(DML) Our Brexit deal for Britain seizes the moment to deliver the democratic decision of the British people and secure a bright new future for our country outside the European Union.
It restores our national sovereignty, so that it is our Government that decides who comes into our country, our Parliaments that make our laws and our courts that enforce them.
It puts an end to the vast membership subscriptions we pay to Brussels, delivering a Brexit dividend to support domestic priorities like our long-term plan for the NHS.
It grasps the opportunities of an independent trade policy, freeing us to forge new trade deals with allies across the world – including America, where President Trumphas made it clear he wants a trade deal and is now confident we will be able to do it.
And it enables us to build the new economic and security partnerships we want to see with the European Union. Because Brexit isn’t about trading with other countries instead of trading with Europe, it is about doing both.
Theresa May said: ‘This is the scale of the opportunity before us and my message to the country this weekend is simple: we need to keep our eyes on the prize. If we don’t, we risk ending up with no Brexit at all’
This is the scale of the opportunity before us and my message to the country this weekend is simple: we need to keep our eyes on the prize.
If we don’t, we risk ending up with no Brexit at all.
This is a time to be practical and pragmatic – backing our plan to get Britain out of the European Union on March 29 next year and delivering for the British people.
I know there are some who have concerns about the ‘common rule book’ for goods and the customs arrangements which we have proposed will underpin the new UK-EU free trade area.
I understand those concerns. But the legacy of Brexit cannot be a hard border between Northern Ireland and Ireland that unpicks the historic Belfast Agreement. It cannot be the breaking up of our precious United Kingdom with a border down the Irish Sea. And it cannot be the destruction of integrated supply chains and just-in-time processes on which jobs and livelihoods depend.
This means we have to have friction-free movement of goods, avoiding the need for customs and regulatory checks between the UK and the EU.
And this cannot happen if products have to go through different tests for different markets, or if customs declarations have to be made at the UK/EU border.
I am yet to see a workable alternative future trading arrangement that would deliver on our commitments to Northern Ireland, preserve the constitutional integrity of the UK and deliver on the result of the referendum.
But our Brexit deal for Britain achieves exactly this – and it can work. For the common rule book only covers industrial goods and agricultural products and only those rules which are necessary to ensure free flow at the border. The regulations that are covered are largely stable and supported by a large share of our manufacturing businesses. And there will always be a parliamentary lock to ensure that our Parliament has the sovereign ability to reject any new law or regulation, while recognising there would be proportionate implications for the operation of the future relationship, were they to do so.
So I believe we need to come together behind our plan.
As the Trade Bill returns to the Commons this week, there are some planning to vote for amendments that would tie us to a permanent customs union with the EU.
This would be the ultimate betrayal of the Brexit vote. It would remove our ability to have an independent trade policy at all, conceding Britain’s role on the global stage as a force for free trade and endangering people’s jobs and livelihoods. This Government will never stand for that.
There are others who are planning to try and bring down a Bill that is essential in enabling us to prepare for life outside the European Union. This would put at risk our ability to make the necessary preparations for a no deal.
And this could lead to a damaging and disorderly Brexit because without this Bill passing we would not be able to retain the benefits of more than 40 existing trade arrangements; and neither will we have the means to protect consumers, industries and workers from being undercut by unfairly traded goods in a post-Brexit Britain.
She added: ‘The legacy of Brexit cannot be a hard border between Northern Ireland and Ireland that unpicks the historic Belfast Agreement. It cannot be the breaking up of our precious United Kingdom with a border down the Irish Sea’
As I have said many times, we can get a good deal and that is what is best for Britain. But we should also prepare for no deal. Not to do so would be grossly irresponsible. So I urge Parliamentarians on all sides to consider this when they are voting.
Finally, some people have asked whether our Brexit deal is just a starting point from which we will regress. So let me be clear. Our Brexit deal is not some long wish-list from which negotiators get to pick and choose. It is a complete plan with a set of outcomes that are non-negotiable.
People voted to end free movement. So free movement will end. People voted to end the jurisdiction of the European Court of Justice in our country; and we are going to deliver that too.
We will leave the Single Market and customs union, and get out of the Common Agricultural Policy and the Common Fisheries Policy. We will have that independent trade policy and a new UK-EU free trade area with a common rulebook for industrial goods and agricultural products.
We will maintain high standards in keeping with our values, so we continue to promote open and fair trade. We will have that parliamentary lock on all new rules and regulations. We will not tolerate a hard border between Northern Ireland and Ireland or between Great Britain and Northern Ireland.
And we will maintain close co-operation with the EU on security to keep our people safe while ensuring we have our own independent foreign and trade policy. None of these things is up for debate.
So the negotiations with the European Union are not going to be easy for Brussels – and I don’t intend them to be. As President Trump has said, I’m a tough negotiator. And just as I made clear to him on Friday – I say to the British people today: I am not going to Brussels to compromise our national interest; I am going to fight for it. I am going to fight for our Brexit deal – because it is the right deal for Britain.
Told of his pride at taking wife Melania to meet the Queen
Mr Trump’s remarks come as he prepares to meet the PM for a working lunch at Chequers.
He will then board a helicopter for Windsor Castle to meet the Queen before flying up to Scotland for a private two-day visit.
Thousands of people are expected to take part in a series of protests during his stay in the UK.
I told May how to do Brexit but she didn’t listen to me
THERESA May’s new soft Brexit blueprint would “kill” any future trade deal with the United States, Donald Trump warns today.
Mounting an extraordinary attack on the PM’s exit negotiation, the President also reveals she has ignored his advice on how to toughen up the troubled talks.
Instead he believes Mrs May has gone “the opposite way”, and he thinks the results have been “very unfortunate”.
His fiercest criticism came over the centrepiece of the PM’s new Brexit plan — which was unveiled in full yesterday.
It would stick to a common rulebook with Brussels on goods and agricultural produce in a bid to keep customs borders open with the EU.
But Mr Trump told The Sun: “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.
US President Donald Trump talks candidly to The Sun about the British Prime Minister Theresa May and Brexit
“If they do that, then their trade deal with the US will probably not be made.”
Mr Trump made the bombshell intervention during a world exclusive interview with The Sun — the only British media outlet he spoke to before his arrival in the UK for his first visit as President.
US President Donald Trump talks candidly to The Sun about UK / US deals
It will pour nitroglycerine on the already raging Tory Brexiteer revolt against the PM.
And in more remarks that will set off alarm bells in No10, Mr Trump also said Mrs May’s nemesis Boris Johnson — who resigned over the soft Brexit blueprint on Monday — would “make a great Prime Minister”.
A big US-UK trade deal, long promised by Mr Trump, is cherished by Leave campaigners as Brexit’s biggest prize.
But the President said Mrs May’s plan “will definitely affect trade with the United States, unfortunately in a negative way”.
He explained: “We have enough difficulty with the European Union.
“We are cracking down right now on the European Union because they have not treated the United States fairly on trading.
“No, if they do that I would say that that would probably end a major trade relationship with the United States.”
President Donald Trump and Melania Trump depart for dinner with PM Theresa May at Blenheim Palace
Questioned on Boris’s comments at a private dinner two weeks ago that Mr Trump “would go in bloody hard” if he was negotiating Brexit, the President swiftly replied: “He is right.”
He added: “I would have done it much differently. I actually told Theresa May how to do it but she didn’t agree, she didn’t listen to me.
“She wanted to go a different route.
“I would actually say that she probably went the opposite way. And that is fine.
“She should negotiate the best way she knows how. But it is too bad what is going on.”
US President Donald Trump talks candidly to The Sun about Trade
Asked if that meant he would be prepared to walk away from the negotiating table, Trump replied: “Oh, absolutely. I think what is going on is very unfortunate. Too long.
“You know, deals that take too long are never good ones. When a deal takes so long, they never work out very well.”
Mr Trump also went even further in questioning whether Mrs May’s new Brexit plan upholds the referendum result — which he claimed he predicted two years ago. He said: “The deal she is striking is a much different deal than the one the people voted on.
“It was not the deal that was in the referendum. I have just been hearing this over the last three days. I know they have had a lot of resignations. So a lot of people don’t like it.”
President Donald Trump and Melania Trump arrive at Blenheim Palace for dinner with Prime Minister Theresa May
Despite the withering criticism of Mrs May’s Brexit strategy, Trump insisted he still thinks she is “a very good person”.
He also denied claims that she bores him.
Asked about a report in The Washington Post that he thinks of Mrs May as “a bossy schoolteacher”, Mr Trump said: “No, no, no, no. I never said anything bad about her.
“That is fake news. I think she is a nice person. I get along with her very nicely. The Washington Post is totally fake. They are just a lobbyist for Amazon.”
Recalling a visit to one of his luxury golf resorts in Scotland two years ago, Mr Trump said: “I predicted Brexit.
“I was cutting a ribbon for the opening of Turnberry — you know they totally did a whole renovation, it is beautiful — the day before the Brexit vote.
“I said, ‘Brexit will happen’. The vote is going to go positive, because people don’t want to be faced with the horrible immigration problems that they are being faced with in other countries.
“You remember that Barack Obama said that there is no way it is going to happen, and the UK will get to the back of the line if it ever does, right? I said Brexit will happen, and I was right.”
At a press conference in Brussels yesterday at the end of a summit of Nato leaders, Mr Trump again cast doubt on whether the PM’s soft Brexit plan was true to the referendum result.
He said: “I don’t know if that’s what they voted for.”
Downing Street was left shell-shocked by the criticism.
Mrs May rushed out her own statement to hit back at the President’s claim.
The PM insisted: “We have come to an agreement at the proposal we’re putting to the European Union which absolutely delivers on the Brexit people voted for.
They voted for us to take back control of our money, our law and our borders and that’s exactly what we will do.”
Johnson tipped as future PM
US President Donald Trump talks candidly to The Sun about Boris Johnson
The US President described the former Foreign Secretary as “a very talented guy”, adding: “I like him a lot.”
He said: “I have a lot of respect for Boris. He obviously likes me, and says very good things about me.
“I was very saddened to see he was leaving government and I hope he goes back in at some point. I think he is a great representative for your country.”
Asked if the ex-minister could be in No 10 one day, he replied: “Well I am not pitting one against the other. I am just saying I think he would be a great Prime Minister. I think he’s got what it takes.”
Novichok attack will not stop Trump meeting Putin
BRITAIN’S fury over the Salisbury nerve agent attack will not stop Donald Trump from bonding with Vladimir Putin next week.
The President flies from the UK to a summit with the Russian leader in Helsinki on Monday.
Quizzed on whether the Novichok attack made him reconsider, he said: “I think getting along with China, getting along with Russia, is a good thing.”
He suggested Mrs May’s plans for a soft Brexit was a hostile move towards the US because “the European Union is very bad to the United States on trade”.
Theresa May has urged Mr Trump to tackle Mr Putin on Novichok and other international outrages, including cyber attacks.
Mayor Khan doesn’t like me but I say to him: You’ve done terrible job on terror
The Labour heavyweight has “done a very bad job on terrorism” by allowing so many migrants to come to the city, the President controversially argues.
US President Donald Trump talks candidly to The Sun about London’s Mayor Sadiq Khan
The incendiary remarks are the most vicious in the White House boss’s long-running feud with London’s first Muslim mayor.
It began more than two years ago during Trump’s US presidential election campaign when Mr Khan attacked his vow to temporarily ban all Muslims from entering America.
Deepening the duo’s bitter war of words again, Mr Trump told The Sun in an exclusive interview ahead of his arrival in Britain: “I think allowing millions and millions of people to come into Europe is very, very sad.
“I look at cities in Europe, and I can be specific if you’d like. You have a mayor who has done a terrible job in London. He has done a terrible job.
“Take a look at the terrorism that is taking place. Look at what is going on in London. I think he has done a very bad job on terrorism.
“I think he has done a bad job on crime, if you look, all of the horrible things going on there, with all of the crime that is being brought in.”
London was hit by four terror attacks last year — including in Westminster, London Bridge, Parsons Green Tube station and Finsbury Park’s mosque.
Speaking to The Sun inside the US Embassy in Brussels, the US President also revealed he thinks Mr Khan has shown a lack of respect to America by attacking him personally.
Mr Trump added: “I think he has not been hospitable to a government that is very important. Now he might not like the current President, but I represent the United States.
“I also represent a lot of people in Europe because a lot of people from Europe are in the United States.”
Mr Trump also clashed with Mr Khan after last June’s van and knife rampage on London Bridge and Borough Market — mocking the mayor for his appeal to Londoners to stay calm.
The President tweeted: “At least 7 dead and 48 wounded in terror attack and Mayor of London says there is ‘no reason to be alarmed!’”
Mr Khan described the tweet as “ill-informed”.
A source close to Mr Khan last night pointed out that the Home Office is in charge of immigration policy for London and the whole country and not those in City Hall.
Meanwhile, a Tory MP faced calls to be suspended yesterday after being accused of Islamophobia over a picture he tweeted of Mr Khan.
Michael Fabricant posted an image with the London Mayor’s head on an inflatable pig that is being mounted by a second pig along with Mr Trump laughing.
Piers Morgan and Sadiq Khan get into furious row over crime stats in London as GMB host asks ‘Is my child going to be stabbed in the street?’
The tweet is thought to be in response to Mr Khan’s decision to allow a 20ft “Trump Baby” blimp to be flown over London during the President’s visit.
Mr Fabricant deleted the image and claimed he did not see that it featured Mr Khan’s face, saying: “My fault was not checking it closer on my iPhone first.”
But Labour’s Luke Pollard said: “Tweeting racism is not a good look for a Conservative MP when there is a real problem with Islamophobia in the Tory party.”
Trump on London crimewave
DONALD Trump says London is in the middle of a crimewave — and blasted Sadiq Khan for failing to tackle the problem.
He said the mayor has “done a bad job on crime”.
It follow suggestions by the President earlier this year that gangs in the capital were getting round our strict gun laws by stabbing people instead.
Mr Trump said: “Yes that’s right — they don’t have guns, they have knives.”
More than 50 Londoners have been killed with knives this year. Nine people have been shot.
In 2017, there were at least 115 murder probes with 80 deaths the result of stabbings.
Blood on the walls
ONE British hospital is so bad that it has “blood all over the walls”, the President has claimed.
Recalling an article he read recently, Mr Trump said: “They had a story in one of the major New York newspapers recently about your hospital. You know about that story? I’m sure you’ve seen it.
“What they say is, it is worse than any hospital they have ever seen in a war zone.
“It is right in the middle of London. I guess it used to be the ultimate and now there is, you know, there is blood all over the walls, all over the floors.
“It was a very major story and I have heard it from others, too, so I think it is very sad. Very sad.”
It is the second time the US leader has attacked the hospital, which he has not named.
It is believed to be the Royal London Hospital in Whitechapel, East London, where a record 702 stabbing victims were treated last year.
Trump dubbed it “a war zone” during a speech in May to the National Rifle Association about the spiralling danger posed by knife crime.
Leading Royal London trauma surgeon Dr Martin Griffiths later said he would be “happy to invite Mr Trump to my prestigious hospital”.
The wave of migrants from the Middle East and Africa is permanently changing the continent for the worse, the 72 year-old president argued.
And he claimed the situation pains him personally as the son of two EU countries.
Mr Trump told The Sun: “I have great love for countries in Europe.
“Don’t forget, essentially I’m a product of the European Union, between Scotland and Germany.
“Right? My father Germany, my mother Scotland.
But in a controversial outburst, he added: “I think what has happened to Europe is a shame.
“Allowing the immigration to take place in Europe is a shame.
“I think it changed the fabric of Europe and, unless you act very quickly, it’s never going to be what it was and I don’t mean that in a positive way.
“So I think allowing millions and millions of people to come into Europe is very, very sad.
“I think you are losing your culture. Look around. You go through certain areas that didn’t exist ten or 15 years ago.”
Mr Trump made tackling illegal US immigration one of the planks of his 2016 election campaign.
No1 fan loves his football shirt gift
“MR President, these gentlemen are from The Sun,” an aide formally announced as we were ushered into the Trump inner sanctum.
Entering the court of an emperor, it pays to bring a gift.
We presented him with an England shirt when we interviewed him at the US Embassy in Brussels on Wednesday, ahead of the Nato summit.
“Oh wow. I love gifts,” he said, happily obliging our photographer Paul Edwards by holding the personalised top up with a trademark grin.
“You don’t hear the word England as much as you should,” he continued.
“I think England is a beautiful name.”
Two things about him struck me most.
First, Trump has total power. Nobody on his White House staff tells him what to say, or questions him when he says it.
When Press Secretary Sarah Huckabee Sanders announced our scheduled ten-minute slot was almost up, the President swiftly interjected: “No, give them a little bit more.”
We stayed for 28 minutes, with no more prompts to go.
Secondly, he is a very sensitive man, constantly saying how much various people like him. It clearly pains him today that he is not being welcomed to Britain as a hero and our most important ally.
On our way out, we met Trump’s Chief of Staff John Kelly. The former US Marine Corps general took me aside and said: “I read The Sun every day. I love Britain.”
Why would I stay in London when I feel so unwelcome?
DONALD Trump has admitted he “feels unwelcome” in London as a major security operation was launched for his arrival in the UK yesterday.
But the tycoon insists real British people “love the President of the United States”.
Mr Trump told The Sun he will be largely staying away from the capital to avoid huge street protests of up to 200,000 today.
But he blamed them on politicians — singling out his nemesis, Mayor of London Sadiq Khan.
Revealing he has been told of the 20ft “Trump Baby” blimp that will be flown above Parliament Square today, he said: “I guess when they put out blimps to make me feel unwelcome, no reason for me to go to London.
“I used to love London as a city. I haven’t been there in a long time. But when they make you feel unwelcome, why would I stay there?
“And when I say that I am talking about government because the people of the UK agree with me.”
Mr Trump let his true feelings slip during an exclusive interview with The Sun hours before Air Force One touched down at Stansted Airport at 2pm yesterday.
Of his four-day visit, he added: “Many people are delighted. I get thousands of notifications from people in the UK that they love the President of the United States.”
He described a West London pub being renamed The Trump Arms for the duration of the trip as “wonderful”, adding: “I love those people. Those are my people.”
Mr Trump added: “You know, a poll just came out that I am the most popular person in the history of the Republican Party — 92 per cent. Beating Lincoln. I beat our Honest Abe.
“But the people of the UK, and I’ll bet if you had an honest poll, I’d be very strong. They want the same thing I want. I love the UK.”
His trip is a lower key working visit rather than the full state visit that the Queen invited him on 18 months ago.
Asked why he has failed to visit Britain as President until now, Mr Trump said: “Well, you know the United States has been very busy. We have been doing very well.”
Theresa May hosted a dinner with 150 business bosses at Winston Churchill’s birthplace Blenheim Palace for Mr Trump last night.
Donald Trump arrives in UK and boasts that Brits ‘like me a lot’
The Scots, Irish and Welsh Guards’ bands opened the event with a military ceremony in the Great Court.
Mr Trump and wife Melania are travelling everywhere in his Marine One helicopter to avoid demonstrations — including in and out of last night’s accommodation at the US Ambassador’s residence, Winfield House in Regents Park.
Protesters outside mounted a “Keep Trump Awake” rally — banging pots, pans and drums and blowing vuvuzelas from 8pm.
But when an estimated 200,000 protesters meet for the “Together Against Trump March” in central London at 2pm today, he will be at Chequers for talks with Mrs May.
The Trumps then fly to Scotland to spend the weekend at his golf resorts in Turnberry and Aberdeen.
Labour leader Jeremy Corbyn attacked Mrs May for inviting Mr Trump to Britain while “his dangerous and inhumane policies are putting the lives and wellbeing of millions of people at risk”.
Trump to meet ‘incredible’ Queen
DONALD Trump described the Queen as “a tremendous woman” ahead of their first meeting today.
The US President and wife Melania were due to have tea with the 92-year-old monarch at Windsor Castle this afternoon.
He told The Sun he was not nervous about it — but was in awe of Her Majesty’s flawless public service.
Mr Trump said: “She is a tremendous woman. I really look forward to meeting her. I think she represents her country so well.
“If you think of it, for so many years she has represented her country, she has really never made a mistake. You don’t see, like, anything embarrassing. She is just an incredible woman.
“My wife is a tremendous fan of hers. She has got a great and beautiful grace about her.”
Mr Trump’s Scottish-born mum Mary was an obsessive fan of the Queen, he said.
He added: “My mother loved the Queen. Any time the Queen was on television, my mother wanted to watch it.” Her Majesty will meet Mr Trump and the First Lady at the dais in the Quadrangle of the historic royal residence in Berkshire.
A guard of honour, comprised of the Coldstream Guards, will give a royal salute and US anthem The Star-Spangled Banner will be played.
Mr Trump and the Queen will then inspect the guard of honour and watch the soldiers march past.
Afterwards, The President and First Lady will join the Queen for tea inside the castle.
Her Majesty has met with previous White House couples including Barack and Michelle Obama, George W and Laura Bush, and Ronald and Nancy Reagan.
UK must up defence spending
THERESA May must listen to her generals and hike defence spending to keep the Special Relationship intact, said Mr Trump.
His Secretary of Defense asked the UK Government to go significantly above Nato’s minimum target of 2 per cent of GDP in funding for its military as the US’s major ally.
The President told The Sun he agrees with Jim Mattis “100 per cent”.
He added: “Two per cent isn’t enough. The US pays 4.2 per cent of a much larger GDP.
“I’m very impressed that Jim sent that letter. I think that is an exact right letter.”
Mr Trump defended himself against allies’ charges of blackmail over his demand for rapid rises in all 29 Nato member states’ defence budgets.
Asked if he was a bully, he said: “I’ll tell you what, we’ve had 40 years of presidents saying the same thing in a nicer way and they got nothing, so call it what you want.
US President Donald Trump talks candidly to The Sun about Defence budgets
“They’re taking advantage of the United States. I’m not going to let it happen.”
Mr Trump caused panic by implying he could pull the US out of Nato if other countries did not hike their contributions.
He was asked at a Brussels press conference if he had threatened to withdraw and replied: “I told people I’d be very unhappy if they didn’t up their commitment. Yesterday I let them know I was extremely unhappy.”
He insisted nations had finally agreed to increase expenditure, adding: “Everyone in the room thanked me.”
But French President Emmanuel Macron denied Nato allies had agreed a spending rise.
The US wants its Nato allies to share more of the financial burden on defence.
In 2014 Nato nations committed to moves toward reaching the 2 per cent of GDP figure within 10 years.
Nato estimated just 15 members will meet the aim by 2024 based on current trends.
(BBG) The U.K.’s populist triumph is now in doubt. What about the U.S. version?
The U.K.’s 2016 vote to leave the European Union represented a moment of vindication and hope for Donald Trump. No wonder he sounds worried now, as he arrives in the U.K. for his visit.
It’s not the protestors waiting at every stop, or even the giant orange Trump Baby balloon floating over London that’s likely to irk the thin-skinned president most. It’s the fact that a great, populist juggernaut that so closely prefigured his own rise to power is sputtering.
Trump is certainly bothered. He declared the U.K. in “turmoil” as he left Washington, and then in an explosive interview with the tabloid Sun newspaper Thursday, just before he joined Prime Minister Theresa May for a black tie dinner, the president let rip. He accused May of botching Brexit, said former Foreign Secretary Boris Johnson, a staunch Brexiter and May rival, would “make a great prime minister” and suggested her Brexit position would kill the prospect of a U.S.-U.K. trade deal.
That trade deal is prized by Brexiters as proof it was all worth it. The U.S. is Britain’s largest single-country export market, though it is well behind the EU, where about 43 percent of U.K. goods and services exports go and which is the source of 54 percent of imports. But it’s difficult to believe it matters that much to Trump. The U.S. does more trade with Canada, Mexico and China. A U.K.-U.S. trade agreement would be nice, especially as a reward for Britain’s security support. But it’s not the kind of deal that is going to keep Trump up at night.
Rather, Trump has good reason to focus on the details of the U.K.’s Great Divorce because of what its problems say about his own grand projects — his Mexican border wall, his trade wars, his North Korean denuclearization — when they come up against reality.
It’s becoming clear now to Britons that the promised benefits of Brexit aren’t likely to materialize, and that the best they can hope for is a divorce settlement with Europe that minimizes the disadvantages of leaving.
That’s a long way from the grand ambition expressed by the Brexiters’ campaign rallying cry, “Take Back Control.” And it has to make Trump wonder whether Americans might start thinking the same about “Make American Great Again.” Both populist slogans were oxygenated by an external enemy: Where Trump declared war on immigrants and the Washington swamp, Brexiters spit venom at a sovereignty-usurping foreign bureaucracy. If Brexiters could rally people against smug Eurocrats in Brussels, then surely Trump could win Americans to his side too. Like his candidacy, the Leave campaign succeeded against considerable odds.
But the Brexit dream, as ex-Foreign Secretary Boris Johnson put it in his resignation letter on Monday, is dying. It’s not that Brexit won’t happen; even now, it’s hard to imagine a way back to a pre-referendum world. But Leave leaders marched their followers up a hill from where they now survey a muddy, costly and laborious path with none of the promised “sunlit uplands” that Brexiters appropriated from Churchill’s famous peroration.
On Thursday, May’s government published its first detailed document setting out proposals for a future relationship with the EU. It came with oratory about leaving the European single market and taking back legal control, but the reality is that she’s seeking a deal that apes a lot of existing arrangements in an attempt to keep trade flowing and prevent economic losses. Trump, the self-proclaimed deal-maker, might have noticed that Britain’s large financial services sector has been left in the lurch.
May’s plan is so offensive to hardcore Brexiters that two senior ministers resigned in the days after her plan was revealed to the cabinet, and many more have been plotting to undermine it. And yet, it’s just an opening bid in negotiations that have a long way to run. There’s every possibility that the EU — which insists that its single market freedoms of goods, labor, capital and services cannot be turned into an a la carte buffet — will reject the offer. There’s still a possibility that the U.K. and the EU will not reach a deal, in which case a very harsh Brexit that exposes Britain to hostile economic relations with longtime allies indeed is possible.
The central conceit of those who led the Brexit campaign was the notion that the referendum represented a clear objective. The reality is that Brexiters within May’s cabinet could not even agree on what leaving the EU should mean. It’s absurd to think that voters have a clearer idea.
Both Brexiters and Trump channeled dissatisfaction with the status quo and capitalized on the emotional draw of a clean break with an established order. But both movements lacked a workable vision of a new order. Trump stumbles from border-control edicts to tariffs to summit-wrecking. In the same way, British hard-leavers still haven’t articulated a vision of Brexit that is workable, as the new Brexit minister Dominic Raab noted on Thursday.
There is one big difference. Trump is president of the U.S. and has certain undeniable powers. The Brexiters are junior coalition partners in a weak Conservative government negotiating with a unified EU that holds better cards. The government’s negotiating position shows just how far it is from the dream the Leavers sold voters with those catchy slogans. That surely must make Trump a little uneasy.
(GUA) President praises Boris Johnson and says that May ignored his advice on Brexit negotiations in extraordinary interview
Theresa May will come under intense pressure to secure a future trade deal with the United States as she sits down with Donald Trump just hours after he warned that her soft Brexit blueprint would “kill” Britain’s chances.
In an extraordinary interview that threatened to undermine her new Brexitstrategy, painfully thrashed out with her cabinet last week, Trump questioned whether her plans upheld the referendum result and accused her of ignoring his advice.
On Thursday evening, as May told a dinner held in Trump’s honour at Blenheim Palace that her policy would create an “unprecedented opportunity” for a free trade agreement, his damaging statements were revealed.
She now faces the challenge on Friday of persuading him that her strategy would “tear down” the bureaucratic barriers that Brussels had put in the path of business as she attempts to overcome US fears about the future trading relationship.
Asked about Trump’s incendiary interview, White House press secretary Sarah Sanders insisted the president “likes and respects Prime Minister May very much”.
“As he said in his interview with the Sun she ‘is a very good person’ and he ‘never said anything bad about her’. He thought she was great on Nato today and is a really terrific person,” she added.
In the interview, which ignores all usual diplomatic conventions, Trump warned that her soft Brexit approach would scupper any hopes of a free trade agreement, a cherished prize of many Brexiters.
“If they do a deal like that, we would be dealing with the European Unioninstead of dealing with the UK, so it will probably kill the deal. If they do that, then their trade deal with the US will probably not be made,” he said.
“We have enough difficulty with the European Union. We are cracking down right now on the European Union because they have not treated the United States fairly on trading.”
Trump accused the prime minister of ignoring his advice on Brexit negotiations. “I would have done it much differently. I actually told Theresa May how to do it, but she didn’t agree, she didn’t listen to me. She wanted to go a different route,” he said.
He cast doubt on whether the prime minister was delivering the Brexit that the British people had voted for in 2016. “The deal she is striking is a much different deal than the one the people voted on. It was not the deal that was in the referendum. I have just been hearing this over the last three days. I know they have had a lot of resignations. So a lot of people don’t like it.”
Earlier, Trump, speaking at the Nato summit in Brussels, had appeared to throw his weight behind a hard Brexit by suggesting the government was taking “a different route” from the complete break from the EU that he said the British people had voted for.
But May insisted: “We have come to an agreement at the proposal we’re putting to the European Union which absolutely delivers on the Brexit people voted for. They voted for us to take back control of our money, our law and our borders and that’s exactly what we will do.”
However, he undermined her still further in his Sun interview by describing Johnson as “a very talented guy”, adding: “I am not pitting one against the other. I am just saying I think he would be a great prime minister. I think he’s got what it takes.”
The US president also attacked Sadiq Khan, the mayor of London, with whom he has had a long-running dispute, suggesting he was a “terrible mayor” who had “done a very bad job on terrorism” by allowing so many migrants to come to the city. He said that he felt unwelcome in London after hearing of the “Trump baby” blimp.
The unpopularity of Trump’s visit was already apparent by Thursday night, with protests starting as soon as he landed at Stansted in Air Force One at 1.51pm. Shortly after he was met at the airport by the international trade secretary, Liam Fox, and by the US ambassador Woody Johnson, banners were unfurled opposite the US embassy questioning his human rights record. Protesters later gathered to create a “wall of noise” outside the ambassador’s residence, where he was due to stay.
Trump will largely avoid the capital and other cities that could host significant protests. He will instead be kept mainly insulated from the public at various country estates or palaces and will travel largely by air.
Nonetheless, protesters will seek to gain his attention, with the blimp to be flown over Westminster on Friday morning before an estimated 70,000 people take to the streets. There will be rallies in Glasgow and Manchester as well as a women’s march in London and the main Stop Trump protest, which will end in Trafalgar Square.
On Thursday night, Trump and his wife, Melania, attended a black-tie dinner at Blenheim Palace in Oxfordshire, the birthplace of Winston Churchill, with business leaders as well as most senior members of the cabinet.
It is understood that he will join May on Friday for a counter-terrorism demonstration by UK and US special forces at Sandhurst, before the main business element of his trip: talks with the prime minister and the new foreign secretary, Jeremy Hunt, at the PM’s Chequers country retreat.
Downing Street said that as well as trade and Brexit, the talks would cover Russia and the Middle East.
Later on Friday Trump and his wife – who will spend some of her time on separate engagements with May’s husband, Philip – will have tea with the Queen at Windsor Castle before flying to Scotland, where they are expected to visit Trump’s golf resorts in Aberdeenshire and Ayrshire and stay at the 120-room hotel at Turnberry.
While at the Nato summit, Trump said he had been reading up closely on Brexit in recent days, and he described the UK as “a pretty hot spot with many resignations”. He had already described the UK as a country in turmoil.
He insisted he was popular in the UK, citing his strong line on migration. “They like me a lot in the UK. I think they agree with me on immigration.”
A Guardian/ICM poll released on Wednesday showed 53% of respondents disagreed with the idea Trump was doing a good job, and 63% disagreed with the statement that they would like to see a politician like him as British prime minister.
(BBG) Theresa May released the most contentious document of her two-year premiership on Thursday, vowing to push through her plan to keep the U.K. closely tied to the European Union single market after Brexit.
Despite the resignation of two pro-Brexit Cabinet ministers and a growing rebellion from within her own party, May published a 98-page “white paper” setting out in detail the deep trading partnership the U.K. wants with the EU.
At its heart is a proposal for a new U.K.-EU “free trade area,” with interlinked customs regimes, and identical regulations for industrial goods and agri-food. While there would be “no tariffs on any goods,” the U.K.’s vast services sector will suffer significant disruption. Banks in particular will lose their current access to the EU market, as the government gives up on its earlier plan for both sides to recognize each other’s regulations.
May faces a huge task trying to persuade EU negotiators to accept that the proposals are viable, while also keeping her Conservative party and Parliament on side. Time is running out to reach an exit agreement by the self-imposed October deadline, and May’s plan has nothing new about the critical issue that’s holding up progress: avoiding customs checks at the border with Ireland.
Even U.S. President Donald Trump took a view. Hours before he is due to touch down in the U.K., he lobbed a verbal hand grenade at his host, saying May isn’t giving voters the Brexit deal they wanted.
‘Brexit is Brexit’
“I would say Brexit is Brexit,” Trump said Thursday at a news conference at the NATO summit in Brussels. “The people voted to break it up so I would imagine that’s what they would do, but maybe they’re taking a different route — I don’t know if that is what they voted for.”
May appealed to European negotiators to “engage” with her blueprint in the same spirit of respect that she said her government was taking toward the EU’s own principles and red lines.
“Our proposal is comprehensive. It is ambitious. And it strikes the balance we need — between rights and obligations,” May wrote in the foreword to the white paper. “It would deliver a principled and practical Brexit that is in our national interest, and the U.K.’s and the EU’s mutual interest.”
The U.K. has also set out a complicated structure for supervision of the new relationship that would allow the two sides to discuss rule tweaks and include a mechanism for solving disputes.
The British prime minister, European leaders and ministers would establish a “governing body” to set the direction of the future relationship, while a joint committee of officials would provide the day-to-day running of the agreement.
Crucially, in a move that could anger Brexiteers, if there’s a dispute over the interpretation of EU rules that the U.K. has agreed to adhere to, the European Court of Justice could have the final say.
Details in the document include:
U.K. will mirror EU rules for goods, as well as collecting tariffs on behalf of the bloc. In a sign of the imbalance in the relationship, May isn’t proposing the EU collect tariffs on behalf of the U.K.
Britain proposes setting up new arrangements to allow it to have a voice — but not a vote — when EU introduces new regulations, and to facilitate the customs arrangement
On rules of origin which govern whether goods are treated as EU-made, Britain is asking for no changes to current arrangements. This is crucial for manufacturers including car-makers, who otherwise face tariffs when exporting to the EU
White paper sets out the parliamentary process after a deal has been agreed with the EU, and makes it clear that it will be conditional on support from lawmakers
U.K. wants to keep participating in EU agencies covering chemicals, aviation and medicines. It also proposed a close cooperation with the European Maritime Safety Agency and new arrangements for a closer association with the Euratom nuclear regulator than any other non-EU country
U.K. acknowledges its position on cooperation over the 10 billion-euro ($11.6 billion) Galileo satellite navigation program is at odds with that of the EU. It maintains it wants to retain involvement in the project, in particular its Public Regulated Service — the encrypted navigation used for government and defense purpose, which the EU wants to exclude Britain from
On immigration, the document says Britain will continue to be “open and tolerant,” while ending the free movement of people. It stops short of saying EU citizens will be prioritized in any future immigration system
U.K. will also seek to ensure U.K. and EU citizens can still use each other’s health services when abroad, and foreign residents can still access their pension entitlements. Irish citizens will enjoy “special status” distinct from that of other EU nationals
(BBG) Facebook Inc. could be fined a symbolic 500,000 pounds ($664,000) by the U.K.’s privacy regulator after the social network giant failed to prevent key user data falling into the hands of a political consultancy that helped get President Donald Trump elected.
The U.K. Information Commissioner’s Office is threatening the company with the maximum penalty allowed, it said Wednesday when issuing its first findings in a probe that looked at some 30 organizations, including social media platforms such as Facebook. The tech giant is accused of not properly protecting user data and not sharing how people’s data was harvested by others.
In its report the ICO also said several overseas regulators and agencies had requested updates to help move their own investigations forward.
“Given this, and the high public interest issues raised by this work, this report has been put together to consistently inform all parties as to our progress at this time,” the ICO said.
On a call with reporters, the U.K.’s Information Commissioner Elizabeth Denham said the fine “sends a clear signal that I consider this a significant issue, especially when you look at the scale and the impact of this kind of data breach.”
“Facebook has failed to provide the kinds of protections they’re required to do under data protection laws,” she said.
The revelations that data belonging to as many as 87 million Facebook users and their friends may have been misused is a “game changer” in the world of data protection, Denham said. Her office is leading the European investigations into how such an amount of data — most belonging to U.S. and U.K. residents, she says — could have ended up in the hands of a consulting firm that worked on Donald Trump’s U.S. presidential campaign.
Facebook will get a chance to respond to the proposed penalties before the ICO releases a final decision.
“As we have said before, we should have done more to investigate claims about Cambridge Analytica and take action in 2015,” said Erin Egan, Facebook’s chief privacy officer. “We have been working closely with the ICO in their investigation of Cambridge Analytica, just as we have with authorities in the U.S. and other countries. We’re reviewing the report and will respond to the ICO soon.”
The ICO’s findings show “the scale of the problem and that we are doing the right thing with our new data protection rules,” EU Justice Commissioner Vera Jourova said Wednesday, referring to Europe’s new General Data Protection Regulation, in place since May 25.
Under the law, the ICO could have levied a much higher penalty. Violations of GDPR rules may lead to fines of as much as 4 percent of a company’s global annual sales. For the year ending Dec. 31 2017, Facebook’s revenue totaled $40.65 billion, meaning it could have faced a maximum fine of about $1.6 billion.
But GDPR only applies to violations committed on or as of May 25 and not retro-actively. Instead, a 500,000-pound fine equates to less than 1 percent of the $114 million the company generated per day in 2017.
One of Europe’s most outspoken privacy regulators, Johannes Caspar in Hamburg, Germany, said in an email that his office also started an infringement procedure under the previous data protection law against Facebook’s unit in Ireland, its European headquarters. Any decisions here could lead to a maximum fine of 300,000 euros, he said.
Denham said her office is now combing through “hundreds of terabytes of data” it gathered at the offices of Cambridge Analytica during searches in March after reports that the firm had obtained swathes of data from a researcher who transferred the information without Facebook’s permission.
The ICO also plans to send warning letters to 11 political parties and will call on them to agree to audits of their privacy practices. Enforcement notices are planned against Cambridge Analytica affiliate company SCL Elections and Canadian company Aggregate IQ, all of which worked closely together.
While Facebook earlier said the data of as many as 2.7 million Europeans might have been shared with Cambridge Analytica, the company last month told EU lawmakers that private data about its European users may not have fallen into the hands of the U.K.-based data-crunching venture after all. Facebook said it wouldn’t be able to make any firm conclusions on the matter until it conducts its own audit.
U.K. lawmaker Damian Collins, head of a parliament committee investigating the impact of social media on recent elections, said Facebook needs to be more transparent.
“Given that the ICO is saying that Facebook broke the law, it is essential that we now know which other apps that ran on their platform may have scraped data in a similar way,” Collins said in a statement. “This cannot be left to a secret internal investigation at Facebook.”
(Economist) The revolt gathers against Theresa May’s Brexit plans
HAVING kept suspiciously quiet all morning Boris Johnson, the foreign secretary, confirmed the rumours whirring around Westminster and resigned in the afternoon on July 9th. He follows David Davis as the second minister to resign from Theresa May’s cabinet over the Brexit agreement hammered out on July 6th at Chequers, Mrs May’s official country residence. David Davis’s deputy, Steve Baker, has also resigned from the Department for Exiting the European Union.
Mr Johnson was the most visible and probably most effective leader of the Brexiteers during the EU referendum campaign in 2016. Even before his resignation he had let it be known that he was deeply unhappy about the Chequers agreement, reportedly comparing it to “polishing a turd”. Like Mr Davis, he has been unenthusiastic about the government’s softening on Brexit for some time. He has long harboured ambitions to lead the Conservative Party, and may have calculated that if there is to be a leadership challenge against Mrs May, this is his last chance to claim the throne.
Immediately after Mr Johnson’s resignation, Mrs May was forced to defend her Brexit plan in the House of Commons. She made a robust defence of her position, and won support from Remainer Tory MPs, who hope that the prime minister has at last summoned up the courage to face down the hard-Brexiteers.
In his resignation letter to the prime minister, Mr Johnson argues that Britain is heading for a “semi-Brexit”. In particular, he says that the Chequers agreement surrenders “control over our rulebook on goods and agrifoods”, reducing Britain to the status of a “colony”. In answer to critics who ask why he did not resign on July 6th, he has this to say: “As I said then, the government now has a song to sing”. He goes on: “The trouble is that I have practised the words over the weekend and find that they stick in the throat.” In a radio interview an aide to Mr Johnson said that the former foreign secretary had not taken the decision lightly, and that further ministerial resignations were “certainly possible”.
DOMINIC RAAB, a leading Brexiteer, has been appointed the new Brexit secretary following the resignation of David Davis late on Sunday night. The promotion of Mr Raab, the former housing minister, maintains the balance between Brexiteers and former Remainers in the cabinet. Despite this, however, the government’s divisions are being exposed as never before.
Prompted by Mr Davis’s resignation, hardline Brexiteers have been using the morning radio and TV programmes to attack the prime minister’s approach to Brexit and in particular the plan agreed at Chequers, her country residence, on July 6th, which provoked the departure of Mr Davis. Boris Johnson, the foreign secretary, has remained conspicuously silent this morning but has been reported as saying of the Chequers agreement that it amounted to “polishing a turd”. Angry and disillusioned Tory backbenchers are talking openly of a leadership challenge to Mrs May. The government, which lacks a majority in Parliament, appears to be in disarray.
Following Mr Davis, the charge against the Chequers agreement was joined by Steve Baker, a junior Brexit minister who resigned with his boss. He has also accused Mrs May of giving too much away to the EU, claiming the government has made “mistakes” all along in its negotiations with Brussels. He claims that his department was “blindsided” by the prime minister’s proposals, which include remaining in a common regulatory area with the EU for goods. Mr Baker argues that this represents a “significant evolution” from Mrs May’s previous speeches on the subject.
Backbench Brexiteers were much less polite this morning. Jacob Rees-Mogg, the leader of the main Tory pressure group advocating a hard Brexit, the European Research Group, said the Chequers agreement sought to “stymie” Brexit rather than deliver it. Another Tory MP, Marcus Fysh, called the government’s policy an “absolute stinker”; his colleague Andrew Bridgen said he had “no confidence” in Mrs May’s policy, and thus no confidence in her. He warned darkly that “a large number of my colleagues will have that same view”, raising the prospect of a leadership challenge. That requires the nod from just 15% of the parliamentary party, 48 MPs. Mr Bridgen predicts a “huge backlash” among Tory MPs over the Chequers agreement.
At least Mrs May has received the backing of some of the other Brexiteers in the cabinet. Michael Gove, the environment secretary, was the first to back the Chequers policy publicly. Liam Fox, the trade secretary, has also backed her. This morning Andrea Leadsom, the leader of the House of Commons, supported her.
Mrs May is due to brief Parliament in the afternoon of July 9th on her Chequers plan, while her chief of staff is also calling in opposition MPs and peers to give them a briefing. The prime minister’s task is to staunch a full-scale Brexit revolt—and that is before she has even presented her plans to the EU negotiators.
(ZH) Update 4: A second junior Brexit minister has resigned – Suella Bravermanm MP for Fareham. This leaves just two of the five person Brexit team remaining.
* * *
Update 3: Here is the full text of Theresa May’s letter in response to David Davis’s resignation as Brexit Secretary (highlights ours):
Thank you for your letter explaining your decision to resign as Secretary of State for Exiting the European Union.
I am sorry that you have chosen to leave the Government when we have already made so much progress towards delivering a smooth and successful Brexit, and when we are only eight months from the date set in law when the United Kingdom will leave the European Union.
At Chequers on Friday, we as the Cabinet agreed a comprehensive and detailed proposal which provides a precise, responsible, and credible basis for progressing our negotiations towards a new relationship between the UK and the EU after we leave in March. We set out how we will deliver on the result of the referendum and the commitments we made in our manifesto for the 2017 general election:
Leaving the EU on 29 March 2019.
Ending free movement and taking back control of our borders.
No more sending vast sums of money each year to the EU.
A new business-friendly customs model with freedom to strike new trade deals around the world.
A UK-EU free trade area with a common rulebook for industrial goods and agricultural products which will be good for jobs.
A commitment to maintain high standards on consumer and employment rights and the environment.
A Parliamentary lock on all new rules and regulations.
Leaving the Common Agricultural Policy and the Common Fisheries Policy.
Restoring the supremacy of British courts by ending the jurisdiction of the European Court of Justice in the UK.
No hard border between Northern Ireland and Ireland, or between Northern Ireland and Great Britain.
Continued, close co-operation on security to keep our people safe.
An independent foreign and defence policy, working closely with the EU and other allies.
This is consistent with the mandate of the referendum and with the commitments we laid out in our general election manifesto: leaving the single market and the customs union but seeking a deep and special partnership including a comprehensive free trade and customs agreement; ending the vast annual contributions to the EU; and pursuing fair, orderly negotiations, minimising disruption and giving as much certainty as possible so both sides benefit.
As we said in our manifesto, we believe it is necessary to agree the terms of our future partnership alongside our withdrawal, reaching agreement on both within the two years allowed by Article 50.
I have always agreed with you that these two must go alongside one another, but if we are to get sufficient detail about our future partnership, we need to act now. We have made a significant move: it is for the EU now to respond in the same spirit.
I do not agree with your characterisation of the policy we agreed at Cabinet on Friday.
Parliament will decide whether or not to back the deal the Government negotiates, but that deal will undoubtedly mean the returning of powers from Brussels to the United Kingdom.
The direct effect of EU law will end when we leave the EU. Where the UK chooses to apply a common rulebook, each rule will have to be agreed by Parliament.
Choosing not to sign up to certain rules would lead to consequences for market access, security co-operation or the frictionless border, but that decision will rest with our sovereign Parliament, which will have a lock on whether to incorporate those rules into the UK legal order.
I am sorry that the Government will not have the benefit of your continued expertise and counsel as we secure this deal and complete the process of leaving the EU, but I would like to thank you warmly for everything you have done over the past two years as Secretary of State to shape our departure from the EU, and the new role the UK will forge on the world stage as an independent, self-governing nation once again.
You returned to Government after nineteen years to lead an entirely new Department responsible for a vital, complex, and unprecedented task.
You have helped to steer through Parliament some of the most important legislation for generations, including the European Union (Notification of Withdrawal) Act 2017 and the European Union (Withdrawal) Act 2018, which received Royal Assent last week.
These landmark Acts, and what they will do, stand as testament to your work and our commitment to honouring the result of the referendum.
* * *
Update 2: Labour Party leader Jeremy Corbyn wasted no time in launching a full on attack on May, tweeting: “David Davis resigning at such a crucial time shows @theresa_may has no authority left and is incapable of delivering Brexit. With her Government in chaos, if she clings on, it’s clear she’s more interested in hanging on for her own sake than serving the people of our country.”
David Davis resigning at such a crucial time shows @Theresa_May has no authority left and is incapable of delivering Brexit.
With her Government in chaos, if she clings on, it’s clear she’s more interested in hanging on for her own sake than serving the people of our country.
And in light of recent advanced by democrat socialists in the US, it probably wouldn’t be too ridiculous for the UK to make a hard left turn next as well.
* * *
Update 1:Confirming earlier rumors, Sky News reports that Steve Baker, Britain’s junior Brexit minister, technically the Brexit minister for “contingency planning”, is the other (for now) conservative MP to resign alongside Davis.
* * *
In what has been called “an absolute bombshell”, U.K. Brexit Secretary David Davis resigned from Theresa May’s government late Sunday, one week before the UK is scheduled to present its demands to Brussels.
His full resignation letter is below (highlights ours):
Dear Prime Minister
As you know there have been a significant number of occasions in the last year or so on which I have disagreed with the Number 10 policy line, ranging from accepting the Commission’s sequencing of negotiations through to the language on Northern Ireland in the December Joint Report.
At each stage I have accepted collective responsibility because it is part of my task to find workable compromises, and because I considered it was still possible to deliver on the mandate of the referendum, and on our manifesto commitment to leave the Customs Union and the Single Market.
I am afraid that I think the current trend of policy and tactics is making that look less and less likely. Whether it is the progressive dilution of what I thought was a firm Chequers agreement in February on right to diverge, or the unnecessary delays of the start of the White Paper, or the presentation of a backstop proposal that omitted the strict conditions that I requested and believed that we had agreed, the general direction of policy will leave us in at best a weak negotiating position, and possibly an inescapable one.
The Cabinet decision on Friday crystallised this problem. In my view the inevitable consequence of the proposed policies will be to make the supposed control by Parliament illusory rather than real. As I said at Cabinet,the “common rule book” policy hands control of large swathes of our economy to the EU and is certainly not returning control of our laws in any real sense.
I am also unpersuaded that our negotiating approach will not just lead to further demands for concessions.
Of course this is a complex area of judgement and it is possible that you are right and I am wrong. However, even in that event it seems to me that the national interest requires a Secretary of State in my Department that is an enthusiastic believer in your approach, and not merely a reluctant conscript. While I have been grateful to you for the opportunity to serve, it is with great regret that I tender my resignation from the Cabinet with immediate effect.
Davis resignation comes two days after May received backing from her cabinet for a new “soft Brexit” plan which envisioned maintaining close ties with the EU after the UK’s departure from the block, news which was cheered the UK business lobby and which had set cable on an upward trajectory in early Asia trading, before the news hit which halted the pound’s ascent.
The cabinet signed up to the proposals, which were hammered out at Chequers – the country house of the UK Prime Minister – last week. May is due to unveil the plans tomorrow in parliament, before a potentially stormy meeting with her own MPs.
Davis had disagreed with May’s plans for keeping EU rules for goods and adopting a close customs model with the bloc, and his resignation threatens more political turmoil, this time in the UK, as moderates are set off against hard brexiteers.
However, some pro-Brexit Tories are angry about the plan, with speculation that it could end up in a leadership challenge.
As Sky News adds, some pro-Brexit Tories are angry about the plan and there is speculation it could end up in a leadership challenge. Sky’s political correspondent Lewis Goodall called the resignation of Mr Davis “an absolute bombshell”.
He said: “To resign tonight after the emergency meeting at Chequers on Friday is really quite shocking when you consider, apparently according to the briefing we received, that every single member of the cabinet – admittedly some with their reservations – all agreed that they would support the prime minister’s proposals and they would defend them in public.
“The big question now is, is David Davis going to be joined by any other figures? All eyes of course will be on Boris Johnson and other Brexiteers.”
According to BBC’s Laura Kuenssberg, “Davis concluded he could not stay in post after a meeting” with Theresa May earlier today – “understand he was furious at Number 10 handling”
Davis concluded he could not stay in post after a meeting in Number 10 earlier today – understand he was furious at Number 10 handling
Meanwhile, Foreign Secretary Boris Johnson reportedly described defending the plans as like “polishing a turd” during the Chequers summit, before eventually falling into line behind the prime minister.
* * *
As a reminder, late on Friday Theresa May won approval at an all-day Chequers summit for a pro-business plan to keep Britain intimately bound to the EU single market and customs union, beating back Eurosceptic cabinet opposition to her new “soft Brexit” strategy, the FT reported.
May briefed the media at 6.45pm on Friday that the cabinet had agreed a collective position to create a “UK-EU free trade area which establishes a common rulebook for industrial goods and agricultural products”. The plan would see Britain commit in a treaty to adopt new EU rules for goods— an approach viewed by some Tories as leaving the UK as “a vassal state”. Parliament could break the treaty, but trigger severe market reprisals from the EU if it did.
May challenged critics including foreign secretary Boris Johnson to back the plan for a “UK-EU free trade area” in a confrontation seen by senior Tories as a decisive moment in the tortuous Brexit process.
Johnson and five other cabinet ministers met on Thursday night at the Foreign Office to plan a counter-attack to try to preserve a clean Brexit, but they eventually concluded they could not stop Mrs May’s plan.
“People are not happy with what is being proposed but people are keen to keep the government together,” said one of those at the meeting at Mrs May’s country residence.
May’s team had vaunted the prime minister’s ability to face down the Eurosceptics, encouraged by pleas from mainstream Conservative MPs that the time had come for her to tell her critics to put up or shut up.
Davis’ unexpected resignation threatens to further inflame cabinet tensions, especially in light of an earlier Mirror report that 42 lawmakers had formally expressed no confidence in Theresa May. A leadership contest would be triggered if 48 Conservative MPs formally submit letters.
May said on Friday that the proposals were “good for the UK and good for the EU” and would “deliver prosperity and security”.
And while it remains unclear if there will be more resignation in Davis’ footsteps, according to the BBC at least one more minister is on their way out:
Following the news, cable dipped modestly however it has since regained much of the losses and looks set to continue on its upward trajectory established last Friday. As Bloomberg’s Mark Cranfield adds, “EUR/GBP will quickly unwind last week’s drop and then climb further as David Davis’ resignation leaves the U.K. without its most experienced Brexit negotiator. This dramatically reduces the chances of Theresa May being able to push the Brexit White Paper through the U.K. parliament this week.”
(Reuters) Britain’s Supreme Court dismissed on Wednesday an appeal by Goldman Sachs for compensation from Portugal’s Novo Banco over a $835 million loan to Novo Banco’s bankrupt predecessor, Banco Espirito Santo (BES), which was carved up by the state in 2014.
The decision, announced by the court on its website, sets a precedent that could help Portugal fend off other lawsuits involving major bondholders in BES, such as Pimco and Blackrock, which have challenged similar decisions by the Portuguese central bank in 2015 not to transfer liabilities to Novo Banco.
The loan arranged by Goldman Sachs (GS.N) was extended to BES by Luxembourg-based vehicle Oak Finance in 2014, shortly before the bank went bankrupt under the weight of the debts of its founding family, and Goldman has sought compensation from Novo Banco, which took over the healthy operations of BES.
Britain’s Supreme Court said it unanimously rejected the appeal, even though the original loan agreement was governed by English law. Novo Banco declined to comment.
After the collapse of BES in August 2014, Portugal’s central bank transferred some assets and liabilities to Novo Banco, which took over BES operations after an injection of about 5 billion euros ($5.8 billion) of public funds. It was acquired last year by U.S. private equity firm Lone Star.
In December 2014, the central bank specified the Goldman Sachs loan was not eligible for the transfer and had never been transferred, to which Goldman objected.
The court said it understood “that an English court must treat the Oak liability as never having been transferred to Novo Banco. It was therefore never party to the jurisdiction clause.”
It added there were ongoing administrative law proceedings in Portugal challenging the December 2014 decision, which have not yet been resolved.
A range of other lawsuits by bondholders in BES and Novo Banco also challenge a central bank decision at the end of 2015 to transfer more than 2 billion euros of bonds from the rescued Novo Bank back to BES, which is being liquidated.
London-based hedge fund Winterbrook Capital said last week it considered several notes issued by Novo Banco to be in default as a results of the resolution measures taken by Portugal’s central bank in 2014 and 2015.
Despite the warning, Novo Banco placed 400 million euros worth of subordinated debt notes just two days later on June 29, its first issue since the rescue, to strong investor demand.
(Reuters) Britain’s Queen Elizabeth granted royal assent to Prime Minister Theresa May’s flagship Brexit legislation on Tuesday, ending months of debate over the legislation that will formally end the country’s European Union membership.
The House of Commons speaker John Bercow said the EU withdrawal bill, passed by both houses of parliament last week, had been signed into law by the monarch, to cheers from Conservative lawmakers.
“I have to notify the House in accordance with the Royal Assent Act 1967 that her Majesty has signified her royal assent to the following acts … European Union Withdrawal Act 2018,” Commons Speaker John Bercow told lawmakers during a session of the house.
(Cnet) Alexander Nix reportedly took the money shortly after the media started scrutinizing the activity of Cambridge Analytica.
The former chief executive of Cambridge Analytica Alexander Nix was accused on Wednesday of taking $8 million from the company ahead of its collapse.
Investors backing a rebrand of the data consultancy firm are currently in a stand-off with Nix while trying to persuade him to return the money, according to the Financial Times.
Nix reportedly took the money shortly after British journalists began reporting on the company’s involvement in the mishandling of Facebook users’ personal data — a scandal that resulted in Cambridge Analytica shuttering its doors at the beginning of May.
Nix is due to give evidence in UK Parliament for a second time on Wednesday, after politicians issued a formal summons. Nix did not immediately respond to request for comment.
The government has incurred a loss of £2.1bn after selling another tranche of shares in Royal Bank of Scotland.
The shares were sold at 271p each, almost half the 502p a share paid in the government’s bailout of RBS a decade ago when it rescued the bank at the height of the financial crisis.
The return was “based on the reality of the situation that RBS is now in”, said Treasury Economic Secretary John Glen.
The taxpayers’ holding in RBS will fall to 62.4% from 70.1% due to the sale.
Mr Glen told the BBC’s Today programme that the bank was in a “much healthier position… and the taxpayer needs to receive some of that money back”.
“I would love it if we could sell the shares at a much higher price. Obviously that is what everyone would like to do, but we need to be realistic and look at the market conditions.”
He said RBS was “a completely different institution to where it was 10 years ago”.
“They’ve gone from operating in 38 countries to nine, their total assets have fallen significantly.”
By Simon Jack, BBC business editor
The government has proved a lousy investor – but that misses the point. This was not an investment it was a rescue. The government had no choice – without the government buying shares, RBS would have collapsed taking the UK economy with it.
Does it matter that we are selling at a loss? Well, yes, it would be nice to have made a few pounds. Does that mean it’s a mistake to start selling now? Not necessarily.
The government does not want to be the majority shareholder in a High Street bank. Waiting for the RBS share price to rise back to £5 could take another 10 years and, in the meantime, other investors would be put off investing because the know that one day there is going to be a massive seller of the shares – pushing the price down.
The hope is that over time, the gradual reduction in the government stake will make the shares more attractive and subsequent sales will be at higher prices. The other hope is that the government never has to get into the business of buying bank shares again
UK Government Investments, which manages the government’s RBS stake, said the sale had raised £2.5bn.
The sale is the first time that the government has cut its stake in RBS since 2015, when a 5.4% stake was sold at a price of 330p a share.
The government has said it intends to sell £15bn worth of RBS shares by 2023.
After the details of the latest share sale were announced, RBS shares fell by about 3% to 271p.
Investec analyst Ian Gordon said the timing of the share sale was “not unreasonable”, pointing out that the shares had been trading at close to their highest level for two years.
He said a combination of bad debts and restructuring costs had “destroyed the value of the business”.
Labour’s shadow chancellor, John McDonnell, had earlier criticised the government’s sale plans, saying there was “no economic justification” for selling the shares due to the “large loss” to the taxpayer.
But Chancellor Philip Hammond said the sale was “a significant step in returning RBS to full private ownership and putting the financial crisis behind us”.
“The government should not be in the business of owning banks. The proceeds of this sale will go towards reducing our national debt – this is the right thing to do for taxpayers as we build an economy that is fit for the future,” he added.
RBS chief executive Ross McEwan said the sale was “an important moment for RBS”.
“It also reflects the progress we have made in building a much simpler, safer bank that is focused on delivering for its customers and its shareholders,” he added.
In February, the bank reported an annual profit of £752m – its first for a decade and a sharp turnaround from the £6.95bn loss seen the previous year.
(Haaretz) Following Britain’s refusal to extend his visa, the Russian-Jewish billionaire businessman Roman Abramovich is seeking Israeli citizenship. Israel’s Ministry of Immigrant Absorption claims it has no such information
Abramovich, who owns the British Chelsea Football Club, landed Thursday in Israel to finalize his aliyah, or immigration to Israel. However, a spokeswoman at Israel’s Ministry of Immigrant Absorption told Russia’s state-owned Sputnik news agency that she had no such information.
Abramovich’s British visa expired last month, according to the Israel Hayom daily. His previous visa was granted before more rigorous regulations were instituted in April 2015.
Abramovich will have to explain the source of his wealth to receive the new visa, according to reports. There is no evidence that Abramovich has done anything wrong, but the United Kingdom has scrutinized Russian businesspeople and diplomats more carefully since the poisoning of former Russian spy Sergei Skripal and his daughter Yulia in Salisbury, England, in March. Several Russian diplomats were expelled following the incident.
Abramovich missed Chelsea’s Football Association Cup final victory over Manchester United at Wembley Stadium in London on Saturday night. He has owned the team since 2003 and has been present at nearly every game, until his visa problems began, The Jerusalem Post reported.
In 2017, Forbes estimated Abramovich’s net worth at $9.1 billion, making him the 139th richest person in the world. He is Russia’s 12th richest person. Abramovich will rival Eyal Ofer as the richest man in Israel as the chairman of Ofer Global, Zodiac Group and Global Holdings has an estimated net worth of 9.1 billion as well – although he is a permanent resident of Monaco.
(BBG) Adrian Bridge’s family has sold port to Britain from Northern Portugal for over 300 years. Now, Brexit is casting a cloud over the wine that symbolizes the U.K.’s links with one of its oldest allies.
The U.K. is among the world’s biggest consumers of port — a fortified wine, mostly red and sweet, produced from Douro valley vineyards often run by families with British heritage. Last year, one of Bridge’s brands, Taylor’s Port, was awarded a royal warrant of appointment as a supplier to Queen Elizabeth II.
“We’ve seen wars, we’ve seen crisis, we’ve seen everything, and I guess we have to put Brexit into context,” said Bridge, 55. “Am I optimistic that something will be sorted out? Yes. Am I concerned? Yes.”
Reminders of port’s British links are sprinkled around the region, with names like Taylor’s, Croft and Graham’s displayed above cellars in Vila Nova de Gaia on the southern bank of the Douro.
For centuries, Britain relied on imported wine from countries like Portugal, and as it often didn’t survive the sea voyage, Portuguese wine was fortified with brandy to preserve its quality. A handful of British families moved to the area to produce and ship port home, and the U.K. remains key for them and the wider region.
British tourists flood to cities like Oporto each summer, encountering groups of children who stand on the edge of a bridge over the Douro river, asking for as little as a euro to plunge into the cold, dark water below. The 65-foot leap is a tradition that’s been passed down through generations.
“There’s a risk that business will suffer,” said Paulo Afonso, 82, who sells souvenirs in front of a port-wine lodge facing the river. “Everyone stands to lose from this situation.”
At state banquets hosted by Queen Elizabeth II, Symington Family Estates’s ports have been used for toasts, and its chief operating officer fears it might become a victim in any Brexit-inspired trade battle.
Wine “isn’t absolutely essential in peoples’ lives and its use as a weapon would have a very significant impact,” said Antonio Filipe. “It can be perfectly replaced by wines from Commonwealth countries.”
Under World Trade Organization rules, there’s little prospect of tariffs being applied to port. Still, the U.K. could apply new labeling requirements or raise taxes on alcohol as part of “retaliation” in a potentially acrimonious split with the EU, Filipe said.
Moreover, the EU protects port as it does champagne in France or parma ham in Italy — only port produced in Portugal can be labeled as port. The worry is whether it will continue to enjoy that protection in the U.K. after Brexit.
For some producers, the big worry is sterling, which has declined about 12 percent since the Brexit referendum. Just over a quarter of Adrian Bridge’s port sales go to Britain.
“For a supplier into the U.K. whose business is in euros the exchange rate is a fundamental issue,” Bridge, whose family owns the Yeatman Hotel overlooking Oporto, said. “It’s going to be tough, but I’m sure the U.K. will continue to enjoy some of the finer things in life, which include a glass of port.”
(GUA) Russian billionaire’s visa ran out weeks ago and it is unclear whether he will get a new one
Roman Abramovich’s UK visa has expired and British authorities have not yet issued him with a new one, according to Russian media reports and people who know the businessman.
The Russian oligarch and owner of Chelsea football club, who is the 13th richest person in Britain with a net worth of £9.3bn, according to the Sunday Times, held an entrepreneurial visa to the UK that expired several weeks ago. He has filed for a new visa, but has not yet been granted one, and it is not clear if or when he will be.
Abramovich was not seen at Saturday’s FA Cup final at Wembley, which ended in a 1-0 victory for Chelsea over Manchester United.
A person who knows Abramovich said he had not been denied a visa, but that it was taking longer than usual to renew and it was unclear why.
A representative for Abramovich declined to comment on the reports, calling it a personal matter.
Anglo-Russian relations have been strained since the double poisoning of the former Russian secret agent Sergei Skripal and his daughter in Salisbury in March. The UK expelled 23 Russian diplomats from the country in March, leading to a tit-for-tat expulsion by Russia later that month.
Russia shut down the activities of the British Council, which promotes cultural programmes between the two countries, and Britain’s consulate-general in St Petersburg. The prime minister, Theresa May, also said the government would look more closely at Russian investments in the UK.
The home secretary, Amber Rudd, said in March that the government would look retrospectively at Tier 1 visas, those given to applicants who want to open businesses in Britain and have at least £50,000 in investment funds, like the one Abramovich held. Nearly 700 Russians came to Britain between 2008 and 2015 on such visas.
The delay in Abramovich’s visa was first reported by the Russian news agency the Bell, which wrote on Sunday that it had expired three weeks ago and that his private Boeing 767 last travelled to London on 1 April. The report cited three people who know Abramovich.
A second person who knows him told the Guardian the report “looked correct”, but emphasised that the Russian businessman had not yet received a firm answer from British authorities.
The UK security minister Ben Wallace said: “We do not routinely comment on individual cases.”
Abramovich bought Chelsea in 2003 and has helped bankroll the club during a period of unprecedented success, including five league titles. He regularly attends the club’s matches at Wembley and was seen at previous cup finals.
Once considered Russia’s richest man, he said in a British court in 2011 that he had an extravagant lifestyle, including properties in London and France and the luxury 533ft super-yacht Eclipse.
The Russian, who does not hold UK residency, owns a £90m home in Kensington Palace Gardens, nicknamed Billionaires’ Row.
He owns Evraz, Russia’s largest steelmaker, and the metals producer Norilsk Nickel. He made his fortune in the 1990s in oil and gas in a period when state assets were privatised and sold off to a number of businessmen who made fantastic fortunes.
Abramovich sold his stake in the oil firm Sibneft to the state-controlled gas group Gazprom for £7.4bn in 2005, increasing the Kremlin’s control over the country’s energy assets.
His stake in the company became the subject of a £2bn lawsuit in a British court. Boris Berezovsky, a once-powerful businessman who lived in self-imposed exile under Putin, sued Abramovich in 2008 over claims that he was forced to sell his shares in Sibneft under the threat of violence. Berezovsky lost the case in 2012.
While Berezovsky fell foul of the Kremlin under Vladimir Putin, Abramovich has maintained good relations with the Russian government. He served as governor, and then as the chair of the legislature in the remote Russian region of Chukotka. He helped build infrastructure at the 2014 Sochi Olympics that became an important prestige project for the Kremlin.
A judge in the Berezovsky lawsuit ruling said that while Abramovich “enjoyed very good relations with Putin and others in power at the Kremlin”, he did not have enough influence to “pull the presidential strings”.
He was named on a list of Russian oligarchs supposedly linked to Putin released by the US Treasury Department earlier this year. But the list was ridiculed as a carbon copy of the Forbes list of all Russians worth more than $1bn.
(BBG) Discount rivals EasyJet Plc and Ryanair Holdings Plc are shoring up their shareholder base in continental Europe in order to safeguard their right to fly there after Brexit.
EasyJet, based in Luton, England, is holding investor roadshows in France and Germany this week and last week in a bid to increase the proportion of stock held within the European Union once Britain leaves. Ryanair, Europe’s biggest discount airline, said Monday that it will remove the voting rights of non-EU holders in the event of a so-called hard Brexit.
With less than a year to go before the U.K. is scheduled to leave the EU, terms of a post-Brexit relationship remain elusive. The slow progress of talks has forced airlines with strong ties to the U.K. to plan for contingencies, because under EU rules carriers must be more than 50 percent owned by people and institutions based in member states in order to have an operating license within the bloc.
“On balance you would think common sense will prevail,” Ryanair Chief Executive Officer Michael O’Leary said in a Bloomberg Television interview on Monday. “But the Brexit discussions have not been characterized by a lot of common sense so far.”
Ryanair, though based in Dublin, wouldn’t fulfill the EU criteria after Brexit because it has 20 percent of its shareholders in the U.K. and a large number of U.S. investors holding American depositary receipts. EasyJet’s EU ownership comes up slightly short of a majority at 49 percent once the U.K. is excluded.
“In a hard-brexit scenario we’d have to go out and restrict the voting rights of non-EU holders,” Chief Financial Officer Neil Sorahan said in a phone interview. “It’s part of our contingency plan.”
EasyJet has increased its investor activity in continental Europe over the past year to 18 months, according to a spokesman, with the focus previously having been more on the Britain and the U.S.
While the U.K. carrier says it’s confident the 50 percent requirement can be met by broadening the investor base, its articles of association would also permit the forced sale of shares where operating rights are compromised.
British Airways parent IAG SA may face similar issues, since 20 percent of its stock is held outside the EU by Qatar Airways, though CEO Willie Walsh has dismissed concerns that Brexit could affect the structure of the group, which has its head office near London Heathrow airport but is registered in Madrid.
EasyJet has already had to set up a company with a base and air operators certificate in Austria in preparation for Brexit, something that will be necessary for it to carry on flying between EU states.
Ryanair has said it may need to acquire a separate British license in order to retain a handful of domestic U.K. routes. IAG already hold licenses in Britain, Spain and Ireland.
(Bloomberg) — The pound rallied against all its Group-of-10 peers after the Telegraph reported that the U.K. will tellthe European Union that it is prepared to stay in the customs
union beyond 2021.
* GBP/USD climbed 0.4% to 1.3539. The pair was bought by fastmoney following the report, with buy-stops for short-termaccounts above 1.3530, according to an Asia-based FX trader
* The Brexit sub-committee reached a consensus that the U.K. will stay aligned to the customs union if highly complex technology needed to operate borders after Brexit is not ready,according to the newspaper report, which cited an unidentified pro-European cabinet source
* Broad weakness in the dollar also supported the pound, with
the Bloomberg Dollar Spot Index down 0.1%
* USD/JPY dropped 0.1%, snapping a 3-day gain, amid investor
caution ahead of U.S. talks with China over trade issues
** NOTE: Trump’s trade adviser Peter Navarro will take part in
talks this week with China’s top economic envoy aimed at
defusing a brewing trade war, a White House official said,
indicating a shift from earlier plans
* AUD/USD rose 0.1% to 0.7521 ahead of Australia’s April jobs
** Commonwealth Bank of Australia estimates an increase of
20,000, which should keep the unemployment rate flat at 5.5% on
an unchanged participation rate and help the Aussie to
consolidate, according to a report
* Some information comes from an FX trader familiar with the
transactions who asked not to be identified because the person
isn’t authorized to speak publicly
(BBG) Conservative tensions over Brexit erupted again on Sunday as a senior U.K. minister fueled speculation that Theresa May may be planning to revive a customs plan rejected by euroskeptic members of the government last week.
The prime minister was outnumbered at a meeting of her inner cabinet on May 2 as pro-Brexit ministers demanded a clean break from the European Union customs regime, dismissing her plea for a compromise solution. It appeared to leave May facing a possible choice between staying in the customs union or leaving without a deal. Either could see rebels the Conservative Party destroy her government.
But in a BBC interview, Business Secretary Greg Clark said that the so-called customs partnership plan floated by May remained “on the table,” and that ministers had a “much more professional, collegiate discussion” than had been suggested. His comments came amid reports that May is planning to present a tweaked version this week and urge previously skeptical ministers to back it.
Under a customs partnership, the U.K. would collect tariffs on behalf of the EU and then refund exempt businesses. Supporters say the plan would keep trade flowing and resolve the Northern Ireland border issue, but Brexit hardliners fear May will tie the U.K. too closely to the EU.
Clark disclosed that he spoke to Toyota Motor Corp. officials in the U.K. last week as he raised concerns that thousands of jobs could be at risk unless trade “frictions” are kept to a minimum after Britain leaves the EU. He also suggested that a customs transition period with the EU could be extended, as it may take until 2023 to put new customs infrastructure in place.
His comments were praised by former Home Secretary Amber Rudd, who said on Twitter that Clark was backing a Brexit that “protects existing jobs and future investment.” Carolyn Fairbairn, director general of the Confederation of British Industry, also issued a supportive statement.
But Jacob Rees-Mogg, who issued a thinly veiled warning last week that his euroskeptic group of lawmakers could pull its support from May, revived the slogan used before the 2016 referendum to attack the campaign for staying in the EU.
“This Project Fear has been so thoroughly discredited that you would have thought it would have come to an end by now,” he said on ITV’s “Peston on Sunday” show. “We trade successfully all over the world. The delays on goods coming into Southampton are tiny.”
Writing in the Sun on Sunday newspaper, days after a stronger-than-predicted Conservative performance in local-council elections, May declared her “absolute determination” to make a success of Brexit.
(BBG) The Brexit transition period will need to be extended potentially for years because any new customs regime will not be ready to come into force in time, according to senior British officials.
In what would be a politically explosive decision, the U.K. will have to stay inside the European customs union beyond the transition period’s end date of December 2020 while new border measures are developed, said two people familiar with the Brexit talks. It’s not government policy, but is being discussed by senior officials.
Conservative Party Chairman Brandon Lewis –who is also a government minister — was asked directly on BBC Radio on Friday whether the U.K. would be staying in the customs union until 2023. He didn’t deny it, saying the Cabinet would be “making some decisions on that.” Until now, the official policy has been that the U.K. will leave the EU’s customs regime at the end of 2020.
Prime Minister Theresa May is already under intense pressure over the future of Britain’s customs arrangements from rival factions within her divided Conservative Party, following a Cabinet split on Wednesday. Passionate Brexit campaigners such as Foreign Secretary Boris Johnson fear May will tie the U.K. too closely to the EU’s trade regime.
On the other side, Tories who want to keep the U.K. inside the customs union are plotting to join the opposition Labour Party to defeat May in a crucial vote on the issue that could come later this month. If she agrees to either side’s demands, May faces a backlash that could see her ousted from power.
“Although May will try to somehow find a compromise that would keep the pro- and anti-EU factions of her party on board, that will be extremely difficult,” said Mujtaba Rahman, managing director at Eurasia Group. “Once again, her authority is on the wane.”
According to two people familiar with the matter, May and her divided cabinet now have two key decisions to make: first, what kind of customs deal they want with the European Union, and then what temporary measures will apply until the new system is operational.
The most obvious answer to the second question is to extend the U.K.’s transitional membership of the customs union beyond its current end dateof the end of December 2020, the people said, speaking on condition of anonymity because the matter is sensitive.
The option of extending the U.K.’s membership of the customs union is not official government policy and hasn’t been formally proposed in negotiations with the EU in Brussels. But the idea is in circulation in May’s team and it’s something she will need to address.
The U.K. government is at a critical crossroads as it seeks to decide the question of Britain’s future customs arrangements with the EU after Brexit. On Wednesday, May’s Brexit “war cabinet” of senior ministers failed to agree on what kind of customs deal to seek with the EU at a tense meeting in London.
The prime minister’s own preferred option for a tight customs “partnership” with the bloc was rejected by more than half of the ministers in the group, in a blow to her authority and a set back for the Brexit negotiations.
(BBG) The prime minister and her inner circle refer to it simply as “The SN.” To everyone else it is Theresa May’s “Brexit war cabinet,” the group of senior ministers who set the U.K.’s course out of the European Union.
These eleven Cabinet members meet regularly in closely-guarded privacy to decide the detail of Brexit policies. On Wednesday afternoon, they convene once again to address an explosive question that could blow up May’s government.
What to do about the Irish border and the future customs arrangements between the U.K. and the EU? Unless a satisfactory answer can be found soon, it could be enoughto derail the negotiations entirely, forcing Britain out of the bloc with no meaningful deal at all.
The key to understanding the dynamic in the room had been that half of them campaigned to stay in the EU during the 2016 referendum, while the other five support leave — with the premier herself having the deciding vote.
All that changed this week.
Until she resigned as home secretary on Sunday, Amber Rudd was among the loudest voices in favor of keeping close ties to the EU. She’s been replaced by Sajid Javid, who is far closer to the pro-Brexit lobby, although he did — reluctantly — campaign for Remain two years ago.
Also on the pro-EU side are Chancellor of the Exchequer Philip Hammond and Business Secretary Greg Clark — both have been keeping low profiles of late. Pro-Brexit ministers are led by Foreign Secretary Boris Johnson and Environment Secretary Michael Gove, both figureheads of the Leave campaign.
The two sides will make their cases but most of those close to the process are not expecting a final conclusion on what the new customs model should be on Wednesday. Cabinet Office Minister David Lidington told the BBC ahead of the meeting that it was simply the “first round” of a series of discussions, though some think a decision today is possible.
Whatever the SN — for strategy and negotiations — decides on customs, the method of making a decision is opaque. In the end the final say will rest with May. The system that she uses lends itself to a peculiarly British fudge.
The following account is based on observations from people familiar with the workings of the committee, who declined to be named discussing confidential processes.
First, individual cabinet ministers and their departments make their own submissions to May’s officials on the topics to be discussed. This time, David Davis’s Brexit Department and Liam Fox’s Department for International Trade sent in proposals on customs and future trade policy.
Their submissions are then collected by the Cabinet Office’s Economic and Domestic Secretariat, which fashions the various arguments into policy papers under the guidance of May’s most senior Brexit civil servants — Oliver Robbins, her senior negotiator, and Jeremy Heywood, the cabinet secretary.
Often as late as the night before the meeting, these draft policy papers are then circulated to the Cabinet ministers who are members of the subcommittee. This leaves little time for the pro and anti-Brexit factions in the group to plot their respective lines of attack before the meeting takes place.
In the past, Johnson and Gove have been discussing their options. Hammond, May and formerly Rudd would also “caucus” among themselves, preparing for the meeting beforehand, according to some accounts.
Then comes the meeting itself. May often starts by asking Robbins to set out various options, running through the papers that have been circulated. She will then initiate a discussion. Ministers express their views — often firmly.
Eventually, when the SN has reached an agreed position, it will be put before the full Cabinet for discussion and approval. At this stage, it’s unlikely to be overturned.
In the past, according to one person familiar with previous meetings, critical details were only vaguely aired in SN meetings and ultimately decided by May and her closest aides. These included the precise range of the U.K.’s divorce bill — between 35 billion pounds ($48 billion) and 39 billion pounds — and the ongoing role of the European Court of Justice.
So ultimately it came down to May herself and her inner circle. These days that means three people: chief of staff Gavin Barwell, Robbins and Heywood.
Right now, though, May is facing a battle with pro-Brexit heavyweights over which one of its two customs options the U.K. should seek to agree to with the EU. They want her to agree to a streamlined customs arrangement, in which new technology and “trusted trader” schemes minimize the need for checks on goods at the border between the U.K. and Ireland.
These ardent Brexit backers want a clean break with the EU and fear that the other option on the table — a close customs partnership — would mean the U.K. remains bound by European tariff rules forever.
Under the partnership plan, British officials would collect the EU’s tariffs on its behalf and then refund any companies whose goods are not destined for end use in one of the 27 countries in the bloc.
It’s complicated and pro-Brexit Tories think it will ultimately lead to staying in the customs union by another name. This would stop Britain doing independent free trade deals with other countries like the U.S. and the Brexit campaign would see that as a betrayal of the referendum result.
In recent days, May’s team have been trying to convince Brexit supporters to back the idea of the close partnership option. But the leading euroskeptics on the SN — Fox, Davis, Johnson and Gove — are ready to fight to stop it.
All eyes will be on how Javid responds at his debut.