The frenetic pace of Brexit continued this week with the result of the Supreme Court case on whether Parliament is needed to grant permission to enact Article 50, quickly followed by the Government's tabling of the European Union (Notice of Withdrawal) Bill, please see first two articles below. To cap off a busy week in Parliament, the Prime Minister jetted off to the US to speak before the Congressional Republican retreat in Philadelphia.
- Donald Trump poses a threat to the EU’s survival, Philip Hammond has warned the world’s elite: Speaking in Davos, the Chancellor told the World Economic Forum that Brussels should be more worried about the new US President than the destabilising effect of Brexit. Mr Hammond said: “Brexit has introduced uncertainty. I think the change of administration in the US has introduced an even bigger piece of uncertainty for the European Union.”
- Claude Bartolone, Speaker of the French lower house of parliament warns the Prime Minister: “Theresa May will provoke a trade war with the rest of Europe if she cuts corporate taxes to attract businesses after Brexit, a leading French politician has warned. His words, in an interview with The Times, will fuel concern in Whitehall that Paris will prove to be an obstacle during the Brexit negotiations. Mr Bartolone voiced the widely held view in France that if Europe made concessions to Mrs May, other member states would want to follow Britain’s example and quit the EU.”
- Industrial Strategy: May’s plan for post-Brexit ‘industrial revolution: “Britain will slash bureaucracy, boost broadband coverage and improve transport links in a post-Brexit industrial strategy, the Prime Minister announced on 23rd January. Theresa May also wants to introduce a fund to invest in smart energy technologies, artificial intelligence, robotics and the 5G mobile network. In a Green Paper, she will set out the ten pillars that underpin the strategy, including getting firms to identify any red tape that can be cut after Britain leaves the EU.
- May warned not to start trade negotiations with Trump: “EU leaders have warned Theresa May that Britain remains barred from negotiating new trade deals as she prepares to visit Washington to open talks with Donald Trump on an “early” agreement. Mrs May said that she would speak to the new president about Britain’s “future trading relationship” when she visited the White House on Friday 27th. Downing Street said later that the two leaders would “discuss how we can deepen our already huge economic and commercial relationship to the benefit of both of our countries, including our shared ambition to sign a UK-US trade deal once the UK has left the EU.
- Michel Barnier says EU can’t stop May from starting trade talks with Trump: Britain is still ‘part of the EU’s trade policy,’ the European Commission’s Brexit negotiator warns, but the EU can’t stop Britain from negotiating a new trade deal with the United States, the Commission’s chief Brexit negotiator said “What could prevent countries from talking?”
- Quarter of Labour MPs to defy potential whip by voting against triggering Article 50: About 60 Labour MPs are preparing to defy a party order to vote in favour of triggering article 50, with frontbenchers expected to resign if a three-line whip is enforced. Labour MPs said they were certain a three-line whip, which is used for the most critical votes, would be imposed on MPs. Jeremy Corbyn has made clear that Labour MPs would be asked to vote for triggering article 50 because his party does not want to block the Brexit process. Three Shadow Ministers, Jo Stevens MP, Tulip Siddiq MP, and Daniel Zeichner MP have already resigned as Shadow Ministers, with Thangam Debbonnaire MP, a Shadow Whip, also resigning.
- Irexit can't be ruled out, says former Irish diplomat: Dr Ray Bassett, who also served as ambassador to Canada, has said an 'Irexit' from the EU needs to be considered if Brussels fails to offer satisfactory terms in any Brexit deal.
- EU's Brexit chief wants 'special' deal to allow access to the City: The EU may look to negotiate a “special” relationship with the City of London as part of the Brexit process to avoid "financial instability", according to reports. Unpublished minutes detailing a closed-door meeting between MEPs and Michel Barnier, indicate the EU may be hesitant to cut off access to Europe’s biggest financial centre.
- Finally, UK economy grows by 0.6% in fourth quarter: The economy grew by 0.6% in the October-to-December period, the same rate as in the previous two quarters, according to an initial estimate from the Office for National Statistics. Strong consumer spending helped the UK's economy to grow faster than expected at the end of last year.
Written by RPP Head of London Office, Andrew Brown
Supreme Court Decision – Defeat for Govt
On Tuesday 24th January, Article 50 of the Lisbon Treaty was considered by the Supreme Court judges and the Court delivered its verdict. Parliament will get a role in scrutinising the Brexit process and there will need to be a vote in both Houses of Parliament in order for it to be triggered. You could say, Parliament reigns supreme, as many Leave campaigners wished for in the first place.
Whilst the Government was defeated on the main aspect of the court case, Parliamentary approval for Article 50, the case wasn't just a battle over the powers of the executive and the legislature. The justices heard a number of separate but related challenges to the government's Brexit approach, centred around the involvement of the devolved administrations in Scotland, Wales and Northern Ireland. But the court unanimously ruled that devolved administrations did not need to be consulted, and did not have a right to veto Article 50. The government has however assured that Scotland, Wales and Northern Ireland will be kept fully involved.
On Thursday 26th, the UK Government published its Parliamentary Bill on the triggering of Article 50, which consisted of two clauses. This shows how important the UK Government is taking the Court decision and suggests that they were fully prepared to lose the case and wanted to act decisively in order to mitigate any damage caused by their defeat. However, the Supreme Court decision is only the start and not the end of the Article 50 triggering process and after that the negotiations with the EU Institutions could take up to two years or more to complete. More details are emerging, though, of what a post-Brexit UK might look like, how its newly created Departments for exiting the EU and for negotiating international trade agreements might evolve and take on the challenge of further rooting the UK in the global free trade community, how the UK's life sciences industry will adapt, what will the regulatory environment look like. The Supreme Court decision passed the by the judges 8-3 in ruling against the UK Government’s case. Interestingly, one of the Supreme Court judges, Lord Robert Carnwath, has subsequently said after the Court case decision that the ‘judges should never have been allowed to rule on how Brexit should be triggered because it is a matter for politicians and not the Courts. Lord Reed and Lord Hughes were the other judges which decided that the Prime Minister, Theresa May MP, was within her rights to use the power of the Royal Prerogative to trigger Article 50. The Court case made British history but it remains to be seen what other, perhaps longer-term, legacy this decision will have on the exercising of the Royal Prerogative by the Prime Minister of the day.
Written by RPP Director of Policy and Advocacy, Mark Walker
European Union (Notice of Withdrawal) Bill
With the result of the Supreme Court decision predicted to go against the Government for some time, it is not surprising that the Government was preparing for this eventuality. It is also important for the Prime Minister to maintain the momentum from the speech she gave on the 17th January, which was widely applauded and helped to dispel some of the criticism that she had received over her handling of Brexit.
With this in mind, Prime Minister's Questions on Wednesday 25th January, saw the Mrs May, get the upper hand on Jeremy Corbyn. Before the Leader of the Opposition has his opportunity to ask the PM six questions, it is tradition that a backbencher asks the first question. With a cleverly planted question from Chris Philp (formerly of the Remain campaign) about the need for a “government white paper laying out our vision for a global Britain”. The PM calmly responded: “I can confirm that our plan will be set out in a White Paper published for the House”.
It was clear from the difficulties that Mr Corbyn then faced when asking his questions, and the disgruntlement from the Labour benches, that the main thrust of the Leader of the Opposition's questions was going to be calling for a white paper.
The following day, the Government announced a very short, but very significant bill, titled the European Union (Notice of Withdrawal) Bill, see photo above. Secretary of State for Exiting the EU, David Davis MP said:
“The British people have made the decision to leave the EU and this government is determined to get on with the job of delivering it. So today we have introduced a Bill in Parliament which will allow us to formally trigger Article 50 by the end of March. I trust that Parliament, which backed the referendum by six to one, will respect the decision taken by the British people and pass the legislation quickly.”
With the First reading on the 26th January, the Second reading debate on Tuesday 31st Jan and Wednesday 1st Feb, followed by the Second reading vote again on the 1st Feb, and the Committee and Report stages, and then Third reading on Monday 6th, Tuesday 7th and Wednesday 8th February.
Written by RPP Head of London Office, Andrew Brown
Health Select Committee – Brexit Session
On Tuesday 24th January, Secretary of State for Health, Jeremy Hunt MP, went before the Health Select Committee to discuss the impact of Brexit on the NHS, and healthcare in the UK.
Reflecting the Government's policy of positivity towards Brexit, and as a former supporter of the Remain campaign, Mr Hunt told MPs, Brexit can be “a great catalyst for positive change” in health and social care. Whilst the NHS, will not be as affected by Brexit as the pharmaceutical industry and other parts of the Life Science sector, or other parts of the British economy, there are some key issues that Mr Hunt was questioned on. They included the European Health Insurance Card, EU nationals working in the NHS, and the future of the European Medicines Agency.
Most importantly for the NHS will be the impact on EU nationals working in the NHS and the ability to recruit more. Mr Hunt said that the NHS relies too much on foreign-trained doctors, and that “about 8,000 a year” needed to be trained for the NHS to be self-sufficient. However, he also recognised that the NHS will continue to rely on staff from the EU “in the short term” and that it was government policy to protect the 90,000 EU citizens working in social care. He said that “at every stage of this process I have praised the work of foreign-born doctors… the NHS would fall over without them.
Mr Hunt was however unable to reassure about if the UK will be able to keep health benefits the we currently enjoy, such as the European Health Insurance Card which allows free or reduced cost healthcare in Europe. When former shadow Health Secretary Heidi Alexander asked Mr Hunt about the future of this scheme and if the UK will be negotiating 27 separate agreements with each EU member states on matters such as the EHIC card, he said: “I hope not.” Matters such as this, as well as the Cross Border Healthcare Directive, which is extremely important for patients with rare and ultra rare diseases, will have to be negotiated once talks begin.
Perhaps most concerningly for the pharmaceutical industry and the Life Sciences Sector, Mr Hunt confirmed that Britain would leave the European Medicines Agency (EMA), although he stated that he was “very hopeful” to keep working “very very closely” with the regulator. He also confirmed that it was also “likely” the regulator’s headquarters would move out of the UK, where it employs 890 people. Whilst it will be difficult and disruptive for the EMA to move its operations and all its staff, it seems almost inevitable that this will happen, although as we've discussed in previous newsletters it is far from inevitable which European city will win the fight for this important agency.
In a separate Parliamentary scrutiny committee on the 10th January, the House of Lords Science and Technology Committee in its inquiry into how the life sciences industry will be impacted on by Brexit looked at the MHRA's evidence session. Professor Sir Michael Rawlins, Chairman of the MHRA, gave oral evidence to the committee on the impact of Brexit on regulations and standards. He said that he thought the UK would most likely adopt a similar approach to what it was currently involved in with the EU. This is because the UK is currently responsible for 15% of clinical trials in the EU and that it also has a disproportionate level of influence on the decision making processes within the EMA, it is still joining EMA sub-Committees, for example, and its expertise is still greatly needed in regards to legislation and the enforcement of regulations. Furthermore, as Professor Sir Michael Rawlins pointed out, the UK will still have to import and export healthcare products from the EU and hence have to conform to their regulatory standards and for that reason alone he did not see there being so much change from a MHRA perspective. He did say that his own organisation would most likely need to take on new responsibilities and that it was ready for that challenge. A final thought on the impact of Brexit on the UK Life Sciences Sector, on the 21st January the Government published more information on its industrial strategy and that also contained a lot of information regarding the Government's approach to life sciences, which will play a key role. The Government will aim to build upon the work of previous Governments, including using so-called 'catapults' to bring like minded life sciences companies together and to enable them to exchange new thinking and ideas. With the clear priority that the Government is giving to the Life Sciences Sector for the future of the UK economy, we can perhaps imagine that the UK's relationship with the EMA, Cross Border Healthcare and other issues will be important aims for the Government's negotiating strategy, but as we all know the Prime Minister is keeping that very close to her chest.
Written by RPP Head of London Office, Andrew Brown
Trump & Brexit
Former UKIP leader Nigel Farage was the first European politician to meet president-elect Donald Trump after his election victory. At first, this seems rather unremarkable since both have been supporting each other’s campaign. During the US presidential campaign Farage appeared at Trump’s events arguing that Britain’s decision to leave the European Union aligned with Trump’s anti-establishment, anti-elite agenda. Similarly, Trump was among the first and most prominent international figures to congratulate the British people on their newly won independence and self-determination.
After Cameron’s resignation, as Prime Minister, Theresa May is primarily responsible for negotiating a fair and beneficial Brexit deal for the UK. Although at first sight, May and Trump seem to be on the same side regarding Brexit, Trump’s public support for far-right politician Nigel Farage is more likely to harm May and her strategy in the long run, Trump went as far as to tweet “Many people would live to see Nigel Farage represent Great Britain as their Ambassador to the United States. He would do a great job!”. May is currently facing serious opposition from the remain-camp in parliament and the public and it would be preferable for her to have cross-party support from the entire Leave-camp. Yet, Trump’s continuous support for Nigel Farage’s far-right anti-EU rhetoric could encourage the latter to publicly undermine May’s position and divide the Leave-campaign, which in the end would weaken the government’s position in the upcoming Brexit-negotiations with Brussels. Moreover, Theresa May needs additional policy options, with which she can use to counter possible negative effects on the national economy after the UK has left the EU. The most prominent of all options is strengthening the transatlantic ‘Special Relationship’ with the US. In Trump’s first call with May, during which Trump apparently told May to drop in when she is in the country – keeping in mind Trump welcomed Farage as first UK politician and not May or a governmental representative – doubts arise whether President Trump will give the relationship with May the kind of attention she needs to develop a deal between the US and the UK that could outweigh the role and impact of the EU. This could be especially true if May is forced by British public opinion to rebuke Trump for comments towards women, or his policies on torture during interrogation of terrorists. There is also a danger for the Prime Minister that her courting of the new President for reasons of national interest has a toxifying effect on her and the Conservative Party.
Nevertheless, May hopes to benefit from Trump’s presidency, especially from his announced retreat from the Middle East. The Prime Minister hopes to fill the void, a retreating USA is leaving behind, by fostering the UK’s relations with Saudi Arabia and the other Gulf States. In addition, it must not be forgotten that president-elect Trump repeatedly invoked his ‘America first’ protectionist rhetoric as the prime paradigm with which he will scrutinise any policy decisions during his presidency. Thus, it is questionable whether even a revived Special Relationship with a Trumpian America will be as beneficial for May’s UK as she is hoping. Furthermore, for British pharmaceutical companies Trump’s protectionist rhetoric and the potential end of harmonised medical regulations between the UK and the EU may be in the end bad news since they may lose two very important markets. Nevertheless, some argue, that Trump now that he is inaugurated as President of the USA cannot and will not stick as close to his current narratives and strategies, simply because as President he has to acknowledge certain ways of diplomacy and ways of governance. Thus, Trump will closely work with May and support her Brexit strategy and reinforce the Special Relationship. However, the same voices already predicted such a turn shortly after Trump had been elected in early November. So far, such a turn is not recognisable in Trumps policy and strategy. To the contrary, the pace with which President Trump questions long-standing principles of diplomacy and governance – e.g. the one-China policy, defending Russian president Putin against allegations of his very own intelligence community – points to a presidency in which Trump will not automatically continue with the way of governing as his predecessors. This is a very important fact May’s government must consider. Thus, what could Trumps presidency mean for May? First, she has to increase her efforts in keeping the leave-camp together as a coherent front, which will strengthen her position in the negotiations with Brussels. Second, May cannot wholeheartedly rely on the revival of the Special Relationship as a replacement for any economic losses with the EU and has to look for additional partners to assure and strengthen the future of a post-Brexit UK.
Written by RPP Policy Researcher, Anna Rößing