Brexit Bulletin: Another Red Line Fades

(Bloomberg) -- Today in Brexit: A shift in the government’s tone on immigration is starting to emerge, just as talks on the future relationship get going. 

The U.K. government is changing its tune on immigration, with the chief Brexit backers lining up to say that taking back control doesn’t mean slashing numbers.

Foreign Secretary Boris Johnson makes the “liberal” case for immigration in an interview with the Telegraph on Thursday: “It is one of the myths of this thing. There are lots of people who voted Leave who are very liberal on migration, who shared my point of view, but see the democratic point of view. It’s about who’s running your country.” He says Britain has flourished by being open to immigrants.

While Johnson, a former mayor of London, has long been seen as liberal on the issue, his comments come as other members of the government are also sounding more laid back about European immigration. Brexit Secretary David Davis said earlier this month that the post-Brexit immigration rules won’t hurt business and the government’s policy will be “free movement of brain power.” He said the number of foreign students and researchers coming to Britain after Brexit is unlikely to change much.

Brexit Bulletin: Another Red Line Fades

Even Prime Minister Theresa May, who was quick to identify freedom of movement as one of the main drivers of the referendum result and is a long-time hawk on immigration, has softened her tone. “U.K. citizens will still want to work and study in EU countries – just as EU citizens will want to do the same here, helping to shape and drive growth, innovation and enterprise,” she said in her Mansion House speech on March 2.

Her nod at enterprise is key. Businesses are worried about how they will recruit staff after Brexit and a shortage of labor is already emerging. Remember that the government still hasn’t said what its post-Brexit immigration rules will look like and doesn’t plan to do so until later this year. Even if the change of rhetoric doesn’t signal a general softening of the U.K.’s negotiating red lines, it shows the government is listening to what business is saying.

Today’s Must-Reads

  • The first formal meeting on the post-Brexit relationship made little progress, as officials picked over the EU’s negotiating guidelines and discussed which topics to prioritize over coming weeks, Ian Wishart reports
  • Theresa May was defeated in the Lords over the customs union, and while the government doesn’t see it as binding, the result could signal further defeats in the Commons in the coming months
  • Pollster Matt Singh finds little appetite among Britons to rejoin the EU after Brexit

Brexit in Brief

No City Rival | Bank of France Governor Francois Villeroy de Galhau doesn’t expect Brexit to lead to the creation of a rival financial center in continental Europe, saying a more “multipolar and specialized competitive structure” will emerge instead.

Clearing Fight | The European Central Bank is seeking major new powers over foreign clearinghouses, upping the stakes in an area that’s a key Brexit battleground.

Bullish on London | InterContinental Hotels Group sees an “incredible” long-term market in London and the U.K., Chief Executive Officer Keith Barr said, shrugging off the uncertainty from Brexit.

No Regrets | Former U.K. Prime Minster David Cameron says he doesn’t regret holding the Brexit vote in 2016, but still wishes the country had voted to remain.

View From Luxembourg | There’s “bilateral interest” in keeping the customs union, and Brexit negotiations are proving “extremely difficult,” according to Luxembourg Finance Minister Pierre Gramegna. “Unfortunately, it’s become evident that being part of the EU single market is key,” he said in an interview with Bloomberg TV. “It was not evident before the vote and now everyone is trying to find ways to mitigate the loss of having this general access.”

Un-British Passports | The new old-style, post-Brexit blue passports are going to be made by a continental company. De La Rue Plc, the 200-year-old British passport printer, said it won’t appeal the U.K. government’s decision to award the new contract to Franco-Dutch rival Gemalto. De La Rue’s shares fell. 

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To contact the author of this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net.

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