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Grayling's Brexit Bulletin - 18 January 2019

18th January 2019


 

 

Quote of the week 

"You have always believed in the importance of dialogue in politics. Do you really believe that, as well as declining to meet for talks yourself, it is right to ask your MPs not to seek a solution with the Government?"

Theresa May writing to Jeremy Corbyn after she saw off the no-confidence vote on Wednesday

 

 

The BREXIT Bulletin: EU might decide to cut its losses

 

So provided that the UK’s ‘Plan B’ is to seek a relationship based on the Customs Union, Single Market, Customs Union and Single Market, or full membership of the EU, a route to avoiding a ‘No-deal’ can be envisaged.
 
The issue is that a significant rump of MPs are yet to grasp that the Withdrawal Agreement negotiated by the Government represents the lowest common denominator in which the negotiators fully exploited the boundaries of the possible.
 
Whilst the Government has initiated cross-party talks to set the parameters of ‘Plan B’, it continues to stick to the existing redlines which means that it will not be credible for the EU.
 
As it stands we remain on a course for a ‘No-deal’ scenario for which the EU-27 has now again ramped up contingency activities, with most visibly France this week publicly activating its no-deal strategy.
 
Talk of extending Article 50 is rife in Westminster and Brussels. However, in London little thought is being given to the appetite in Brussels and in EU-27 capitals to do so.
 
Extension as it stands, without a commitment on the part of the UK to a position, would merely extend uncertainty and leave open an issue that is increasingly considered a distraction to the business of EU legislating.
 
Indeed, the EU has prepared itself for life without the UK. It has reallocated seats in the European Parliament, is setting its Multi-annual Financial Framework for the next seven years, and the EU institutions are conducting the public consultations and evaluations to determine the legislative priorities for the 2019-2024 mandate. All without the UK.
 
Any meaningful extension would take Article 50 and the UK’s legal status as a Member State past the European Parliament elections in late May 2019.
 
Without a clear steer from the UK on its intentions it is hard to see the EU agreeing readily to such a complication to its plans for the future of Europe.
 
Whilst no-deal contingency planning has by no account been easy for the European Commission to coordinate, there is a growing sense that a no-deal impact can be mitigated.
 
The upshot is that the EU may just be ready to cut its losses.
 



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This week's content:

The view from Westminster

The view from Germany

 

The view from Westminster

Meetings, Plan Bs, and the future of no-deal
Since successfully opposing the motion of no confidence tabled by Labour Leader Jeremy Corbyn by 325 votes to 306. UK Prime Minister Theresa May immediately offered to hold talks with opposition party leaders. Labour Leader Jeremy Corbyn has so far refused to do so unless May rules out a no-deal.

Most see the talks as a successful tactical ploy. By waiting to make the offer until after winning the confidence vote, she avoided any significant backlash from her own MPs and temporarily put the focus on Corbyn. He is now under increasing pressure to either engage in talks or back a second referendum.
 
Despite this week’s developments, May is not safe from future confidence votes. The margin of her victory shows that she would have lost if it had not been for DUP support. This suggests that if a Brexit deal could be found which commanded majority support in Parliament but not that of the DUP, she would be at the mercy of Labour. If the DUP chose to respond by tabling their own no confidence motion, the question for Labour MPs would be whether to back a deal or help bring down the government.

Taking no-deal off the table?
 
Further details have emerged on the Bill tabled by Conservative MP Nick Boles which the Chancellor suggested to business leaders would take no deal off the table. First, there are numerous reports of Cabinet splits over the Bill, and it is difficult to see how it could pass without at least tacit support. Second, the Bill’s present drafting does not state categorically that no deal will automatically be taken off the table if Parliament cannot reach an agreement. Instead, the drafting suggests that the Bill would merely compel the Government to extend Article 50 in the absence of an agreed Brexit deal. However, the EU has continued to indicate that they will not grant an extension to Article 50 without a clear route forward. Third, Select Committee Chairs in the UK Parliament have reportedly met and agreed to oppose this element of the Bill.
 
These developments continue to show that it is difficult for Parliament itself to stop a no deal outcome. Although there is a clear parliamentary majority against no deal, it is still unclear how MPs will be able to force the Government’s hand to stop the UK automatically leaving the EU on 29 March without a deal. Furthermore, the Prime Minister continues to see no deal as a key lever to help her win over more MPs to a deal or if there are further negotiations with the EU.
 
A consensus is starting to build that if May is to get any deal through, changes will have to be focussed on the non-binding political declaration which sets out the negotiated ambitions for the UK’s future relationship with the EU. May does not seem to think there is scope or time to substantially change the legally binding Withdrawal Agreement, but the Cabinet remains split as to how to proceed.
 
The next significant parliamentary event will take place on Monday when the Government will table a motion setting out their next steps - this will be voted on by MPs on 29 January. However, as things stand, it is still unclear if any plan or amendment will be able to command a majority in the House of Commons.

 



The view from jsk.berlin: our affiliate in Germany

Reactions from the Bundestag
Two days after the Withdrawal Agreement’s defeat in London, Berlin’s parliamentarians debated a national Brexit Transition Act (Brexit-Übergangsgesetz), a bill fully dependent on there being a soft Brexit. Needless to say, the timing could have been better. Still, it gave the speakers an opportunity to air their unadulterated thoughts on Tuesday’s vote and feelings towards the Brexit-friendly Alternative for Germany (AfD), albeit in front of a mostly empty plenary.

A few highlights from the debate (quotes have been translated from the German by jsk.berlin):

“We still don’t know what the British really want. […] An exit from Brexit is pure speculation as the British government has always ruled out this option.” – Heiko Maas, MP and Minister of Foreign Affairs (SPD).

“You can terminate all contracts, including a marriage”, said MP Martin Hebner from the AfD (Alternative for Germany) in his speech. “We are currently going through a very uncomfortable, downright dirty divorce.”

Dr. Diether Dehm from the Left Party (die LINKE) heaped blame for Brexit on the policies of previous UK governments. “London became a mecca for stock market freeloaders and real estate speculators.” Shifting his gaze towards the previous speaker, “As a "Dexit" is promoted during the AfD party convention, I can only advise your voters to take a look at England: only the dumbest calves choose their own slaughterhouse.”

Alexander Graf Lambsdorff (FDP) reminded his colleagues that the bill being debated is written as if the House of Commons had approved the deal on Tuesday. “It is completely obsolete. We are voting on a bill that will never enter into force!” he exclaimed.

An MP from the Greens, Franziska Brantner, had a clear message for London: “I expect Prime Minister May, the head of a Conservative government, to take a hard Brexit off the table. […] The sword of Damocles has to be taken down.“ On a potentially renegotiated agreement: “What is not possible is to take the current agreement and loosen it even further with more rights for the British, fewer duties for the British and fewer rights for European citizens and companies as today.  That will not do.“

Florian Hahn of the Bavarian CSU attacked the strongly Eurosceptic AfD: “Germany has a Brexit Party, the AfD,” and addressed the parliamentary group directly, “why are you running [for the EU Parliament] at all if you want to abolish [it]?”

Lest we lose all hope, there was at least one optimist in the room: Detlef Seif from the CDU. “There isn’t a majority for a hard Brexit – neither in the European Union nor in Great Britain. […] It must be possible to stop an ‘accidental’ hard Brexit. […] Maybe there is another contingency plan that would work just as well as [as the agreement rejected on Tuesday]. The EU has delivered, now the British need to tell us what they want.”

The Brexit Transition Act was adopted with the votes of the CDU/CSU, SPD, the Greens and the FDP and the Left Party.

The jsk.berlin view:
Berlin still wants to prevent a hard Brexit (or if possible, any Brexit) and - even if they don’t dare say it out loud - would be willing to make a lot of concessions to London at this point, but considering the volatile situation in London right now, this can’t yet be the official line. All are being careful not to send the wrong signals.

 



Dates for your diary

21 January 2019 - Theresa May to present "Plan B" to Parliament
29 January 2019 - MPs in Westminster vote on Theresa May's "Plan B"
29 March 2019 - UK expected to leave EU
31 December 2020 - Expected end of transition

 


 

Grayling Brexit Unit

Our Grayling Brexit Unit brings together the very best consultants from across the Grayling network and includes those who have direct experience of working alongside the leading political figures charged with negotiating Brexit in London and Brussels.

The Grayling Brexit Unit is here to support, guide and inform the success of your business and identify how the political dynamics will change as a result of Brexit in both London and Brussels. We are your Brexit experts.

Please contact Robert Francis Tel +32 2739 47 34 (robert.francis@grayling.com) in our Brussels team or Jonathan Curtis (Jonathan.Curtis@grayling.com) in London for more information, and check out our brochure.

 


 

 

 #Brexit Papers 


Brexit Negotiating Documents
The 'Great Repeal Bill'
Brits working in the EU institutions
Article 50

Sir Julian King - The Last UK Commissioner
David Davis – UK Brexit Secretary.
Sir Keir Starmer – Shadow Brexit Secretary.
Sir Tim Barrow – UK Permanent Representative.
Michel Barnier – EU Chief Negotiator.
Sabine Weyand – Barnier’s Deputy.
Guy Verhofstadt – EP Brexit Lead
No-deal – Concrete impact

 

 


Grayling Team

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