Road to Brexit #4: April 2018

(Title Image: Cambridge University)

Leaked government report makes “grim” Brexit forecasts

A UK Government report leaked to Buzzfeed in January suggests that the UK economy will take a significant hit due to Brexit regardless of which deal is agreed with the EU.

It suggests economic growth will be 8% lower than if the UK stayed in the EU and reverted to World Trade Organisation (WTO) rules. If a UK-EU free trade agreement the figure would be 5% lower and just 2% lower if the UK continues to apply single market rules.

The Welsh economy was expected to take a 9.5% hit under a “No Deal” Brexit, but some English regions were forecast to come off much worse with double-digit impacts.

Brexiteers have criticised the report as “too pessimistic” and suggested no forecast on the impact of Brexit has come true, while Remainers demanded the report be published in full or for the UK to remain in the single market.

House of Lords: Brexit Bill is “constitutionally unacceptable”

The House of Lords Constitution Committee report on the EU Withdrawl Bill was scathingly critical, saying that without agreement with the Welsh & Scottish governments the process would “have significant constitutional repercussions”.

For a long period of time (until a deal was reached on powers, more further down) the Welsh Government and National Assembly were threatening to withhold their consent for the Bill, though the UK Government and Parliament will, constitutionally, be able to ignore it. A similar stance is being taken in Scotland.

If the UK Government does attempt to force through possible changes to the devolution settlement or EU law in devolved areas without the consent of the devolved administrations then it’s likely to lead to a serious constitutional crisis.

Welsh Government: “Wales must have EU single market access”

On February 2nd, the First Minister launched the Welsh Government’s paper on trade after Brexit. Although accepting there were trade opportunities outside the EU, the EU remained Wales’ most important export market, with 61% of exports going to EU member states in 2016 – worth £8.9billion.

The First Minister repeated warnings that leaving the single market would “wipe out” the Welsh steel industry and seriously damage farmers livelihoods if a free-trade agreement with New Zealand resulted in increased lamb imports.

A separate report by Cardiff Business School warned that a “Hard Brexit” where the UK reverts to World Trade Organisation (WTO) rules could cause the Welsh economy to contract by up to 10%.

Committee also says Wales “needs single market access”

The Senedd’s External Affairs Committee concluded in a report, following evidence from a wide cross-section of the Welsh public and private sectors, that tariff-free access to the EU single market after Brexit was “essential”.

The report also concluded that Wales should do what it could to continue to participate in some key EU programmes and organisations.

Chair of the Committee, David Rees AM (Lab, Aberavon) said, “Our report isn’t a shopping list of what should be in and out of that future agreement. It represents the concerns that we, and many of our stakeholders, have about the implications for Wales should these issues not be reflected in that post-Brexit relationship with the EU.

“We expect UK Ministers to take into account the implications for each constituent member of the UK when negotiating on the post-Brexit relationship, including the matters raised in this report, to ensure that we achieve a Brexit that works for all.”

First Welsh Government Brexit impact study published

The first major sectoral study into the possible impacts of Brexit – on agriculture and fisheries – was published by a panel chaired by Secretary for Energy, Planning & Rural Affairs, Lesley Griffiths (Lab, Wrexham) on February 19th (pdf).

The key findings include:

  • Food prices are expected to rise to some degree across all Brexit scenarios.
  • The Welsh fishing industry “will collapse” under WTO rules/Hard Brexit, but will continue as normal if trade status with the EU remained the same.
  • Sheep farmers are set to struggle as they rely on exports to balance production; dairy and poultry farmers are “more robust” because they’re more focused on the UK market.
  • There’s potential for Wales to develop eco-tourism further.
  • Additional government funding is unlikely to prevent change impacting the sectors, but without some form of interim government support some sectors “may collapse quickly”.
  • Farming and fishing will need to improve productivity and look to alternative income streams to remain viable – this will require improved business skills.

Little progress on Irish border issues

The UK Parliament’s Northern Irish Affairs Select Committee said it was concerned at a lack of progress on border issues with the Republic of Ireland, fearing that time was running out to prevent the imposition of a “hard border” with full customs controls.

They also concluded that there was no way to avoid some border infrastructure being introduced between the two countries and repeated opposition to creating any sort of border between Northern Ireland and mainland Great Britain.

Leading Brexiteer, Jacob Rees-Mogg MP claimed that suggestions the Irish border question could lead to a return of violence in Northern Ireland were “almost encouraging it” and raised the idea of the Republic of Ireland leaving the EU in order to apply British regulations.

On April 20th, UK media outlets reported that the UK’s proposals for the Irish border had been “annihilated“, with the EU insisting that customs union and single market require external border checks to maintain their integrity (implying the UK will have to remain in one or both to avoid a hard border).

Terms agreed on UK-EU Transition Deal

On March 19th, UK Brexit Minister, David Davis MP and the EU’s chief negotiator, Michel Barnier, announced that a draft deal on the transition period after Brexit day on 29th March 2019 (pdf).

The transitional period will last until December 2020, but there were still details to be worked out on the Irish border. The UK will also be allowed to negotiate and sign its own trade deals during the transition period.

The UK will pay a “divorce bill” of around £40billion until 2064 and will make a financial contribution to take part in some EU agencies.

Senedd passes “Continuity Bill”; deal later reached to repeal it

On March 21st, the National Assembly passed a Bill designed to enshrine EU laws in devolved areas in Welsh law after Brexit, protecting Wales from a “power-grab” by the UK Government.

On March 9th, the UK Government revealed a list of policy areas they would seek to retain control of – temporarily or permanently – after Brexit (pdf). This included powers over agriculture, fisheries, food safety & environmental health, pollution, access to healthcare by EU card holders, recognition of professional qualifications and carbon emissions.

On April 25th, the Welsh Government and UK Government announced a deal had been agreed on which would see the disputed powers held “temporarily” by Westminster for five years after Brexit in order to allow UK-wide frameworks to be developed to replace EU rules. Powers will only be retained with the consent of the devolved parliaments and after the five year period, the powers will be devolved to Scotland and Wales. The Scottish Government rejected the deal.