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Brexit Bulletin: Never Compromise

Brexit Bulletin: Never Compromise

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Theresa May is telling her team to aim high when it comes to asking the European Union for a good Brexit deal. “Never compromise,” has become the prime minister’s refrain when colleagues suggest being more flexible, Tim Ross reports.

Even though the EU is likely to dismiss Britain’s approach as “cherry-picking,” officials say the prime minister won’t be drawing up fall-back positions or negotiating bottom lines before the trade talks begin.

May wants an agreement with the EU that will allow cross-border trade without tariffs on goods and easy access to the single market for services such as banking and insurance. At the same time, she wants the U.K. to have control over law-making, immigration, and British taxpayers’ money. And she wants to break free from some key EU rules.

Theresa May.

Photographer: WPA Pool/Getty Images

Still in office despite being written off months ago, May is bringing the same determination that has kept her in the top job to the Brexit talks, according to officials.

The Cabinet hasn’t yet reached a final position on what kind of deal it will seek from the EU, but ministers aren’t too far apart in what they want, one senior person in the team said. The Cabinet will need to reach an agreement on its vision for the final agreement by the end of March, at the latest, when discussions about trade are due to start. The U.K. was expected to give the EU an update on the future relationship on Friday.

While unity among ministers in the U.K. is unlikely to break before talks with the EU get going in detail, May’s closest aides believe the trouble will come when the negotiations get tough.

If the EU pushes back hard and refuses to give any ground, May’s team could fracture, potentially setting in train a series of events that finally forces her out.

Brexit Latest

Coming Up | As the latest round of talks draws to a close, chief EU negotiator Michel Barnier will talk to reporters at 11:30 a.m. London time on Friday. Further ahead, Foreign Secretary Boris Johnson is reported to be planning a Brexit speech on Feb. 14, and Theresa May is expected to give one at a security conference in Munich on Feb. 17. 

Ambiguity Works | Don’t hold your breath waiting for the Labour party to change its stance on Brexit. Bill Esterson, a junior spokesman on business and trade for Labour, told Alex Morales: “This early it would be a mistake to say we should definitely do this or definitely do that.” Labour doesn’t want to “sweep any options off the table,” he said.

David Davis.

Photographer: Chris Ratcliffe/Bloomberg

‘Discourteous’ EU | Brexit Secretary David Davis accused the EU of being “discourteous.” He slammed Brussels for releasing a document that threatened to suspend some benefits of single-market access if the U.K. violates any EU laws during the transition. “I do not think it was in good faith to publish a document with frankly discourteous language,” Davis said. “We think it was unwise to publish that.”

Equivalence Won’t Work | Bundesbank Executive Board member Andreas Dombret said that equivalence – whereby the banking regulations of one country are deemed equivalent to those of another – “is not a concept I can apply” to a financial center as large as the U.K. The U.K. is hoping for something better than equivalence, but it’s interesting that the concept is also rejected on the EU side, too. The U.K. industry is lobbying for mutual recognition of regulation, which would offer a more stable basis on which to do business, but Dombret was also skeptical that could work.

On the Markets | The pound jumped after the Bank of England signaled rate hikes are on the way. But Bloomberg’s Marcus Ashworth says the pound is soaring in an “imaginary smooth-Brexit world” and it’s hard to see how the bank could raise rates if negotiations run into delays or collapse. The BOE is now Brexit-dependent more than data-dependent, he argues.

Russian Meddling | Lawmakers who traveled to Washington to grill social media executives on possible Russia interference in the Brexit referendum didn’t come away with many new answers. “I don’t think technology companies should be deciding during elections what is true and what is not true, which is what you’re asking us to do,” said Nick Pickles, Twitter U.K.’s head of public policy. Twitter identified 49 accounts promoted by a pro-Kremlin Russia group active during the Brexit campaign, which posted 942 tweets. Pickles couldn’t say what the full reach of these tweets was.

Ford Plans for Brexit | Ford has requested a banking license from Germany’s financial regulator in preparation for Brexit, Frankfurter Allgemeine Zeitung reports. The company currently manages its financing and leasing activities from a U.K. based entity, which like banks will probably lose the ability to offer services across the bloc after the divorce.

What is the ERG? | BuzzFeed has identified 70 members of parliament it says are part of the informal network of hardline Brexit-backers represented by the European Research Group. That’s more than recent reports have suggested, another reason May needs to listen to the demands of the group that’s now led by Conservative arch-Brexiteer Jacob Rees-Mogg.

And Finally…

And so to the Cambridge University Union Society, where Rees-Mogg drew a packed hall for a debate on the motion “This house believes no deal is better than a bad deal.”

Conservative Jacob Rees-Mogg confronting Andrew Adonis on Brexit at The Cambridge Union.

Photographer: Chris Williamson/Getty Images

Opposing him was Andrew Adonis, a member of the House of Lords, who spent much of the debate drawing attention to Rees-Mogg’s famous fustiness. “Jacob was in many ways extinct many centuries ago,” he said. 

Rees-Mogg, a grassroots favorite, hankered after incandescent light bulbs now banned by the EU and for the freedom to use pesticides banned by the EU on environmental grounds, saying that any Brexit in which Britain doesn’t take back control of its laws, borders and money would be a “betrayal.” He dismissed fears over the future of Britain’s food supply after Brexit.

But ultimately, for all his popularity among Tories, Rees-Mogg failed to win over the students at Cambridge. Speaking alongside Labour Party donor John Mills and businesswoman Helena Morrissey, he lost out to the Adonis team, which included former Education Secretary Nicky Morgan.

But it was close: 40 percent for Rees-Mogg and company; 46 percent for those opposing no deal. 

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https://www.bloomberg.com/news/articles/2018-02-09/brexit-bulletin-never-compromise

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