May Calls on Corbyn to Rule Out Second Brexit Referendum

(Bloomberg) -- Brexit Secretary Dominic Raab is updating lawmakers on the progress of talks with the European Union.

The cost to business of a no deal

A no-deal Brexit scenario could end up costing businesses around 18 billion pounds ($23 billion) a year, the two chiefs of the U.K.’s tax and customs authority tells lawmakers in parliament.

Interestingly that’s about the same amount as the the “maximum facilitation model” that has been championed by Brexit supporters.

“Obviously in no deal there will be no zero tariff free trade agreement and therefore no rules of origin for anyone to comply with,” says Harra. “But they will of course instead have to pay the tariffs, and it was always going to be cheaper to have to comply with rules of origin than pay the tariff.”

Earlier this year, HMRC CEO Jon Thompson predicted the maximum facilitation model favored by Brexiteers could cost businesses between 17 billion pounds and 20 billion pounds.

That calculation is based on each customs declaration costing 32.50 pounds, multiplied by 200 million -- the number of intra-EU consignements in 2016 -- and then doubled to account for businesses on both sides of the border. Another 3 billion pounds to 7 billion pounds is added for rules of origin requirements.

In a no-deal scenario, there are no rules of origin requirements though the CBI business lobby group had estimated the EU’s standard common tariff would cost around 5 billion pounds a year, taking the total to 13 billion pounds, he said.

What the tax man is doing to prepare for no deal

Officials at Her Majesty’s Revenue and Customs have started consulting their external software developers to discuss developing a new VAT system that would need to be in place by 29 March 2019 and would be used in the case of a no deal scenario, Jim Harra, deputy chief executive of the authority told lawmakers in Parliament.

The biggest impact of the extra workload is a potential delay to the rolling out of its new Customs Declaration Service for importers or exporters, which is replacing the existing Customs Handling of Import and Export Freight system, he said.

Raab Doesn’t Expect Transition to Be Extended (3:49 p.m.)

“I don’t think so,” Raab said in reply to a question about whether the EU would offer the U.K. a transition period longer than the agreed 21 months -- and whether the U.K. would accept it. “On the implementation period, I think that people want to see some finality to it.”

And if the U.K. isn’t ready by the end of 2020 and is facing a cliff-edge?

“Obviously, we’ll avoid that happening,” Raab said.

Raab: U.K. Can’t Be in ‘Limbo’ on Irish Backstop (3:31 p.m.)

Raab said the U.K. must not end up in a “limbo period that held us indefinitely” in a backstop arrangement with the EU on the Irish border.

He told the committee there are “all sorts of ways” to ensure there’s a legal end date to the so-called “backstop” -- which is a plan to guarantee that there won’t be a hard border between the U.K. and Ireland.

Resolving this issue is key to reaching a deal on Brexit. The U.K. is willing to sign up to keep key EU trade rules as part of this backstop guarantee -- but only on a temporary basis.

Raab is insisting he won’t let the EU decide when such an arrangement can end.

Germany Ready To Accept a Less Detailed Agreement

The British and German governments have abandoned key Brexit demands, potentially easing the path for the U.K. to strike a deal with the European Union, people familiar with the matter said. The pound rose.

Germany is ready to accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a Brexit deal done, according to people speaking on condition of anonymity because the discussions are private.

Brexit Big Hitters at a Parliamentary Committee

Oliver Robbins, May’s Europe adviser, and Raab are before a panel of lawmakers. Many consider Robbins the real negotiator -- and one that does most of his work behind the scenes. It’s rare to see him in this kind of forum and hardliners tend to think he’s seeking the softest of divorces.

When asked about whether there was any part of him that wanted to stay in the EU, Robbins said: “There is no part of my personal views that will ever play a role in how I serve the government of the day."

Germany: ‘Prepared for Anything’ on Brexit (1:10 p.m.)

“To be prepared for all outcomes, preparations must continue for a still-possible no-deal scenario,” spokeswoman Ulrike Demmer said at regular briefing in Berlin. “We are of course prepared for anything.”

Demmer reiterates that time is pressing and that a no-deal outcome would not be in the interests of either side.

Rees-Mogg: Carney Should Step Down as Planned (12:38 p.m.)

Conservative lawmaker Jacob Rees-Mogg said on LBC radio that speculation about Bank of England Governor Mark Carney’s future was demeaning for the role, and called on him to leave on his scheduled departure date in June 2019.

“Playing ducks and drakes with the period of office as governor of the Bank of England is rather demeaning,” said Rees-Mogg, a long-standing critic of the governor. “He should go.”

Rees-Mogg, a pro-Brexit lawmaker who regularly clashed with Carney during his time on Parliament’s Treasury Committee, last month called him the “high priest of project fear” -- the phrase used by euroskeptics to deride what they see as scaremongering by their pro-EU opponents.

Meanwhile John McDonnell, the opposition Labour Party’s Treasury spokesman, told Bloomberg Wednesday that he would welcome the Canadian staying longer.

Lidington: Deal With EU 85% Agreed (12:24 p.m.)

David Lidington, May’s de facto deputy, said during a visit to Poland that an agreement with the EU is 85 percent completed -- with the Ireland border the last outstanding issue to be resolved.

May and her Cabinet remain “very committed” to the Brexit proposal thrashed out her Chequers countryside retreat in July, he said. The plan has come under fire in recent weeks, especially from Brexit hardliners who want a more definitive split from the bloc.

“The great majority of Conservative MPs want this sorted, they want a good deal with EU,” Lidington said in an interview. “What we need now is for EU to continue discussions with us on Chequers, and if there are some bits they don’t like, what is the counter proposal. If they do like it, fine, let’s agree on that.”

U.K.’s Lidington Says Brexit Agreement With EU Is 85% Complete

May Calls on Corbyn to Rule Out Second Vote (12:15 p.m.)

Jeremy Corbyn, leader of the main opposition Labour party, immediately went on the attack over Brexit. May went on the counter-offensive and repeated that a second referendum is out of the question on her watch, and challenged her rival to also take it off the table -- twice. Corbyn did not rise to the bait.

May also paired the referendum issue with the accusations of antisemitism that have dogged the Labour Party -- clearly seeing Brexit as a wedge issue to exploit Labour’s divisions.

Given Labour’s ever-evolving position on leaving the EU, any shift on this would be extremely significant. Corbyn seems to be keeping his options open.

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