Tuesday, November 21, 2017

Brexit weekly briefing: kicking and screaming toward the cheque book

EU Referendum Morning Briefing

Brexit weekly briefing: kicking and screaming toward the cheque book

As the UK appears to be considering caving in to demands for a bigger divorce bill, the rest of the EU is bracing for the worst of exits

Theresa May attends a summit in Gothenburg, Sweden, last Friday.
Theresa May attends a summit in Gothenburg, Sweden, last Friday. Photograph: IBL/Rex/Shutterstock

Dan Roberts Brexit editor


Welcome to the Guardian's weekly Brexit briefing, a summary of developments as the UK heads towards the EU door marked "exit". If you would like to receive it as a weekly early-morning email, please sign up here.

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The big picture

Money, money, money. Like all good Europop, Brexit was always going to simplify down to one key theme eventually and this was the week that the financial settlement finally got the attention in London it has long deserved.

The first clue that Theresa May was close to caving in over the divorce bill came on Wednesday when she met Manfred Weber, leader of the Europe's centre-right MEPs. Normally a man who is deeply sceptical of British efforts to flout the European rule book, Weber emerged from an afternoon meeting in distinctly chipper mood, telling journalists he was now much more confident of a deal.

Confirmation, of sorts, that change was in the air also came from German quarters when David Davis fobbed off questions after a speech in Berlin about when Britain would increase its offer. "Wait for another few weeks before I answer that," said the Brexit secretary, leaving little room for doubt that a revision was in the offing.

Then there was the usual round of counter-briefing in the Sunday newspapers, in which sceptics Boris Johnson and Michael Gove were reported to be ready to pay the extra money so long as the prime minister was ready to talk about what she may get for it. Tim Shipman in the Sunday Times reports:

Johnson and Gove were called in last week for talks … in the hope they would approve the offer, which May wants to make on the eve of a summit in Brussels next month so it is judged 'sufficient progress' has been made to kickstart talks. But both think Britain should resist handing over more money until the cabinet has had a proper discussion about the UK's desired 'end state' after Brexit.

A crunch meeting later this week with EU council president, Donald Tusk, should provide some more clarity about how much we are now prepared to pay.

The view from Europe

The mood on the continent has become less, not more, emollient as Britain is dragged kicking and screaming toward its cheque book. Some may wonder whether the canny bureaucrats are simply moving the goalposts, others may wonder whether the political cost of Brexit is now so high for May that there are hopes of a British rethink. Either way, the EU seems determined to point out that Britain still can't have everything it wants.

On Thursday, a leaked internal discussion paper prepared by the European commission spelt out how the British government's rejection of membership of the single market and the customs union leaves the member states with little wriggle room in trade talks.

On Monday, Michel Barnier, the EU chief negotiator, joined in with a speech to the Centre for European Reform on Monday in Brussels in which he made clear Britain would not be allowed to smuggle American neoliberalism into the EU:

The UK has chosen to leave the EU. Does it want to stay close to the European model or does it want to gradually move away from it? The UK's reply to this question will be important and even decisive because it will shape the discussion on our future partnership and shape also the conditions for ratification of that partnership in many national parliaments and obviously in the European parliament. I do not say this to create problems but to avoid problems.

All the while, everyone is bracing for the worst. The EU should prepare for a chaotic and disorderly Brexit, said the Dutch parliament's European affair committee in a strongly worded report that blamed the stalled exit talks on Britain's "unrealistic expectations" and "inconsistency".

Meanwhile, back in Westminster

The convoluted and painstaking progress of the government's EU withdrawal bill, which seeks to transfer European statute and regulation into British law, has dominated much of the Westminster political bandwidth this week.

With the tabled amendments numbering in the hundreds and the government's DUP-inflated mini-majority hugely vulnerable to rebellion, the first two days of the committee stage – when amendments are made – led to no government defeats last week.

It could change this week, however, with much focus on an amendment from the Tory former attorney general Dominic Grieve, which would see EU human rights rules remain in UK law even after Brexit. This has the support of Labour and could pass.

Another vulnerability is an amendment tabled by the government setting the precise date and time of Brexit (11pm on 29 March 2019). One of May's senior ministers hinted on Thursday the idea, which critics say reduces crucial flexibility, could be dropped. But, by Friday, No 10 was insisting it would remain.

Amid all this, some in the media have been on the warpath against Tory rebels – or "Brexit mutineers" as a Telegraph front page put it – which has lead led to threats against some of those MPs.

The other Brexit hot potato of the week is the financial settlement. May's Brexit cabinet subcommittee was meeting on Monday, amid speculation the public has been sufficiently softened up to accept a payment of £40bn or more.

All is not harmony on this, however. Robert Halfon, a senior Brexit-minded Tory backbencher, warned on Monday that the public would "go bananas" if such a sum was handed over.

You should also know ...

Honda warns about the vulnerability of British just-in-time manufacturing in the event of a hard Brexit

The British aerospace industry follows up with similar written evidence to the business select committee

The collapse of German government coalition talks could not come at a worse time for Brexit

There is no deal on offer stop a major economic hit says the government's former top trade official

David Davis warns EU not to put 'politics above prosperity' in Brexit talks

Read these:

Dutch columnist Joris Luyendijk gets angry on our behalf at the sight of leading Brexiter John Redwood urging investors to take their money out of a stagnating UK economy.

Extreme disruption is now inevitable for Britain since it can either save its economy by going for a soft Brexit, effectively ignoring the referendum result and thus doing terrible damage to its democracy. Or Britain can save its democracy by implementing a hard Brexit. This will ravage its economy. It is an absolutely awful choice that Britain has nobody to blame for but itself.

Meanwhile, the Telegraph had a man in the room to witness that David Davis speech go down like a lead balloon in Berlin.

In a speech to an elite gathering of German business leaders, Mr Davis said Brexit made it 'more important than ever that the United Kingdom and Germany work together to protect the values and interests we share'. But he was met with derision and disbelief. Heads of multibillion pound companies shook their heads and muttered angrily as Mr Davis fumbled for answers under questioning. 'This old man is destroying Britain's future,' Jürgen Müller, CEO of SIG, a leading German outsourcing company, said. 'He is being a British gentleman, lying with style,' said another businessman.

Tweet(s) of the week

It's been a bad week for those who cling to the hope that Brexit can be a win-win situation. This British diplomat in Brussels sums up why Europe sees it as more of a zero-sum game.

The fatal flaw in British thinking right from the outset has been to assume that special treatment for the UK will economically benefit the EU, whereas in fact this would present an existential threat to EU prosperity because it would undermine the Single Market.

— Chris Kendall 🇪🇺 (@ottocrat) November 17, 2017

Alternatively if you like your metaphors in visual form and from the increasingly embittered leave perspective …

pic.twitter.com/w8n2jyxDby

LEAVE.EU 🇬🇧 (@LeaveEUOfficial) November 19, 2017
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