Pro-Brexit MPs urge Prime Minister to get ready for no deal
In a letter organised by Economists for Free Trade (EFT) and addressed to the Prime Minister on Saturday, sixty former cabinet ministers, MPs, economists and business figures urged Theresa May to step up preparations for a “no-deal” scenario. The option for the UK to walk out of negations and “take with it the £39bn it has offered to pay as part of a divorce settlement” would give the UK “real leverage in the Brexit endgame,” the signatories, who include former chancellor Lord Lawson, former environment secretary Owen Paterson and former Wales secretary John Redwood, argue. The letter states, “We believe you [the Prime Minister] could also make clear that your preferred outcome is a free trade deal between Britain and the EU, an arrangement that is to the mutual benefit of both parties… However, in light of the reluctance of the EU swiftly to secure a free trade deal… we suggest you make clear your belief that the UK has now to prepare urgently for the possibility that no agreement is forthcoming,” adding, “Accordingly, we believe now is the time to issue instructions to UK authorities to accelerate their preparations for ‘no deal’ and a move to a World Trade Deal under WTO rules.”
Separately, International Trade Secretary Liam Fox said in an interview with BBC broadcasted on Saturday that “Our negotiating partners would not be wise if they believed that the prime minister was bluffing [when saying that no deal is better than a bad deal],” adding, “It’s essential as we enter the next phase of the negotiations that the European Union understands that and believes it.” Fox also warned that a no deal would impact some member states much more than others, saying, “It would be much more now about how individual countries across Europe see their economic well-being being affected by this.” On a similar line, in an interview with the Daily Express, Brexit Secretary David Davis reiterated that no deal remains a possibility, adding that the UK will have a “fantastic” future outside the EU bloc post-Brexit.
Elsewhere, Foreign Secretary Boris Johnson has urged the Government to deliver “a full British Brexit.” In an op-ed for the Sun, Johnson writes, “Across the country I find people who – whatever they voted two years ago – just want us to get on and do it. They don’t want a half-hearted Brexit.” He adds, “Yes of course we will remain close to our friends and partners over the channel,” but “We will have the freedom to bust out of the corsets of EU regulation and rules – to do things our way, to make the most of British leadership in the growth sectors of tomorrow.”
Meanwhile, the Financial Times reports that over 50 Conservative MPs would be ready to prevent the government from crashing out of the EU without a deal . A former cabinet minister source is quoted saying, “There are at least 50 Conservative MPs who would be prepared to vote to stop that happening, which would be more than enough to force the government to take notice.”
Following Airbus’s warning last week that no deal could lead the company to reconsider its investments in the UK, deputy director-general of the CBI, Josh Hardie, has warned that more companies are “being forced to prepare for the reality of a cliff edge and I think we could see more statements like this if negotiations continue as they are.” Hardie said, “We’ve increasingly seen companies talking about speaking out as the possibility of no deal has grown. March 2019 is not far away when you’re talking about the kind of adjustments companies like Airbus would have to make to even be slightly ready for a no-deal scenario.”
Separately, Britain’s five major business lobby groups have warned the Government that they are “deeply concerned” that time is running out to secure a deal that protects businesses. On a similar line, head of BMW UK Ian Robertson told BBC, “If we don’t get clarity in the next couple of months we have to start making… contingency plans – which means investing money in systems that we might not need… which means making the UK less competitive than it is in a very competitive world right now.” Jürgen Maier, the chief executive of Siemens UK, told BBC Radio 4’s Today programme, “I think the realities are setting in and I think it is time to get away from slogans… What we need to do now is to get closer with our European partners and work out what a realistic, pragmatic Brexit is that works for both sides, the EU and ourselves.”
Commenting on the industry’s warnings, a Downing Street spokeswoman said, “It’s right we talk to the industry when they raise concerns… We are listening to their concerns… We are confident that we are going to get a good deal where trade is as free and frictionless as possible.” However, Health Secretary Jeremy Hunt told BBC’s the Andrew Marr Show, “It was completely inappropriate for businesses to be making these kinds of threats for one very simple reason – we are in an absolutely critical moment in the Brexit discussions and what that means is that we need to get behind Theresa May.” Security minister Ben Wallace also issued a veiled threat to Airbus, saying, “When I last checked, if it wasn’t for the customer countries of the A400m [military transport aircraft], Airbus would have not been able to cover the over budget and delays,” and adding, “Aerospace manufacturers need customers. Perhaps they might reflect on that.”
Meanwhile, a study by think tank Centre for European Reform suggests that uncertainty due to Brexit would have so far caused a 2.1 percent decrease in the UK economic output.
A new YouGov poll published last week reveals that, two years after the Brexit referendum, the public is still evenly split on Brexit. According to the poll, 46 percent of the public think leaving the EU was a wrong decision, while 43 percent believe it was correct. Consensus is greater on the public’s view of the Government’s handling of Brexit negotiations, with two thirds of Britons thinking that the Government is doing poorly. However, slightly above one in four people still believe that the Conservative party is the best party to handle the negotiations, against 16 percent for the Labour party.
Elsewhere, an estimated 100,000 people marched in London on Saturday demanding a second referendum on the final Brexit deal. Speaking at the event, Liberal Democrat leader Vince Cable said Brexit was “not a done deal.” Pro-EU politicians from across the political spectrum took part in the event. Separately, The Guardian reports that the grassroots Labour for a People’s Vote group would also be putting pressure on Labour leader Jeremy Corbyn to support a second referendum.
The German Investment Funds Association (BVI), representing German asset managers, has stressed in a policy paper that “proper and unobstructed” access to the services offered in the City is fundamental, adding that “the importance of such access will significantly increase in the event of Brexit,” the Financial Times reports. BVI also urged lawmakers to review the third-country regime for investment companies after the UK leaves the bloc, suggesting that this should be “thoroughly redesigned” as to guarantee “detailed and granular” equivalence in key areas of business. However, BVI also cautioned against “rushed decisions” in amending equivalence rules.
Source: Financial Times
Cabinet minister Andrea Leadsom criticises UK customs partnership proposal as “unwieldy and bureaucratic”
In an interview with The Daily Telegraph, Leader of the House of Commons Andrea Leadsom called the government’s proposal for a post-Brexit UK-EU customs partnership “unwieldy and bureaucratic,” arguing that the issue of customs “does seem to lend itself to a more technology-driven solution.” Under the partnership arrangement, the UK would continue to levy the EU’s external tariff on goods, but could offer a rebate on those that remain in the UK market. Leadsom said, “It has implications for needing to keep alignment with a lot of EU product regulations and so on…The problem with complications, particularly for businesses, they are not keen on more bureaucracy, more red tape. That is potentially a less attractive option for businesses themselves.” She also said that the government’s preparation for ‘no deal’ are “well advanced,” adding, “While no deal is no our preference, it is a very important negotiating point.”
Elsewhere, in a separate interview, Fox said, “If the transition period had to be extended for technical reasons…and we already had the Withdrawal Agreement and the future economic partnership already agreed, I wouldn’t have a major problem with that – as long as it was very time-limited, and there was a unilateral mechanism for Britain to pull out of it if we thought we were being kept in the European Union against our will.”
Speaking at a business festival in Liverpool last week, Business Secretary Greg Clark said that securing post-Brexit efficient mobility for UK workers in the EU was key. Clark said, “So far… the [Brexit] debate has focused mainly on goods, about how our new customs arrangements with the EU need to keep the borders flowing and avoid costly delays and paperwork. But in order to provide services, it is people who must not be held up.” He continued, “We need to recognise that the EU is by far and away the single biggest consumer of our services exports,” adding, “This extraordinary performance has been built on the back of established trading relationships with the EU… As we leave the European Union, we must deliberately set out to maintain these rights and introduce as few new barriers to trade in services as possible. This is every bit as important as avoiding barriers in manufactured goods.”
Elsewhere, a Deltapoll survey of 2,063 adults revealed by Channel 4 News on Friday shows that almost three in four British people support the Government’s policy of reducing immigration figures by “tens of thousands,” while around half of the people surveyed expressed support for the “hostile environment” policy. However, a majority of people also thought that immigration has had a positive effect on the UK, with only 39 percent believing that the effect has been negative.
Yesterday’s mini-summit where leaders of 16 EU countries tried to reach agreement on migration issues ended without a formal joint statement, with instead the Commission issuing proposals for this week’s European Council summit’s conclusions. According to the Commission’s proposals seen by Politico, the Council would support “the development of regional disembarkation possibilities in line with international law and in close cooperation with UNHCR [United Nations High Commissioner for Refugees] and IOM [International Organization for Migration],” strengthening EU border patrol operations, and increasing the number of returned illegal migrants to their home countries. A Council official is quoted saying, “At this stage, no substantial change is foreseen in terms of our draft EUCO conclusions on migration.”
Arriving at the summit, Italian Prime Minister Giuseppe Conte yesterday said, “I’m here to put forward an Italian proposal” articulated in six points and ten goals, adding that this would be “completely new” and “completely overtake the Dublin agreement.” Conte’s proposal for a “European Multilevel Strategy for Migration” calls for “shared responsibility among member states” in dealing with primary movements. The Italian proposal rests somewhat at odds with German Chancellor Angela Merkel’s stress on the need for “bilateral and trilateral agreements” and “common ground.”
Elsewhere, Austrian Chancellor Sebastian Kurz told the Bild newspaper on Saturday that Austria would reintroduce border controls at the Brenner Pass if Germany turns refugees back at its southern border with Austria. Kurz said, “We would be ready and do everything necessary to protect our borders…That would mean securing the border on the Brenner and other locations,” adding however that the hopes to avoid such an outcome.
Open Europe’s Leopold Traugott yesterday appeared on BBC Radio 5, saying EU member states were increasingly entertaining the idea of establishing reception centres in Northern Africa, where asylum seekers could lodge their claims without having to take the dangerous journey across the Mediterranean. Traugott was also cited in The Telegraph, saying that the current conflict about immigration in Germany’s government could “bring the European reform agenda to halt again” if it escalated. On the same topic, he told the Daily Express, “It seems that for now Angela Merkel and her Interior Minister, CSU-leader Horst Seehofer, have managed to kick the can down the road.”
Following US President Donald Trump’s threat to impose further 20 percent tariffs on imports of EU-assembled cars, the EU has announced that it will respond to such a move, should it be confirmed. EU Commission Vice President Jyrki Katainen told French newspaper Le Monde on Saturday, “If they [the US] decide to raise their import tariffs, we’ll have no choice, again, but to react,” adding however, “We don’t want to fight [over trade] in public via Twitter. We should end the escalation.”
Separately, The Telegraph reports that International Trade Secretary Liam Fox would have been told by Speaker of the US House of Representatives Paul Ryan on a recent visit to the US that the UK should be able to “diverge” from EU “geographical indications” protected status for food and drinks post-Brexit, in order to be able to strike a deal with the US.
Elsewhere, former British Prime Minister Tony Blair has warned Trump that if the US fail to stand by its European partners, the latter “will get picked off one by one” into the orbit of rival powers. Blair said, “If Europe does not feel it really has America on its side, the risk for Europe is that individual nations get played by other important geopolitical forces and this is bad for America,” adding, “People in Europe worry about the unpredictability [of the US government] and about whether there is a real commitment to the transatlantic alliance on the basis of values, not simply on the basis of interests.”
Turkish President Recep Tayyip Erdoğan secured a new five-year presidential term after receiving 53 percent of votes in yesterday’s presidential election, after 99 percent of votes have been counted with turnout estimated at 87 percent. Erdoğan’s governing alliance, consisting of the AK Party (AKP) and the Nationalist Movement party (MHP), secured a majority in yesterday’s parliamentary election, with the AKP winning 42 percent of votes and 293 seats, while the MHP gained 11 percent of votes and 50 seats.
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