Brexit News 13th October 2017

Brexit talks

Brexit talks have reached another deadlock, and the UK negotiators appear to be pinning  their hopes on European leaders to find a way out. The problem is no-one in Europe seems that inclined to help.

The EU chief negotiator Michel Barnier said he was convinced that “with political will” progress is “within our grasp” in the next two months. While the British  have taken that as an “elegant cry for help” aimed at European leaders. The Europeans see it as an appeal to the UK  to bring something new to the table.

EU leaders are preparing to meet next week at a summit that was originally thought of as the start to the trade talks for the post Brexit arrangements. However with the divorce still to be decided that is but a dream.  The 27 countries are maintaining a united front. Their position is unchanged: the UK needs to agree the financial settlement before the future relationship can be discussed.

Prime Minister Theresa May is still vulnerable, despite seeming to have seen off challenges at the party conference. She could still be toppled and succeeded by a hardliner brexiter as her remainer tendencies continue to be scrutinized. But a toughening of the UK position would hardly help negotiations.

European governments are more interested in their own positions and cementing the remaining union than letting the UK off the hook in the interests of maintaining some relationship.

When March 2019 rolls by and there is no deal, it’s the UK that will fall off the much-feared cliff. There’s a group of countries that has long been keener on moving on to trade—those most affected by Brexit and with closest trading ties—but even they are maintaining public unity, at least for now.

In a clear change of tone, both sides talked yesterday of contingency plans. There is no agreement yet even on when Barnier might be allowed to discuss a possible transition deal.

Barnier meets EU envoys on Friday, and it is reported that  he will request permission to negotiate that two-year bridging arrangement. Any transition would hinge on the UK agreeing to pay its exit bill—the thorniest part of the talks.

Time is running out. With just 18 months until Britain falls out of the EU, with or without a deal, the chances of a chaotic split are increasing.

Hammond

The pressure is building on  Chancellor Philip Hammond.  Former Chancellor and prominent Brexiteer Nigel Lawson said yesterday that Mr Hammond should be reshuffled for adopting Brexit policies that came “very close to sabotage”.

The Prime Minister is also reported to be getting increasingly frustrated with Mr Hammond. He “can’t help winding up the sceptics,” said one friend of the PM. “Every time he behaves like this, it gets harder in Brussels. He lets his vanity get in the way of doing the job.”

Elsewhere

Meanwhile May’s flagship piece of Brexit legislation risks getting bogged down in Parliament. After some 300 amendments —including some proposed by members of her party—the EU Withdrawal Bill won’t start the parliamentary scrutiny phase next week as expected. The government risks defeat on more than a dozen amendments, the Guardian and Telegraph report.

In another of Brexit’s unintended consequences, London’s lawyers are making more money. With some U.S. firms setting pay in dollars, the plunge in sterling pushed up salaries in the local currency. UK firms then had to follow suit or risk losing talent.

The government is planning to hire 2,000 additional staff to deal specifically with Brexit, according to the  FT. That comes on top of 1,500 appointments already made since last year’s vote.

The British Chambers of Commerce said it’s worried about a hit to sentiment from a Bank of England rate hike at a time of already sluggish economic expansion and Brexit uncertainty.

Opponents of Brexit are threatening to sue the British government if it fails to release internal reports into the impact of Brexit. The Good Law Project, run by tax attorney Jolyon Maugham, has written to DexEU demanding the studies are released within 14 days.

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