Brexit Briefing: Business Leaders Urge UK To Stay In The Single Market During The Transition Period

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1) Business Leaders Are Pushing For A Hotel California Brexit.

Before the election, the talk around Brexit focused on Theresa May’s “deal or no deal” stance.

Now, the conversation is very much on what transitional arrangement the UK will strike after March 2019.

A source in the Brexit Department told me this week that while they are contingency planning for “no deal”, they are working very hard towards getting an agreement.

This evening, the Director-General and Chief Economist of business group the CBI will use a lecture at the London School of Economics to warn that uncertainty over what happens after the two-year Article 50 period is up is already having an impact on the economy.

Their solution? The UK should stay inside the Single Market and a customs union until a final deal is in force.

CBI Director-General, Carolyn Fairbairn will say: “Making two transitions – from where firms are now to a staging post and then again to a final deal – would be wasteful, difficult and uncertain in itself.

“One transition is better than two and certainty is better than uncertainty.”

She will add: “The prospect of multiple cliff edges – in tariffs, red tape and regulation - is already casting a long shadow over business decisions. The result is a ‘drip drip’ of investment decisions deferred or lost.

“A major European engineering and electronics firm has told us it has shelved plans to build a UK innovation centre.

“A UK infrastructure provider is already having problems retaining and recruiting skilled workers from the EU needed to build the rails, roads and houses already planned.”

TUC General Secretary Frances O’Grady agreed with CBI, and in a statement said: “We need a transitional arrangement that will keep jobs and rights at work safe until a final deal is in place that will protect them for the long term. The common sense approach is to keep as much continuity as possible.”

It is worth remembering, of course, that both the CBI and the TUC campaigned for Remain during the referendum, so in many ways their position is unsurprising.

But it is perhaps a sign of the change in tone around the Brexit debate that the CBI feels it is able to be so unequivocal in its demand.

Labour’s Shadow Brexit Secretary Keir Starmer did however leave some wiggle room in his comments about the speech.

He said: “Labour agree that we need an early commitment to ensure strong transitional arrangements, and that these should be on similar terms to those we currently enjoy.”

“Similar terms” is slightly different to what the CBI are calling for. Labour’s two-faced approach on Brexit continues.

2) Michael Gove Is Taking Back Control Of UK Fishing Waters, But He’s Totally Prepared To Give It Away Again.

For those who were lucky enough to be there, the flotilla on the Thames in last year’s referendum campaign will probably forever remain the most surreal experience of our professional lives.

Yet shockingly enough, it didn’t take place just so Sir Bob Geldof could swear at Nigel Farage through a loudspeaker, it was about something serious: UK fishing rights.

Defra Secretary Michael Gove this week triggered the UK’s withdrawal from the London Fisheries Convention, signed in 1964 - long before Britain joined the European Economic Community.

The convention allows countries including the UK, France, Ireland, Germany and the Netherlands to fish within six and 12 nautical miles of each other’s coastlines.

It is not technically part of the EU’s treaties, and the Common Fisheries Policy [CFP] - which sets quotas for which states are allowed to catch different types of fish - in many ways supersedes it.

Gove confirmed the UK would be exiting the CFP as well (an obvious consequence of Brexit) but was more koi (I had to get one fish pun in) about whether EU vessels would be completely banned from fishing in Britain’s waters after March 2019, or whether some access might be granted as part of the new trading arrangement.

If that is the case, expect Ukip to start picking up votes again in Britain’s seaside towns. 

3) There Is Absolutely No Way The Man On The Left Represents David Davis’ View, OK?

It wasn’t quite on par with Tottenham captain Sol Campbell joining arch-rivals Arsenal, but James Chapman’s move from being spin doctor for George Osborne to David Davis’s chief of staff last summer certainly raised some eyebrows.

After all, Osborne had been one of the most vociferous Remain campaigners in Government, even sharing a platform with his former bete noire Ed Balls to hammer home the Stronger In message.

Would Chapman carry some of his old boss’s instincts into his new role, and work to hamstring the Brexit Secretary?

Well, according to Chapman himself, it is actually Theresa May who has made Davis’ job a lot harder. Speaking to Radio 4 - having now left Government and taken up a job at a PR firm in the City - Chapman was unequivocal in his criticism of the Prime Minister.

“She’s taken some absolutist positions on particular issues – I’m thinking of the European court of justice,” the former Daily Mail Political Editor told the BBC’s Week in Westminster. “She’s set a red line effectively for a conference speech that hamstrung these negotiations in my view.” 

Ouch.

The line in question came from her speech to the Conservative conference in Birmingham last year, when May said: “We are not leaving the European Union only to give up control of immigration all over again. And we are not leaving only to return to the jurisdiction of the European court of justice. That’s not going to happen.”

That absolutist position has already caused problems when it comes to who monitors the rights of EU citizens in the UK, with Brussels still wanting ECJ involvement.

Chapman didn’t stop there though:

“Now the government has announced its intention to withdraw from the Euratom treaty as we leave the EU and the reason for that appears to be there’s a locus for the ECJ in that treaty which covers the free movement of nuclear scientists.

“Now I would have thought the UK would like to continue welcoming nuclear scientists who are all probably being paid six figures and are paying lots of tax. But we’re withdrawing from it because of this absolutist position on the European court. I think she could show some flexibility in that area.

When asked if other Cabinet Ministers would be cheering if May had a change of heart, he said: “I think they would be and I think if she doesn’t shift on Euratom I think the parliament will shift it for her.”

4) Greg ‘Scarface’ Clark And Jeremy ‘Walter White’ Hunt Have Laid Down The Drug Laws To The EU.

While Cabinet Ministers might be waiting for a change of heart on the ECJ, some are being much proactive on other aspects of Brexit. This week, Business Secretary Greg Clark and Health Secretary Jeremy Hunt penning a joint letter on medicine regulation after the UK leaves the EU.

Currently, the European Medicines Agency authorises drugs across the EU, but with it set to leave its London base post-Brexit, questions have been growing about whether its jurisdiction in the UK will expire when the lease on its headquarters does.

The letter from Clark and Hunt (trying saying those names ten times in a row very quickly) makes it clear the future relationship will be based more on equivalence than integration.

“The UK’s desired outcome is to find a way to continue to collaborate with the European regulatory framework, in the interests of public health and safety,” the pair write.

The key paragraph is the final one, where the pair say: “We are clear that should we not achieve our desired relationship with the EU, we will set up a regulatory system that protects the best interests of patients and supports the UK life science industry to go from strength to strength. We will seek to process licenses as quickly as possible, certainly no more slowly than at present. Our fee pricing will be competitive with current levels. However, our door will always be open to a deep and special relationship with the EU which remains the best way to promote improved patient outcomes both in Europe and globally.

In other words, we will go our own way.

5) Liam Fox Needs To Show His Homework To Philip Hammond.

The strain of media-bashing which infected Andrea Leadsom a few weeks ago seems to have reached Liam Fox. In the Commons on Thursday morning he claimed “some elements of our media would rather see Britain fail than Brexit succeed” after being asked about the perceived negative coverage of potential trade deals.

But it is not just the media who are looking for some more details on the land of milk and honey the International Trade Secretary is steering us towards.

The Financial Times reported the Treasury has drawn up a paper ready to send to the Department of International Trade [DIT], challenging them to prove the deals they can strike across the world make up for the loss of business from exiting the EU customs union.

DIT sources told The Sun no such request had been received - but it certainly fits in with the narrative that Philip Hammond wants the UK to stay in the customs union as long as possible as part of a transition arrangement after Brexit.

While Fox is under pressure to line up free trade deals, the EU today announced it had conclude one with Japan.

It is only an outline deal at present, but developing trade with the world’s third biggest economy is a coup for Brussels.

There are many details to be ironed out, but the key benefits seem to be more Japanese cars on European roads, and more European agricultural products in the Far East.

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Rabbil Sikdar blogs on how Trump and Brexit “allowed racism to become an accepted part of political discourse”