Brexit Bulletin: Surrender and Scheduling
The flagship Brexit bill continues its slow journey through Parliament Tuesday and Wednesday. Will the Tory rebels finally live up to all the hype?
So far the bill, which moves European Union-derived rules and regulations into U.K. law, has been a dog that hasn’t barked. Despite repeated threats from pro-European Tory lawmakers that they will vote against aspects of the legislation, Theresa May’s minority government has been undefeated.
That reflects two things: some surrender, but also scheduling. The government arranged the timetable so the most contentious votes will come in the final days, in particular this Wednesday and next, when it will finish its line-by-line scrutiny in the House of Commons. Second, ministers have backed down or offered concessions each time they looked like they faced defeat.
Monday saw the biggest concession so far, when the government said it would accept amendments giving Parliament more power to scrutinize the thousands of law changes that ministers will make as Britain prepares to leave the bloc.
Two big arguments are still outstanding. The one that is likely to be at the forefront this week is proposed by former Attorney General Dominic Grieve and would require May to write the terms of her Brexit deal into a law that would have to be passed by Parliament. That could be a problem if May ends up going for a harder Brexit than most lawmakers want.
The government says its proposed Withdrawal Agreement Implementation Bill fulfills the same objective, but it might not be good enough for Grieve and his allies.
The other sticking point is May’s attempt to write the date of Brexit – March 29, 2019 – into the bill. The government’s justification is that it needs to show the EU it’s serious about leaving, but opponents say the negotiations might take longer. Labour leader Jeremy Corbyn said on Monday it was self-defeating to write the date into law.
The proposed changes will be put to lawmakers this week and next, with the last votes on the detail on Dec. 20. On both remaining points of contention the government looks like it might be defeated. But the fact it hasn’t backed down – yet – suggests ministers think they have a chance.
Fox’s Vision | International Trade Secretary Liam Fox said the U.K. would like a trading relationship with the European Union after it leaves the bloc that’s “virtually identical” to the one it has now, Bloomberg’s Charlie Devereux reports. A trade deal similar to the current arrangements would ensure a smooth transition period, Fox said in an interview. Fox dismissed EU Chief Negotiator Michel Barnier’s warning that a Canada-style trade deal is the best the U.K. can hope for given Theresa May’s red lines.
Manufacturers’ Voice | U.K. manufacturers are pushing May to give them a key role in Brexit negotiations so they can defend the interests of business as Britain leaves the EU, Bloomberg’s Alex Morales writes. Industry advisers on customs, logistics and exports should be on hand during talks in Brussels to inform ministers and civil servants how different proposals would affect trans-European supply chains, Stephen Phipson, the new chief executive of the manufacturing lobby group EEF, said in an interview. “In an ideal world, nothing would change for business.”
Unequal Risks | Leaving the EU with no deal in place could cut U.K. growth by almost 5 percent over the following decade, according to the Santa Monica, California-based Research and Development Corporation. The EU, by contrast, would lose 0.7 percent in growth over the same period if it fails to agree to a new trading relationship with Britain.
Talking Transition | May said the transition deal still needs to be negotiated, suggesting the U.K. isn’t ready to accept the off-the-shelf agreement being offered by the EU. As far as the EU is concerned, Britain has to maintain all the rules and remain a member in every respect except voting rights. She hopes for an agreement “early in the new year” after a few “details” are worked out.
Labour Stance | Labour leader Jeremy Corbyn said it was unnecessary to set in law the date of Brexit, as the government is proposing to do in an amendment to its landmark Brexit legislation. Britons would prefer to wait and get a good deal than rush to an artificial deadline, he told Parliament on Monday.
View from the Farm | Brexit is throwing up unprecedented problems for farmers, according to Ben Drummond, a third-generation farmer in southwest England. Plans to expand his family’s 150 acres (60 hectares) of strawberry patches in Herefordshire are now on hold. Growers have little idea how immigration rules, tariffs or farm subsidies will change. Brexit uncertainty, and a weak pound, are already deterring Europeans from coming for seasonal jobs, and forcing farmers to cut plans to expand or seek other ways to raise income, Manisha Jha reports.
Brexit on the Rock | Brexit Minister Robin Walkers met Gibraltarian officials in London to discuss the impact of the divorce on the enclave. They discussed financial services, taxation, and the implementation period. The U.K. promised to ensure continued market access from Gibraltar to the U.K. after Brexit.
On the Markets | U.K. bonds headed for the biggest gain in a week, pushing yields lower as markets were spooked by the domestic political noise that followed last week’s agreement.
U.K. Shadow Chancellor John McDonnell is preparing to meet Goldman Sachs Group Inc. as part of his self-styled “tea offensive” to win over businesses to his hard-left agenda.
In a further sign that companies are starting to take seriously the possibility of a Labour government, the New York-based bank approached McDonnell to ask if he would be willing to meet with Richard Gnodde, chief executive officer of its overseas operations.
“I said of course I would,” McDonnell told Bloomberg. “We’ll make him a cup of tea and throw in some rich teas as well.”
Sebastian Howell, a spokesman for Goldman Sachs in London, declined to comment.
McDonnell argues that banks and businesses, previously fearful of his views – which include drawing on Karl Marx for inspiration – usually leave their meetings “feeling reassured.”
Maybe that was before Jeremy Corbyn said Morgan Stanley was right to fear his party.
©2017 Bloomberg L.P.