Road to Brexit #5: July 2018

(Title Image: Cambridge University)

UK Cabinet agrees on new UK-EU relationship….then falls apart

After months of wrangling over what relationship the UK will have with the EU after Brexit, the Prime Minister announced the UK Cabinet had agreed on a final set of proposals at Chequers on 7th July.

The Future Framework Plan proposes (pdf):

  • The creation of a UK-EU free trade area, with a “common rule book” on the trade of goods, state aid but not services; the UK Parliament will decide how these rules are incorporated into UK law.
  • A shared customs arrangement, where the UK will closely align to EU rules.
  • An end to freedom of movement, but arrangements will be put in place to allow reciprocal visa-free movement of temporary labour, tourists and students.
  • The UK will set controls for tariffs and trade policy.
  • The jurisdiction of the European Court of Justice will end, but the UK will accept its decisions on areas where common rules are in force.
  • Continued UK participation in Europol (as well as other EU agencies) and coordination of UK and EU transport, energy, foreign affairs and defence policies.
  • Annual negotiations on fishing access and sharing of fish stocks.
  • Continuation of the European Health Insurance Card scheme (where holders will be entitled to free medical treatment in another country).

The CBI welcomed the proposals, which it said would provide a “confidence boost” to business, though hardline Brexit supporters said it could prove worse than a “No deal”.

The then Brexit Secretary, David Davis MP, resigned in protest. The then Foreign Secretary, Boris Johnson MP, followed a few hours later. They were replaced by Dominic Raab and Jeremy Hunt respectively.

UK Cabinet agrees Brexit customs “backstop” plan

The UK Government has agreed to align the UK’s customs rules with the EU until 2021.

The plan will temporarily prevent a “hard border” between the Republic of Ireland and Northern Ireland and would mean no border checks would be needed until a more permanent solution is found.

The EU is expected to apply a number of “tests” to ensure the proposal can work.

Senedd backs Brexit Bill

On May 15th 2018, AMs voted by 46-9 in favour of granting their consent to the EU Withdrawl Bill (aka. “Brexit Bill”) via a Legislative Consent Motion.

Labour, UKIP and the Conservatives all spoke in support of the Bill following an agreement on the use and retention of EU powers in devolved areas after Brexit. Kirsty Williams (Lib Dem) and Dafydd Elis-Thomas (Independent) also voted in favour. The deal means powers in multiple policy areas will be temporarily retained by the UK Government while pan-UK frameworks are developed.

Plaid Cymru opposed the deal and the Bill, saying that it amounted to a “power grab” and was an attack on the sovereignty of the National Assembly. The Scottish Parliament rejected an identical consent motion by 90 votes to 30 with Labour and the Lib Dems voting against it along with the SNP.

The Brexit Bill was passed by the UK Parliament on June 20th 2018.

Post-Brexit customs system “to cost businesses £20billion a year”

The Chief Executive of HMRC told a committee of MPs that the customs system preferred by leading Brexit supporters – a technology-based system of declarations and inspections – would cost a business £32.50 for each declaration, working out as £17-20billion a year across the whole private sector.

The figures were derided as “speculation”, though £20billion would be more than the UK’s current annual contribution to the EU of £13billion.

Presently, businesses don’t have to make any customs declarations to trade with the EU. A customs partnership – which is the favoured solution of the UK Government – would cost £3.7billion a year, with the UK collecting tariffs set by the EU customs union for goods entering the UK with companies claiming back any difference from UK tariffs.

Politicians sign letter demanding “People’s Vote”

30 Welsh politicians co-signed a letter demanding that a final referendum should be held regarding the final Brexit deal, saying the decision was “too big” for the UK Parliament alone to decide.

Among the signatories included Public Services Secretary, Alun Davies (Lab, Blaenau Gwent), Education Secretary, Kirsty Williams (Lib Dem, Brecon & Radnor), Plaid Cymru leader, Leanne Wood AM (Plaid, Rhondda) as well as 6 other AMs, 12 MPs and 8 council leaders.

The First Minister is opposed to a second referendum and said his position was to secure the best deal for Wales whilst respecting the 2016 vote.

Brexit “Doomsday Report” details revealed

A report prepared during May 2018 for David Davis MP predicted the Port of Dover “collapsing on day one”, shortages of food in supermarkets, petrol shortages and shortages of medicines in hospitals within a fortnight of Brexit in March 2019 if no deal is agreed.

It was even suggested the RAF could be ordered to fly essential supplies to remote parts of the UK.

A source told The Sunday Times the reports were so secretive they were “locked in a safe”. The UK Government confirmed that discussions had taken place but the doomsday report was “completely false”. In July, it was revealed that the military could be called upon to ensure essential supplies are delivered and supermarkets were warned to stockpile provisions.

First Minister “supports an end to freedom of movement”

Following a speech in London, the First Minister said the Labour party should ignore voices from within calling for freedom of movement to be maintained after Brexit – although he expresses some support for freedom of movement for workers. He said, “In my mind, we have to recognise that people are unhappy with the freedom of movement, and we need to come up with an alternative.”

He also called on the UK Prime Minister to “put the UK before her party” and support a “sensible Brexit”, warning that a “no deal scenario” would be a catastrophe.

“Three Questions” for EU citizens to stay in the UK after Brexit

EU citizens who wish to remain in the UK after Brexit on the same terms as they currently do will only have to satisfy three questions on their ID, criminal convictions and residency. New applications will cost £65 for adults and £35.50 for children, though it will be free for anyone who has already applied for residency or indefinite leave to remain.

The scheme will cost £170million and will be open to all 3.5million citizens of EU and EEA member states who live in the UK. Two types of status will be granted, settled (for those who’ve lived in the UK for 5 years) and pre-settled (for those who’ve lived for less than 5 years).

The scheme is expected to be fully operational by autumn 2018 and will run until June 2021.

Airbus “could leave the UK” in a no-deal Brexit

The pan-European aerospace conglomerate, Airbus, announced on June 22nd that they could withdraw from the UK if there’s a failure to agree on a trade deal with the EU before the post-Brexit transition period ends in December 2020.

Airbus currently employs 6,000 at its wing-making plant in Flintshire and has other sites around the UK, including Newport (employing 900 people) and Filton in Bristol.

The Welsh Government described the announcement as “extremely worrying” and repeated calls for the UK to retain access to the single market and remain in the customs union to provide frictionless trade.

The UK Government said progress had been made in negotiations with the EU to develop “as frictionless trade as possible”.

Post-Brexit “shake up” of farming subsidies proposed

On July 10th, the Energy, Planning & Rural Affairs Secretary, Lesley Griffiths (Lab, Wrexham), unveiled draft proposals for reform of agricultural support after Brexit. The key proposals are the creation of two funds – one to support rural economic development and the other on land management and conservation.

The proposed funds will replace existing EU farming subsidies and domestic programmes like Glastir and the Rural Development Programme. The funds would also be open to everyone who manages land in Wales, not just those eligible under the Common Agricultural Policy (CAP) – including community farms/gardens. The new programme would be phased in between 2020-2025.

The Secretary said, “Exiting the EU means we have to do things differently and now is the time to prepare. We need to change how we support our farmers and agriculture sector to make them sustainable and able to thrive in a new trading environment. We have the chance to design a ‘Made in Wales’ system that works for Welsh farmers and our communities.”