Brexit briefing: weekly news roundup

Unite Brexit Check’s weekly news briefing on the UK’s exit from the EU.

Check back every Friday for an overview of the week’s Brexit-related political, industrial and economic developments.

Brexit negotiations

Theresa May was due to tell European Council president Donald Tusk today (24 November) that she is prepared to give ground on the Brexit divorce bill, as Brussels demands a written guarantee of more money to unlock trade talks.

On Thursday European Commission president Jean-Claude Juncker said that it would be seen in the next few days whether Brexit talks with Britain had made enough progress to enter a second phase of negotiations.

“We are in intense negotiation with the UK to end the first phase of the talks about topics such as citizen rights, the ‘Ireland problem’, the bill that will have to be paid,” Juncker told a news conference during an official visit to Switzerland (Reuters).

But Tusk was expected to make it clear to the prime minister that Britain must give a “no strings attached” promise of paying substantially more than the current £20 billion on offer. Mrs May, who this week won the backing of senior cabinet ministers to make an offer of up to €40 billion, has not ruled out giving the EU a written breakdown of what Britain considers its financial obligations to be, but will insist on a written guarantee of trade talks in return (Telegraph).

Even if “sufficient progress” is achieved on the size of the bill, Britain faces a fight for the kind of trade deal it really needs. At a private meeting of EU27 ambassadors on Wednesday there was said to be widespread support for Michel Barnier’s stance that Britain should be offered little more than a Canada-style deal with few concessions for services (POLITICO PRO (subscription)).

Meanwhile Barnier is also said to want to abolish Britain’s treasured EU budget rebate as part of any Brexit transition deal. If he succeeds, it could mean Britain having to pay an extra €10 billion to avoid a Brexit cliff edge (POLITICO).

And India’s high commissioner to the UK has warned that Britain will have to accept greater levels of immigration from the country if it wants to strike a free trade deal with it after Brexit. YK Sinha said that although it could be a “winning partnership”, a trade deal cannot be a “one way street”.

He also warned an agreement may not be in place until 2030 as he admitted the two countries are yet to begin talks about a post-Brexit pact (Politics Home).

Economy:

The Office for Budget Responsibility (OBR) says the government refused to give it additional information on Brexit relevant to its economic forecasts ahead of the autumn Budget, instead referring the independent agency to publicly available speeches and white papers.

The OBR says it has no meaningful basis to form outlooks for the UK economy.

In its fiscal and economic outlook, published in tandem with the Budget, the OBR said it asked the government for additional information to inform the forecasts it is required to produce on the basis of current policy.

However, it was referred to Prime Minister Theresa May’s Florence speech from September and a white paper on trade policy published in February (Fund Strategy).

The OBR did however assume that Brexit will slow import and export growth due to new frictions in trade between the UK and EU, and that the UK will adopt tighter immigration controls while still failing to meet the government’s “tens of thousands” target for net migration (FT).

Both the Resolution Foundation and the Institute for Fiscal Studies warned, in their budget analyses, that workers could go nearly two decades without a real pay rise due to the country’s economic decline, exacerbated by Brexit (CNN).

The hopes of Dundee and several other UK cities of being crowned European City of Culture in 2023, the status of which can bring in millions of pounds of tourism revenue, have been dashed due to Brexit. The European Commission has pulled the plug on the UK’s right to host the title – despite the Westminster government launching its official competition late last year.

Dundee was competing against Nottingham, Leeds, Milton Keynes and Belfast/Derry for the honour, which would have seen a £40 million programme of events staged in the city (Scotsman).

Politics:

The Brexit withdrawal bill continues in committee stage in the House of Commons on 4 December, with a further four days on the 6th, 12th and 13th and the conclusion of its committee stage on 20 December (Parliament).

It has been reported that the environment secretary Michael Gove has convinced Theresa May to back a clean break from Brussels’ rules and regulations after Britain leaves the EU. The cabinet row over whether Britain should stay closely aligned to the EU single market has been rumbling for weeks with Remainers demanding as close a partnership as possible to maximise trade. If May has decided not to pursue harmonisation, the long-term implications will be profound.

Profound implications too for Gibraltar, which is heading for an abrupt exit from the single market without the benefit of any transition deal, according to senior Spanish government sources, who revealed that the British government had failed to offer any proposals on the future of the Rock (Guardian).

Meanwhile the near contempt felt by European leaders at the British government’s management of the Brexit negotiations, and their concerns over the “unimpressive” and “surprising” behaviour of Boris Johnson and David Davis, have been revealed by a confidential report drawn up by the Irish government (Guardian).

The political turmoil in Berlin will not “have any major impact on Brexit”. The collapse of talks on forming a coalition government led some Brexit-supporting Conservative MPs to push Theresa May to “take advantage” of the situation and Merkel’s weakness to suspend plans to increase the UK’s divorce bill offer. But experts say British politicians have vastly overestimated the significance of Brexit in German politics (Business Insider).

In depth

The Brexit veto: how and why Ireland raised the stakes – a 3,500 missive on Ireland and Brexit by Tony Connelly, Europe editor of Irish state broadcaster RTE. He says Dublin’s decision to threaten a veto was “carefully choreographed” with Michel Barnier to flush out Britain’s position (RTE).