RPP Brexit perspective in 2017

Overview

Following the quiet Christmas and New Year period Brexit came storming back into the news with the resignation of UK Ambassador to the EU, Sir Ivan Rogers. He has been replaced by Sir Tim Barrow, please see article below.

 

Highlights

  • At a speech for the Charity Commission Theresa May said Brexit can ‘change Britain for the better’. The PM said she wanted the UK to “operate within” the single market as part of a new relationship with the EU. Thresa May also criticised those referring to a “hard” or “soft” Brexit saying she did not accept these terms.
  • Sturgeon reiterates Scottish referendum threat: Scottish First Minister Nicola Sturgeon has said she will hold a second independence referendum in Scotland in the event of a “hard” Brexit.
  • Ruth Davidson calls for single market access: The leader of the Scottish Conservatives has said she wants the UK to have the “largest amount of access” to the single market. Speaking to the BBC she said that free trade was more important to her than immigration.
  • Major Conservative Party donor threatens to stop funding over PM’s plans: Sir Andrew Cook, who has given more than £1.2m to the Conservative Party has said he will withdraw his funding if Theresa May plans to remove the UK from the “critical” single market after Brexit.
  • Brexit means ‘new Ireland-UK relationship: EU agriculture commissioner Phil Hogan has said that the Republic of Ireland’s relationship with the UK will have to change once the UK leaves the European Union. Writing in The Irish Times he said “there is a real risk that Ireland could allow our relationship with Europe to be defined by our relationship with the UK, which would be an enormous mistake in my view.” He also warned that if the UK leaves the EU single market a “hard border” with Northern Ireland looked inevitable.
  • UK demand for Irish passport up 40% in 2016: Irish Foreign Minister Charlie Flanagan has said that the passport service has been “exceptionally busy” with a 40% rise in applications from UK citizens, the Financial Times reports.
  • UK in ‘front seat’ for US trade deal: Boris Johnson has gone to Washington to meet the President-elects new team and senior Republicans. After talks Senate Foreign Relations Committee chairman Bob Corker said a US-UK trade deal would be a priority.
  • Jeremy Corbyn backtracks on freedom of movement: Jeremy Corbyn has announced that he is not “wedded” to free movement of people from the EU after Brexit. Corbyn has previously been in favour of free movement and says Britain should prioritise single market access to immigration controls. During a day of "relaunch" for Mr Corbyn, amongst other policy initiatives and position statements, Jeremy Corbyn managed to contradict his own position on immigration.
  • UK considering £1,000 levy for hiring EU workers: Immigration minister Robert Goodwill said that the government is considering imposing a £1,000 levy for skilled EU workers recruited by British reporters. Mr Goodwill told a House of Lords committee that an “immigration skills levy would be helpful to British workers who feel they are overlooked in favour of migrants getting jobs they themselves would like to get.”
  • Lord King says Brexit brings ‘real opportunities’: Lord King, the former governor of the Bank of England, said in an interview with the BBC Today programme that the UK should be “self-confident” about leaving the EU and that there were “real opportunities” for economic reform and new trade deals which meant Brexit could be a success.
  • City of London lobbying group drops demand for EU ‘passport’: The City of London has retreated from demanding continued access to the single market in any post-Brexit deal with the EU, according to its principal lobbying group. TheCityUK is now pinning its hopes on building a deal around “equivalence”, a relatively new legal concept embedded in some but not all EU financial regulation.
  • Mark Carney changes his tune on Brexit: The EU has more to lose from Brexit than the UK, the Governor of the Bank of England has said as he admitted that Britain's economy will defy his own gloomy forecasts and grow at a faster rate than expected. The Bank of England is now “very likely” to improve its economic forecast next month.
  • Pound falls to 31-year low against the Dollar: Worries over a hard Brexit as well as a widening of the UK's trade deficit drove the £ down to 1.2037 against the $ on Wednesday 12th, however the £ has now rebounded to 1.23 and is now at 1.22, following events related to President-Elect Donald Trump.
    However, the UK’s manufacturing sector grew at the fastest pace for two and a half years in December as the weaker pound helped to increase exports, figures released on Tuesday 3rd January showed. The Markit/CIPS survey rose to 56.1 in December, higher than had been expected by economists and up from a revised 53.6 in November. Anything above 50 indicates expansion, anything below contraction.


Written by RPP Head of London Office, Andrew Brown

Will 2017 be the defining year for Brexit?

Whilst 2016 saw the Referendum result and fallout, 2017 could be the defining year for Brexit.

We hope and expect there to be greater clarity on both the UK Government’s position as well as the positions of the other 27 Member States and the EU Commission, as the year progresses. The triggering of Article 50 is expected to take place by the end of March but before that there will be a UK Supreme Court judgement in January on whether the UK Parliament needs to be consulted before this happens. The judgement is due this month but it could significantly delay the process if, for example, if the Devolved Administrations are asked to give their say in the triggering of proceedings and are required to vote and give their consent for Brexit. These are two major developments that will help define the course of how the Brexit discussions are conducted in 2017 and also set the tone of the debate, both within the political sphere and the public.

However, political developments are moving at a fast pace already this year and there have been changes to the decision making process in Northern Ireland which could already impact upon the Brexit decision making process within the UK. Not least, decision making at the Stormont Assembly in Northern Ireland could be returned to the UK Parliament whilst the political crisis there is resolved. This political crisis came about through the mismanagement of a renewable energy scheme called the Renewable Heat Incentive (RHI) and that has now led to the First Minister, Arlene Foster, having to resign and the possibility of fresh elections to the Assembly taking place this year.

As the year develops there will be more information regarding the Governments negotiating position on the Article 50 discussions. So far, there has been little in the way of specific aims and objectives apart from 10 Downing Street reiterating that they want to get back control of immigration and curb the free movement of people from the EU. Such a position would almost certainly mean that the UK would also no longer form part of Single Market, although there has been speculation of the UK paying into the EU budget for access to certain market areas. Again, there is a growing expectation that more detail will be forthcoming in 2017 and a key note speech is due from the Prime Minister, Theresa May MP, in January or February, before the triggering of Article 50. Interestingly, 10 Downing Street has also tried to move on from the preoccupation in the UK media with the triggering of Article 50 to other domestic issues, such as healthcare provision and energy.

Perhaps more importantly, in the coming weeks, the UK Parliament will have a say on some form of UK Brexit Plan before March. This was agreed between the Government and the Opposition Labour Party in late 2016 after an Opposition Day Parliamentary debate in the House of Commons on Article 50. At the end of the debate there was a vote on the Motion, by 448 vote to 75 MP’s, with ‘a call on the Government to invoke Article 50 by 31st March, 2017’, as the wording of the Motion outlined. Also in that debate, the UK Government’s March deadline was approved by a cross-section of MPs, although not by the Scottish National Party, the Liberal Democrats and some Labour MPs.

This development should ensure that the House of Commons will vote to trigger Article 50 if there is a Government Bill asking for that to happen. A question remains over the how the House of Lords will deal with this Bill. The Bill might only be a few lines long and is currently under consideration by 10 Downing Street. However, the Government will be wary that there is opposition in the Commons and the Lords to the way they have conducted Brexit discussions with the opposition Parties, with those Parties asking to be both better informed and also to have a greater say. They want a bigger role for the UK Parliament and to some extent the Devolved Administrations and that is why the next few months will be so interesting with regards to what outcome is reached by the Supreme Court judges and whether or not Article 50 can be triggered by March.


Written by RPP Director of Policy and Advocacy UK, Mark Walker

Wanted: Fresh blood in the European Parliament

RPP’s Thomas Krings, builds on Paul Taylor’s Politico Article on the new President of the European Parliament.

On January 17th, the new President of the European Parliament will be elected and with Europe weighed down by Brexit, the migration crisis, austerity measures and upcoming national elections, MEPs must decide which candidate has the vision, political will and ability to overcome rising Euro-scepticism and to lead the European Parliament as the democratic representation of half a billion EU citizens through all these different challenges.

Currently seven MEPs have thrown their hat into the ring:

  • Antonio Tajani, European People’s Party Group (EPP)
  • Gianni Pittella, Socialist Group (S&D)
  • Helga Stevens, European Conservatives and Reformists Group, (ECR)
  • Guy Verhofstadt, Liberal Group (ALDE)
  • Jean Lambert, Greens 
  • Eleonara Forenza, European United Left (GUE)
  • Laurentiu Rebega, European Nations and Freedom Group


Between improbable alliances and unpopular candidates, the election of Martin Schulz’ successor is becoming very interesting, but at the same time it is not:

During the past legislatures, the EP has always had an agreement, in particular between the bigger political groups, that they would “share” the EP Presidency during the 5-year term. The EPP Group leader Manfred Weber has therefore made public an agreement which was reached after the last EP election in June 2014 and which states that the S&D and EPP would get 2.5 years each. So German Socialist Martin Schulz has been elected in 2014 and the EPP had served the agreement. According to Manfred Weber it is now the EPP’s turn to take the EP top job. (It has to be said that the agreement has been “endangered” already when Martin Schulz had been campaigning for a prolongation of his term last year and without any doubt, Schulz leaves large shoes to be filled after having had the EP President’s job for the last five years. He has raised the EP’s profile considerably and increased the role of the institution within the framework of EU policy making.

The ALDE Group, represented by its Group Leader, Guy Verhofstadt, has co-signed the agreement a couple of days later, in order to get the commitment of EPP and S&D for “the support of “ALDE candidates in the European Parliament”.

The EPP has nominated Tajani who has his political home in Berlusconi’s movement and the S&D and the ALDE Group have nominated their respective Group Leaders Gianni Pittella and Guy Verhofstadt for the Presidential race. So for the Socialists and the Liberals the agreement is not valid anymore.

Paul Taylor from Politico points out that “Europe deserves better than a choice between two dull Italian politicians and a veteran Belgian federalist out of sync with public opinion as the next President of the European Parliament” and he sees the risk of “throwing away the gains of Schulz exceptional five-year tenure.”

By highlighting these three candidates, Taylor has already narrowed the shortlist regarding the candidates who will have the best chances to be elected. All the other candidates do not stand a fair chance of getting elected to the top job. Many MEPs deplored that neither the EPP, nor the S&D have nominated a female candidate for the post. Although in the ALDE Group, French Liberal Sylvie Goulard had been put forward by various national delegations within the ALDE group as a suitable candidate, she withdrew when it became clear that Group Leader Verhofstadt had an eye on the job for himself.

Interestingly, the Greens have nominated a British candidate for the EP President post, deliberately at the time when the UK is about to leave the EU. The Greens have done so to underline their view, of the “absurdity of the candidates chosen by the other groups”.
By the way, VoteWatch Europe had calculated in a Gallup poll 331 solid votes for Antonio Tajani, and 329 solid votes for Gianni Pittella in the absence of a specific and party-whipped deal. After assessing the voting records of 89 ‘kingmaker’ MEPs, they drew the conclusion: 380 votes for Tajani and 369 votes for Pittella.

As the top jobs in the EP are distributed from top to bottom, depending on the final result of the election of the President, the other jobs will be distributed, e.g. the political group which gets a President will get a Vice-President less. The Vice-Presidents and Quaestors will be elected after the election of the President and only after that, the “final tableau” of the MEP Committee memberships will be endorsed.

Whereas the public debate between the candidates, organised by Politico did not reveal too much. There will certainly be surprises ahead on January 17th in Strasbourg, in one way or the other …


Written by RPP Senior Director of Policy and Advocacy, Thomas Krings

Sir Ivan Rogers Resigns

EU Ambassador Sir Ivan Rogers has resigned from his post over difficulties working with Theresa May’s government. Many senior politicians and civil servants have seen it as a major blow to lose one of the UK’s longstanding EU officials, Nicholas Macpherson, the former Treasury permanent secretary under George Osborne tweeted “Ivan Rogers huge loss. Can’t understand the wilful and total destruction of EU expertise.” Sir Rogers has held many high-profile positions including Private Secretary to the European Commissioner Leon Britton and then later to Tony Blair. David Cameron appointed him as his Europe Advisor and he then became EU Ambassador in 2013.

However, Brexiteers are rejoicing at Sir Ivan’s resignation as they do not trust a man who has spent his career in the upper echelons of Brussels. Sir Ivan has not hidden his concerns of the difficult task that the British Government faces with the approaching negotiations and he was recently blasted in the media when it was leaked that he believed securing a trade deal with the EU could take ten years. Iain Duncan Smith said Sir Rogers could not be trusted and had been leaking documents to the press. Nigel Farage said that Theresa May should “welcome it with open arms and put a firm Brexiteer in the position.”

Sir Ivan has however been blamed by some Remainers, and celebrated by some Brexiteers, for his role in David Cameron’s negotiations with the EU prior to the Referendum. It is believed that Sir Ivan convinced the former Prime Minister to water down his demands, which people think led to the underwhelming offer, and then the Referendum defeat.

Sir Rogers resignation did not reflect well on Downing Street, made worse by his farewell letter to his staff that was leaked to the press. His thinly veiled email showed tensions between civil servants and the Government, a largely quoted extract has been, “I hope you will be continue to challenge ill-founded arguments and muddled thinking and that you will never be afraid to speak the truth to those in power. I hope that you will support each other in those difficult moments where you have to deliver messages that are disagreeable to those who need to hear them.”

Sir Ivan’s leaked letter pushed Theresa May to give an interview on Sky news to defend the Government’s Brexit strategy amongst other crisis in the UK healthcare sector that emerged over the Parliamentary recess. Dodging questions on her Brexit plan has become a forte of the Prime Minister but the accusations from an insider that her government was “muddled” forced her to be more open on her Brexit strategy. Her most telling line was “Often people talk in terms as if somehow we are leaving the EU but we still want to kind of keep bits of membership of the EU...We will be able to have control of our borders, control of our laws”. This statement is likely to have sullied the hopes of the Remainers who believe we could have what has been coined as a “soft Brexit”.

With the Prime Minister’s self-imposed deadline to trigger Article 50 fast approaching, Sir Ivan Rogers was replaced swiftly with Sir Tim Barrow. Altogether not a very different figure, another career diplomat who was former envoy to Russia and is currently the political director at the Foreign Office, however he is lacking in the breadth of EU experience that Sir Ivan held. Ministers have said that Sir Tim is a “hard-headed” diplomat and “pragmatic problem solver”. There is confidence around Sir Tim that his ability to negotiate with Russia during this testing period will make him a firm voice around the negotiating table. 


Written by RPP Policy Researcher, Lucy Kerr