Brexit Briefing: Money Talks

1) When Rhetoric Is Put To One Side, The Government Can Come Up With Some Common Sense Brexit Policies

Another week, another spread of Brexit papers from the Government. Last week focused on customs and borders, this week delved into the huge question of the post-Brexit legal arrangements.

Theresa May made it clear in her Lancaster House speech that ending the jurisdiction of the European Court of Justice in the UK was a key part of leaving the EU.

She said: “Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast. And those laws will be interpreted by judges not in Luxembourg but in courts across this country.

“Because we will not have truly left the European Union if we are not in control of our own laws.”

So do the Government plans meet that very firm red line? Yes, and no.

Yes, in the sense that the UK will not be under the direct jurisdiction of the ECJ. When the ECJ makes a ruling, the UK will not be legally obliged to follow it.

But no, if that ruling has an implication for the Brexit deal, there will need to be a forum where that is ruled upon.

Likewise, if the UK passes a law which has an implication for the agreement, the EU might seek arbitration.

The paper flags up joint committees and arbitration models as examples of potential post-Brexit legal bodies – and these would involve non-UK officials and experts ruling on disputes.

And they could be judges from the ECJ.

That committee/panel/group could rule the change is in breach of the agreement, meaning the UK/EU would have to decide whether to reverse the particular policy or ignore the decision – something which could prompt some kind of recompense.

The bottom line is, if you want a trade deal with somebody, you need to someone to police it – and the Government paper recognises that will be foreign officials or even judges

Despite this slight blurring of the red line, Brexiteers were not up in arms crying betrayal. That’s because this is a fairly sensible position to take. What wasn’t sensible was Theresa May’s absolutist rhetoric in the first place.

2) The EU Are All About The Money Still

The Brexit position papers acted as a countdown to the next round of negotiations – due to take place next week.

While David Davis might be hoping his opposite number is keen to discuss the UK’s latest musings, Michel Barnier is determined to keep the talks focused on cold, hard cash.

Politico reported this week that Brussels want the UK to at least come up with a formula to calculate how much they would pay in the divorce, even if they can’t agree a definitive figure as of yet.

The UK is reluctant to do this, believing it is difficult to know what to put into the formula when the Brexit deal has yet to be discussed. What if the UK pays money for an agency in the divorce bill, but as part of the Brexit agreement agrees to stay in and fund that body?

It’s a slightly off position from the UK because, as David Davis likes to remind people, the EU works on the basis that nothing is agreed until everything is agreed.

Therefore, even if a formula is designed early on in the talks, there could be scope for altering it once the Brexit deal becomes clearer.

3) Everybody Is Taking Back Control Of Their Money

Brexit was of course about taking back control of our money, and it seems the Europeans are adopting that mantra too.

The Times revealed this week the European Investment Bank is holding back on granting loans to the British Government. Last year, the bank stumped up the cash for £6.9billion of public infrastructure projects in the UK, but since Article 50 was triggered in March, only three loans have been given the green light.

According to The Times: “The moratorium has been confirmed by sources within the bank and public sector institutions in the UK that had previously been beneficiaries of its loans, but it has not been formally announced.”

Sectors set to suffer a funding squeeze include energy, housing and universities.

The UK has a 16% share in the EIB, and analysis of the bank’s 2015 figures shows Britain could get a cheque for around €10billion if it pulls out.

Brexiteers will no doubt say the fact the EIB is refusing to lend our own money to us is a perfect illustration of why we need to take back control of our cash.

I wonder what we could spend it on? Let’s take a completely hypothetical example…giving the NHS £350million a week. We could do that for just over six months. But what a six months it would be.

4) The Immigration Figures Might Have Always Been Wrong

The latest immigration figures make for good/bad reading, depending on the prism you’re viewing it through.

The ONS revealed that in the year to the end of March 2017, net migration fell by fell 81,000 to 246,000.

That puts the number at its lowest level for three years.

The drop was fueled by fewer EU citizens coming to the UK to look for work, down 39,000.

The statistics also revealed a sharp rise EU migrants leaving the UK, with 17,000 from the EU8 countries of Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia quitting Britain.

The Government welcomed the fall, businesses voiced concerns.

But the real revelation was that previous estimates of the number of foreign students staying in the UK after their visa expired were way off. Way, way off.

Exit checks showed that just 4,600 students stayed in the UK once it was time for them to leave. The previous assumption was 100,000 had remained. That’s a difference of 95,400. In a debate so focused on numbers, this is a startling admission.

There has long been pressure on Theresa May to take the student numbers out of the migration figures, with Boris Johnson and Philip Hammond believed to be the most vociferous advocates of the move.

The Home Office has announced a review of the impact of foreign students on UK jobs – a move which could lay the groundwork for taking them out of the migration statistic all together.

What does this mean for Brexit? If the Government wants to balance the seemingly impossible position of getting net migration down to 100,000 and yet also ensuring sectors such as construction, agriculture and hospitality still have a large enough workforce to recruit from, this could be a little hack to make that possible.