Road to Brexit #3: January 2018

(Title Image: Cambridge University)

Details worked out; trade talks set to start

The UK and EU negotiating teams reached agreement on the first phase of Brexit talks on December 8th. The first phase included negotiations on the “divorce bill”, status of EU citizens in the UK and other specific issues such as the Irish border.

The deal includes:

  • The UK remaining in the EU single market and customs union until December 31st 2020.
  • The UK will continue to participate in EU programmes (i.e. CAP, Objective One) until 2020.
  • No “hard border” will be created between Northern Ireland and the Republic of Ireland and no regulatory barriers will exist between Northern Ireland and the rest of the UK.
  • The UK will pay into the EU’s budget in 2019 and 2020 as if it were still a member and will make a financial contribution to cover outstanding budgetary commitments. It’s estimated this “divorce bill” will cost anything between £35-39billion.
  • There will be reciprocal rights for EU and UK citizens (and their family members) to live and work where they currently are.

This effectively means that a “Hard Brexit” is stalled and “Soft Brexit” (more here) has won the day for the time being; the agreement means the UK having a paired down Swiss-style relationship with the EU until a lasting free trade agreement can be hammered out.

The divorce bill also means Brexit is going to cost at least £224million a week over three years. Stick that on a bus.

Irish play hardball on a “Hard Border”

The Republic of Ireland’s “play tough” stance on the UK-Irish border proved a major stumbling block in attempts to close a phase one deal.

EU negotiators wanted the border issue settled before moving to trade talks; the Irish Government want an open border with no customs checks, while the DUP – who are propping up the Conservatives in Westminster – were determined not to create any hard border between Northern Ireland and the UK mainland. Ultimately, this led to a provisional agreement being withdrawn on December 4th.

David Davis to MPs: “Impact Assessments Don’t Exist”

On December 6th, the UK’s Brexit Minister, David Davis MP, made a shocking admission that detailed impact assessments on what Brexit might mean for different economic sectors simply didn’t exist.

Opposition MPs had long pressed, and won, a case for the publication of these impact assessments, which the Minister said in an interview were very real. However, he told MPs that he didn’t hold economic assessments in a high regard because “they have all been proven wrong”.

All this suggests the UK Government haven’t even done the most basic background work to ensure a smooth Brexit for the economy.

Labour goes missing when “Standing up for Wales”

A vote on an amendment to the Brexit Bill – which would’ve ensured that Brexit only happens with the approval of the devolved administrations – was resoundingly defeated by 318 votes to 52 on November 14th.

All Welsh Labour MPs – except Albert Owen MP (Lab, Ynys Mon) – abstained. Although this wouldn’t have made any mathematical difference to the outcome, it would’ve made the vote much closer and sent a message. One reason for the abstention was, apparently, the poor drafting of the amendment which included reference to the Northern Ireland Executive which currently doesn’t even exist.

However, not for the first time Labour have been found dozing when “standing up for Wales” and Plaid Cymru have made up very little political ground in pointing that out.

Bank of England “expecting 75,000 City job losses”

The Bank of England has reportedly prepared for as many as 75,000 job losses in the City of London financial sector after Brexit, with the final number largely dependent on what sort of trading deal the UK secures with the EU.

It’s expected many jobs which involve trading in euros could move to Paris or Frankfurt if the EU decides to impose location restrictions.

There’s some argument between forecasters on precisely how many jobs could go/move, with estimates ranging from 10-30,000 in the few years after Brexit to as many as 200,000. Also, despite the prospect of these losses, London is still expected to remain the largest financial centre in Europe.

The Bank of England later moved to calm fears over regulatory differences by setting out plans to keep current financial and banking trading conditions as they are after Brexit.

Gordon Brown reaches bargaining stage of grief

Former Prime Minister, Gordon Brown, believes Leave voters could be convinced to cancel Brexit if they are made to understand that many of the benefits promised to them in June 2016 by the pro-Leave campaign will fail to materialise.

He believes this will result in a “crisis point” and the UK could yet stay in the EU if a “game-changing” deal is offered in summer 2018 on issues like migration, court jurisdiction and finance.

All I have to say is, “Remember ‘The Vow‘”.

Welsh Government set up £50million “Brexit preparedness fund”

On January 8th, the First Minister announced a £50million fund to help Welsh businesses prepare for the eventualities of Brexit. £10million will be made available immediately, with the rest of the money ring-fenced and released as needed through the withdrawal period.

Carwyn Jones said, “Developed in partnership with our businesses and public services, it will provide targeted and innovative support, which will help them survive and, indeed, thrive outside the EU.”

The move has been welcomed by opposition parties, though both the Conservatives and Plaid Cymru said the decision should’ve been taken sooner.