after EU rubberstamps negotiating stance – Telegraph (£) > Watch on BrexitCentral’s Youtube Channel: Barnier says UK must accept new laws during transition …but Theresa May will reject the EU’s pitch on citizens’ rights and rule taking… Theresa May will reject the EU’s proposed deal on the Brexit transition period and go into battle next week over freedom of movement and so-called “rule taking”. Michel Barnier, the EU’s chief Brexit negotiator, said Britain must accept “all decisions” of the European Union during transition if it wanted a deal, but would have no say over any new laws that are brought in. Brussels’ official negotiating stance, published on Monday, also states that freedom of movement must continue until the end of the transition period, which the EU wants to end on December 31, 2020. – Telegraph (£) UK wants to vet EU laws during transition period – Independent Theresa May must resist any new EU laws – Sun editorial …as Davis vows that Brexit transition will be time-limited David Davis has pledged that a proposed transition period between Britain leaving the EU and full independence will not last any longer than two years. The comments by the Brexit secretary has calmed concerns that Britain could be locked in an endless transition period which would mean it remained under Brussels rule as a “vassal state” with no influence. Speaking to the Lords’ EU committee Mr Davis also said that the UK intends to remain on key committees influencing EU decisions during the transition or implementation period where the UK will still have to accept rules from Brussels. – Express > Watch on BrexitCentral: Davis says we won’t extend Article 50 time limit Leaked gloomy Brexit analysis claims UK will be worse off outside the EU… The government’s new analysis of the impact of Brexit says the UK would be worse off outside the European Union under every scenario modelled, BuzzFeed News can reveal. The assessment, which is titled “EU Exit Analysis – Cross Whitehall Briefing” and dated January 2018, looked at three of the most plausible Brexit scenarios based on existing EU arrangements. Under a comprehensive free trade agreement with the EU, UK growth would be 5% lower over the next 15 years compared to current forecasts, according to the analysis. The “no deal” scenario, which would see the UK revert to World Trade Organization (WTO) rules, would reduce growth by 8% over that period. – Buzzfeed …but then it was produced by the Treasury, with its appalling record of economic predictions… The word in Whitehall this morning is that the leaked document forecasting doom-laden outcomes in every Brexit scenario was put together by civil servants from the Treasury and the Cabinet Office Brexit unit. Fingers are being pointed at the Brexit team based in the Cabinet Office, run by the Remainer Olly Robbins, with suggestions work was led by Treasury mandarins. Buzzfeed reported that the document was prepared by officials across Whitehall for DexEU, though Guido is led to believe David Davis thinks the forecasts are rubbish, as he has repeatedly said of the Treasury’s economic predictions before. – Guido Fawkes …and government sources play down the work Government sources point out that the document has not modelled the effect of a bespoke deal covering trade and financial services – the government’s preferred scenario – and it does not attempt to anticipate the outcome of negotiations… The source said: “An early draft of this next stage of analysis has looked at different off-the-shelf arrangements that currently exist as well as other external estimates. It does not, however, set out or measure the details of our desired outcome – a new deep and special partnership with the EU – or predict the conclusions of the negotiations. It also contains a significant number of caveats and is hugely dependant on a wide range of assumptions.” – BBC House of Lords gears up for marathon 2-day debate on EU Withdrawal Bill… Opposition Peers eye victory on at least a dozen amendments to Theresa May’s controversial EU Withdrawal Bill that arrives in the House of Lords today. Parliament’s second chamber are gearing up for marathon two days of debate, with a record 195 peers demanding a chance to speak – a quarter of all members. After a testy ride through the Commons, the mammoth Bill that aims to bring all EU law onto British books ahead of Brexit day faces an equally rocky spell in the Lords. – The Sun …as Lord Adonis urges peers to back a poll on remaining in the EU Members of the House of Lords will be urged to back a referendum on the terms of any Brexit deal, including giving the public the option of remaining in the European Union. In an amendment to the government’s EU (Withdrawal) Bill, to be tabled today, peers will be asked to defy the Commons and give the final decision on Britain’s future relationship with the bloc to the people. The legislation, which would end the supremacy of EU law, starts its passage through the Lords today and is expected to face criticism from pro-European peers. The bill is likely to be substantially amended before it returns to the Commons in May. – The Times (£) A second Brexit poll looks ever more likely – Rachel Sylvester for The Times (£) The Government welcomes peers’ razor-sharp scrutiny of the EU Withdrawal Bill – Lord Callanan for ConservativeHome > Brendan Chilton on BrexitCentral: The House of Lords has no right to stop the EU Withdrawal Bill Theresa May heads off to China today to boost ‘golden era’ of trade ties Theresa May is to embark on a three-day visit to China to boost “vital” trade and investment ties.The prime minister will arrive in the country on Wednesday and travel to Wuhan, Beijing and Shanghai. She will hold talks with Chinese President Xi Jinping and meet business leaders and students. Issues likely to be discussed include North Korea and climate change. It is not clear whether they will include human rights in Hong Kong. However, Mrs May said the relationship allowed for “frank discussions on all issues”. In recent years, both sides have hailed a “golden era” in UK-Sino relations. – BBC May accused of ‘baffling’ decision to neglect Beijing – The Times (£) Business in Beijing – The Times (£) editorial Angela Merkel ‘mocked Theresa May’s Brexit negotiations’ Angela Merkel had journalists “laughing uproariously” about Theresa May and Brexit, according to an account of a secret Davos briefing. The German chancellor reportedly “poked fun” at the prime minister by relaying a typical conversation to illustrate how Mrs May would not be drawn on what Britain wanted from the EU. Mrs Merkel held a background briefing with a small group of selected journalists at the annual World Economic Forum on the understanding that she was not to be quoted. The report is disputed in Berlin. – The Times (£) Angela Merkel mocks Theresa May’s Brexit negotiations during behind-the-scenes meeting with journalists – Telegraph (£) Liam Fox tells Eurosceptics to ‘live with disappointment’ and accept softer Brexit… Government trade chief Liam Fox today tells hardline Tory Eurosceptics they will have to “live with disappointment” and accept a softer Brexit. In an interview with The Sun he urged senior Brexiteers like Jacob Rees-Mogg and Theresa Villiers to stop attacking Philip Hammond after he said there should only be “modest changes” to Britain’s relationship with the EU post-Brexit. And he dismissed their fears of a ‘Brino’ – Brexit in Name Only – declaring that we’ll be out of the single market and the customs union after the two-year transition period. Mr Fox called for calm among his warring colleagues and unite behind the PM instead of triggering a leadership contest – insisting: “Nothing that would happen would change the parliamentary arithmetic.” – The Sun …before saying Australian firms would rather be in Britain Australia is one of the top countries hoping to do a deal with the UK after Brexit, but a Australian government source has admitted that their firms prefer to work in Britain. Yesterday Liam Fox revealed that the Australian Government complained to him that their technology firms prefer to set up in the UK due to superior intellectual property rights. The Secretary of State made the remarks at a working breakfast at Bloomberg’s London HQ. Dr. Fox said: “I had the Australian government complaining to me a few weeks ago whilst I was there [that] so many Australian companies were coming to set up in the UK”. – BrexitCentral Gibraltar can veto parts of Brexit deal it doesn’t like, says Chief Minister The chief minister of Gibraltar has said he is ready to veto parts of the Brexit deal agreed by Theresa May if it does not work in the territory’s favour. Speaking exclusively to The Independent, Fabian Picardo said he would not accept anything in the deal that was detrimental to Gibraltar’s business or social care systems. While the chief minister said he hoped a good deal would be done with the EU, his intervention points to a nervousness in different parts of the UK over whether Ms May’s deal can deliver the economic benefits currently enjoyed by Britain’s membership of the bloc. – Independent Matthew Goodwin: The Mogg is right – a soft Philip Hammond Brexit would be electoral suicide for the Tories Leavers were always crystal clear about their motive. As almost every academic study since the referendum has shown, Leavers wanted to end freedom of movement, preferably lower immigration and also reclaim their national sovereignty. Yet despite this growing pile of evidence even now some Conservatives seem to be in denial about these basic facts. Chancellor Phillip Hammond, among others, talks of Brexit resulting in ‘very modest’ changes and suggested that the ‘smaller the changes’ to Britain’s access to the European market the ‘better’. – Matthew Goodwin for the Telegraph (£) Marcus Fysh: We need a Brexit Cabinet, not this one with Remainers dooming us to failure I’ll let you into a secret: we can negotiate trade deals with other countries now, and have them ready for when we leave the EU, without the EU’s permission. It would be no victory for us to get the EU to allow us this, and the Government should stop its pretence that it would be. The EU does not have a veto, and the UK government should not give in to any such interpretation… This is a time for a Brexit Cabinet made up of people who understand the issues and trade-offs properly. The current one simply doesn’t cut it, the advice they are being given is dreadful, and they do not have the nous to see it, falling instead for the same canards about anything but the status quo being disastrous which prompted many of them to vote Remain – Marcus Fysh MP for the Telegraph (£) Matt Ridley: Divergence is the big prize that Brexit offers I am arguing that the big prize is future differentiation, allowing Britain gradually to become a country that aims for similar outcomes as the EU in regulating innovations, but by different methods, ones that (I hope) do less to stifle innovation and competition. This means there might be neither an immediate Brexit pain nor an immediate Brexit dividend. So long as the European Court of Justice cannot strike down our rules, then the future could be a happy one for both sides. – Matt Ridley for the Times (£) James Forsyth: Don’t sweat the Brexit transition deal There are many things to worry about with Brexit, but the terms of the transition should be pretty low down that list. The transition was always going to have to be off-the-shelf (if you could negotiate a bespoke transition, you might as well do the final deal) and as long as it is time-limited, it shouldn’t be a problem. Indeed, it should help smooth out Britain’s exit from the European Union.Bill Cash’s urgent question today was another sign of how some Tory Eurosceptics are becoming more and more concerned about the terms of the transition, and how it will make Britain—in effect—a non-voting member of the EU.- James Forsyth for The Spectator Brexit comment in brief Government needs to offer a clear vision for UK diplomacy in Europe – Tom Tugendhat for The Times (£) EU elite’s disdain for democracy fuels the far Right – Laura Perrins for ConservativeWoman Improving Chinese visas must be a priority for post-Brexit Britain EU – Emma Haslett for City A.M. Enough. Let’s leave now! – Bruce Oliver Newsome for CommentCentral The Moggcast: Johnson is ‘an amazingly charismatic figure. He’s a leader’ and ‘the Chancellor is opposing Government policy’ – ConservativeHome The UK should put a trade deal with the US top of the priority list – David Campbell Bannerman MEP for City A.M. Brexit news in brief Anna Soubry urges the Prime Minister to show leadership on Brexit – BBC Babiš to EU: If you think I’m bad, Czech out the other guy – Politico Brexit spurs more UK startups to set up in Europe – City A.M. Corbyn told: don’t hide behind leftwing myths on single market – Guardian Fifth Cabinet minister gives backing to Sun’s Brexit stamp campaign – The Sun Boris Johnson accused of failing to organise his own office for Brexit – Guardian And finally… Defence Secretary Gavin Williamson orders EU flags down and for British flags to be flown at the MOD Defence Secretary Gavin Williamson has ordered all EU flags be removed from MoD headquarters. Sources said he was stunned to find them at the London HQ, including outside meeting rooms. So he told officials to take down the blue flags adorned with 12 gold stars and replace them with Union Jacks to boost “British pride.” An insider, said: “Gavin said he saw no reason why they should waste any time on delaying the removal of the EU flags. He wants more British pride displayed around the building as Britain gets ready to quit the EU.” The symbolic salvo comes despite his campaigning for Remain. – The Sun