Brexit: What now?

MPs could force a delay to Brexit of 9 months.

LONDON — Put a faint cross through March 29, 2019. Pencil in December 31, 2019.

Now that Theresa May has survived the latest attempt to drag her from office — a no-confidence vote on Wednesday evening — she will face a parliamentary ambush designed to wrestle away control of the Brexit negotiations. That could result in Britain’s withdrawal being delayed for nine months.

A lot needs to happen before then.

Here’s what.

Thursday, January 16

By defeating Labour leader Jeremy Corbyn’s attempt to force a general election through a vote of no confidence in the government, the U.K. prime minister has bought herself time.

May said she would immediately begin negotiations with the leaders of parliamentary parties to try to find a compromise Brexit that could be negotiated with the EU.

British Prime Minister Theresa May | Dan Kitwood/Getty Images

The talks will include Tory and Democratic Unionist Party MPs who want to see more safeguards built into the Irish backstop, including a cutoff date or a unilateral exit mechanism, neither of which Brussels has said it is willing to accept.

Also up will be MPs from the Labour Party who want Brexit delivered, but a softer version with closer regulatory alignment with the EU, a permanent customs union and greater environmental and labor protections.

Justice Secretary David Gauke suggested the government might be willing to offer a full customs union as the price of a deal. “At this stage we are engaging with parliamentary opinion,” he said Wednesday. “I don’t think we can today be boxing ourselves in.”

The big danger for May now is that she loses control before she can make any progress.

Monday, January 20

Under the terms of a controversial amendment put forward by Tory backbencher Dominic Grieve and forced on the government by MPs earlier this month, the prime minister must return to parliament by Monday setting out how she plans to proceed following MPs’ rejection of her Brexit deal.

This will take the form of a motion in the House of Commons, which can be amended by MPs before a vote within seven working days. May’s aides have said they plan to move to a vote “quickly,” suggesting sometime that week.

EU officials are not expecting May to visit Brussels until the end of next week at the earliest, giving her a small window of time to find a new compromise package which most MPs now expect to lean heavily toward a softer Brexit along the lines sought by Tory rebels and Labour MPs.

The January ambush

The big danger for May now is that she loses control before she can make any progress.

This starts with an amendment being drawn up by Tory MP Nick Boles, which seeks to take a no-deal off the table and empower MPs to find a compromise Brexit acceptable to a majority of the House of Commons.

The idea is to amend the “Plan B” motion May is expected to lay on January 20, not simply to propose a different type of Brexit but to change parliamentary rules — so-called Standing Orders — to allow backbench MPs to rush through new legislation in a single day ruling out no deal.

Anti-Brexit protesters demonstrate outside the Houses of Parliament on January 15, 2019 in London | Jack Taylor/Getty Images

If the amendment secures a majority, it sets aside parliamentary time for a new EU Withdrawal Bill, which will take precedence over all government business.

Boles and his allies believe this bill could become law by mid-February and he is confident it has majority support.

Three-week window

The Boles law would give the government three further weeks to secure a new deal with the EU that has majority support in the Commons. This takes the country to early March, perilously close to Brexit Day on March 29.

At this point, the liaison committee — the most senior committee of the House — would be handed the power to obtain a majority in favor of an alternative plan.

The liaison committee — made up of committee chairs and led by the anti-Brexit Tory MP Sarah Wollaston — would become the de facto government of the U.K., with the actual government becoming the real opposition in all but name. The places in the Commons would stay the same, but the power would have shifted.

EU leaders (who must agree unanimously) have indicated that they would be open to an extension in pursuit of a defined aim, but not just to prolong the Brexit uncertainty.

Under the Boles plan, the government would be compelled to implement whatever is proposed by the liaison committee if it is approved by the House of Commons and agreed by the EU.

If the liaison committee fails in this task — or refuses — the Boles law, as currently drafted, would compel the government to seek a nine-month extension of the Article 50 process. 

Brexit get-out

What if the government and the liaison committee fail to come up with an alternative plan and then the European Union rejects the application for an extension to Article 50? EU leaders (who must agree unanimously) have indicated that they would be open to an extension in pursuit of a defined aim, but not just to prolong the Brexit uncertainty. If there is no plan they might refuse.

At this point, MPs opposed to Britain’s withdrawal from the European Union want the government to unilaterally revoke Article 50, stopping Brexit in its tracks. Under the current Boles plan, the government would not be compelled to do so, though some MPs may seek to amend the plan to make this explicit.

Brussels waits for May to reach out to her opponents

EU leaders said there is room for changes if UK red lines shift.

EU to London: Talk it over and get back to us.

That’s the message from EU leaders who Tuesday night watched the Brexit deal painstakingly negotiated with Theresa May’s government go down to a crushing defeat in the House of Commons.

EU leaders in Brussels and capitals across the Continent expressed regret at the result and vowed to step up emergency planning for a no-deal scenario — something the EU is now “fearing more than ever,” according to Brexit negotiator Michel Barnier.

But the focus, according to senior EU officials, has now shifted to the sequencing laid out by May on Tuesday night in the wake of the historic defeat.

Even as Brexiteers on May’s backbenches were claiming the vote gave her a mandate for new negotiations, she pledged to begin a new dialogue with MPs across the aisle, on a plan that could win the support of the majority of the House. If that results in a softening of May’s red lines, then new possibilities might open up in Brussels.

“Brexit will do harm, to the United Kingdom, to the European Union. It is our collective responsibility to limit that harm as much as possible.” — Commission First Vice President Frans Timmermans

Assuming May survives a no confidence vote in her leadership, as she is widely expected to do, Brussels first wants to see what May can achieve.

“Only after that dialogue in the U.K. parliament about where to go from here, only after that can there be a new dialogue with Brussels,” a senior EU official said.

Open line

At the European Council summit in December, where May’s request for additional legal assurances was rebuffed, one EU official noted that the European Commission seemed to have a more open line of communication to U.K. opposition leader, Jeremy Corbyn, than she did.

For the other EU leaders, all veterans of legislative battles in their own national parliaments, that lack of communication was a clear signal that May had failed to do the necessary spade work to cobble together a majority behind the deal.

British Prime Minister Theresa May | Sean Gallup/Getty Images

The message from Dublin Wednesday was that that work can only be done in London.

“We should never forget that Brexit is a British policy that originated in Westminster,” said Leo Varadkar, the Irish prime minister. “After months of negotiation, we found a solution. That solution has now been rejected by Westminster. The problem now lies there.”

“The onus is on Westminster to come up with solutions they can support and that Europe can accept,” he added.

“The ball is in the field of our British friends,” echoed Manfred Weber, the leader of the European People’s Party group in the Parliament and the front-runner candidate for Commission president. “Please, please tell us finally: What do you want to achieve?”

But while Brussels isn’t going to offer up any concessions until the U.K. clarifies its position, the EU’s stance is not set in stone. “We have always said that if the United Kingdom were to evolve from its red lines on the customs union and the single market, that the European position could also evolve,” said Varadkar.

Wait and see

At the Commission’s daily midday briefing, Chief Spokesperson Margaritis Schinas repeated the wait-and-see mantra. “There’s nothing else we can do at this stage,” he said. And while he said the 585-page Withdrawal Agreement would not be renegotiated, there was more flexibility over the Political Declaration document. The idea was not “far from reality,” Schinas said.

Meanwhile, officials said there was no pressure whatsoever on Dublin to give any ground on the “backstop” provision on the Northern Ireland border. Speaking to MEPs, Commission First Vice President Frans Timmermans, declared the backstop “non-negotiable” — no matter that many British MPs said it was their reason for opposing ratification.

First Vice President of the European Commission Frans Timmermans | Frederick Florin/AFP via Getty Images

Timmermans led the Commission’s response at the start of a debate Wednesday morning at the plenary of the European Parliament in Strasbourg, where he warned that Brexit would be damaging whether there is a deal or not.

“Let’s not create the illusion that this could be a process without harm,” Timmermans said. “Brexit will do harm, to the United Kingdom, to the European Union. It is our collective responsibility to limit that harm as much as possible.”

He again warned MPs in London about expecting to cherry-pick EU benefits. “You can’t honestly say ‘I’m going to leave the European Union but I’m going to take with me everything I like, regardless of what that does to the European Union.’”

In closing, Timmermans turned to an oracle of political wisdom — the Rolling Stones. “You can’t always get what you want,” he said, “but if you try sometimes you might get what you need.”

This article is part of POLITICO’s premium Brexit service for professionals: Brexit Pro. To test our our expert policy coverage of the implications and next steps per industry, email pro@politico.eu for a complimentary trial.


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Michel Barnier sees high risk of no-deal Brexit

In European Parliament debate, EU officials implore Britain to decide what it wants.

The risk of a no-deal Brexit is up sharply and the EU must step up its emergency planning, the bloc’s chief negotiator, Michel Barnier, said Wednesday.

Barnier issued his stark warning in the European Parliament plenary in Strasbourg, the morning after the U.K. parliament voted overwhelmingly to reject the Withdrawal Agreement he and his team negotiated with Prime Minister Theresa May.

“We’re only 10 weeks away from the end of the month of March that is the moment chosen by the British government to become a third country,” Barnier said. “We are fearing more than ever the risk of a no deal.

“We must remain lucid and clear in our approach, which is why we are stepping up our efforts to be prepared for that possibility,” Barnier continued, adding: “We will have to speed up our efforts working with all the stakeholders and partners who will be called on to take contingency measures to face possible consequences of that outcome.”

As the European Parliament debated the outcome of the vote, other senior EU officials expressed continuing dismay at the lack of any clear path forward on the British side, and the continuing disagreement over what Britain seeks in its post-EU future.

“The ball is in the field of our British friends,” said Manfred Weber, the leader of the European People’s Party group in the Parliament and the front-runner candidate for European Commission president. “Please, please tell us finally: What do you want to achieve?”

Even as speaker after speaker implored the U.K. to clarify its goals, Barnier said that the withdrawal treaty remained the most viable solution.

“The compromise that we reached after 18 months with the British government remains today the best possible compromise,” he said. “It is the fruit of constructive work on both sides.”

Barnier, who is known for his even-keeled demeanor, insisted that he would continue to deal amicably with the British side. But he also showed a rare flash of anger and frustration over the contradictory positions of U.K. MPs who opposed the Withdrawal Agreement and the continuing lack of any Brexit plan that could win a majority on the U.K. side.

“We note by listening to the public declarations at the House of Commons that those who voted against it did it for very diverse, sometimes opposed, even contradictory motives,” he said. “This vote is therefore objectively not the clear evidence of a positive majority, which would define an alternative project to the agreement that is on the table”

Hardline Brexiteers, DUP to support Theresa May in confidence vote

The Democratic Unionist Party also says it will support the PM — for now.

Members of the Tory party’s Euroskeptic European Research Group will support Prime Minister Theresa May in a vote of confidence to be held Wednesday evening, the group’s deputy chairman said.

“We are going to vote with the government in the confidence motion,” Conservative MP Steve Baker told BBC 4’s Today program Wednesday. “We’re conservatives, we’re going to support the conservative government.”

On Tuesday, British MPs, including those in the ERG, rejected May’s Brexit deal by a record-breaking 230 votes.

The Democratic Unionist Party, which also voted against May’s deal, also said it will support the prime minister in the confidence vote. The party “never wanted a change of government, we wanted a change of policy,” DUP Brexit spokesman Sammy Wilson told the BBC. “Go back to the EU and make it clear this deal’s not going to work,” he added.

Baker said the ERG would vote in favor of a Brexit deal if the problem of the Irish border was resolved, adding that if May could do that, she “might even be remembered as the greatest prime minister we’ve had, even now.”

He added: “Everybody wants a deal.”

German minister says UK should be given more time on Brexit

There appears to be no parliamentary majority for a no-deal Brexit, Peter Altmaier says.

Berlin is signaling that London should be given more time to figure out its position after the crushing rejection of Prime Minister Theresa May’s Brexit deal by the House of Commons.

“The first conclusion I can draw from all I have seen and witnessed is that apparently there is no majority for a no-deal Brexit,” German Economy Minister Peter Altmaier told the BBC’s Today program. “This is a very important message because it would calm down markets, it would preserve jobs on both sides of the channel.”

“I have not yet seen a clear position on how to proceed further,” Altmaier said. “The U.K. should have sufficient time to clarify its position and, if needed, the European Union should allow for additional time in order to achieve a clear position by the British parliament and people.”

Asked about a potential extension of Article 50, the minister said that “we should wait until parliament has come to the conclusions, and then we should consider what we can do. When parliament needs more time, then this is something that certainly will have be considered by the European Council. Personally, I would see this as a reasonable request.”

The European Commission made it clear that there is no room for manoeuvre on the deal, Altmeier said, adding, however, that when it comes to an “acceptable approach” on how to move forward, “then of course we should all be ready to cooperate.”

German Foreign Minister Heiko Maas said it was not clear what the U.K. wanted | Alex Halada/AFP via Getty Images

The minister’s comments echoed a tweet by Germany’s foreign minister, Heiko Maas.

“In terms of things #Brexit, the ball is now in the UK’s court,” the foreign minister wrote. “It didn’t become clear yesterday what they want — just what they don’t want,” he tweeted, noting that “in Germany, we have passed two major legislative packages in order to be prepared for everything. But: We hope for reason.”

In Brussels, officials are cautious about what comes next.

The ball “has been and is still on U.K.’s side,” said one EU diplomat.

For many officials, now is the time to intensify preparations for a potential no-deal Brexit.

“I believe that it’s now up to the British government to clarify further its intentions but as the risk of a no-deal Brexit has unfortunately increased, the EU27 should also take all necessary steps to ensure that they are prepared for all eventualities as the date is approaching,” said another EU diplomat.

Some diplomats said the focus should now be on making sure the bloc’s remaining members stick together.

A third diplomat suggested the bloc should “keep calm, ensure unity among the EU27 and — if wished for — provide our British friends with the phone number of a good shrink.”


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British politics goes over a cliff

Despite the defeat of historic proportions, the prime minister’s aides intend to resuscitate the Brexit deal.

LONDON — British politics is broken. It may not be fixable in time to solve the Brexit mess.

The U.K. wakes up Wednesday with a government unable to govern — in office, but without the numbers to fulfill its central purpose: a negotiated exit from the European Union.

A defeat of previously unimaginable proportions Tuesday — 432 to 202 — has left the country adrift, floating towards no deal, with no party or faction in parliament able to command a majority for any way of moving off the course it has set for itself. The only thing MPs can agree strongly on is a desire to avoid an economically damaging no deal, but they currently can’t settle on a mechanism for how to do so.

Faced with disaster, Theresa May has a plan but no strategy — the Churchillian maxim, “Keep Buggering On.”

“KBO prime minister, KBO,” one loyal government minister urged her Tuesday in the House of Commons in the run up to the vote she knew she was going to lose. May smiled and nodded in agreement. Right now, it is all she’s got.

May’s aides are clear: She is not giving up on her deal, despite the scale of the defeat. And she’s not quitting.

The game is now an even more intense fight for survival from one day to the next in the hope that something — anything — changes, but with little hope that it will.

Britain is now entering a period of rolling, daily crises with no obvious way out, its political class unable — or unwilling — to reach a compromise way to leave the European Union. Remainers and Brexiteers alike are convinced that voting against the prime minister’s Withdrawal Agreement takes them closer to their own desired outcome.

One side is making a miscalculation of historic proportions.

No confidence

The rolling crisis kicks off with a bang Wednesday with a vote of no confidence in the government, which if successful will trigger a general election if no alternative government can be found within 14 days.

Despite shouts of “resign” from MPs Tuesday, however, May made clear she has no intention of quitting. Instead she intends to fight to stay in power. “KBO.”

Should she survive the vote, which will take place at 7 p.m. Wednesday — and every indication is that she will — May will find herself back in the same trap of her own making: a prime minister without power.

Out of the mess, however, two things did change Tuesday night, which MPs believe signal the direction of travel May now intends to take to avoid Britain leaving the European Union without a deal on March 29.

In her statement to parliament after the crushing result of the vote was announced, for the first time May formally reached out to leading opposition MPs.

“It is clear that the House does not support this deal,” May told MPs. “But tonight’s vote tells us nothing about what it does support. Nothing about how — or even if — it intends to honor the decision the British people took in a referendum parliament decided to hold.”

May said if she survived Wednesday’s attempt to force her government from power, she would work to find a compromise “genuinely negotiable” with Brussels.

In other words, unless the Brexiteers revise their expectations, May will be forced to look to Labour for compromises.

If a compromise can be found, May will take it to Brussels. In a briefing to journalists Tuesday night, May’s spokesman said the government would table a motion on its next steps on Monday next week before holding a vote on this new plan “quickly” afterwards — likely sometime that week.

The fury among MPs is that it has taken this long to reach this point.

Former No. 10 policy chief George Freeman, who reluctantly backed the deal, said the only way from here was to a softer Brexit. “Tonight the hardline Brexiteers think they have made no deal more likely, but actually what they have done is make no Brexit more likely or a much softer Brexit. You couldn’t make it up.”

However, he cast doubt on whether May was able to build a compromise deal with Labour. “The real question,” he said, was “is [Theresa May] able and really willing to reach out and do what for two and a half years she has absolutely refused to do, which is build a cross-party consensus. And will they trust her to do that?”

The second big change announced by May Tuesday is that “no deal is better than a bad deal” has all but disappeared as government policy. Instead, May told MPs voters did not vote for no deal because they had been told an agreement would be easy to reach with Brussels.

Should May survive Wednesday’s attempt to force a general election, she finds herself in a race against time to find a compromise package negotiable with Brussels.

Brussels also wants to know what might command a majority in parliament. “I want to know what kind of deal the House of Commons really wants,” the European Parliament’s Brexit coordinator Guy Verhofstadt asked.

European Commission President Jean-Claude Juncker also called for clarity. “I urge the United Kingdom to clarify its intentions as soon as possible. Time is almost up,” he said.

Donald Tusk, the European Council leader, appeared to call for Brexit to be abandoned altogether. “If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?” he said.

In Westminster, a lot more is now in play.

May’s spokesman said the prime minister could work with Labour MPs to bulk up guarantees on workers’ rights, as well as those across the House who wanted to find a way to rule out no deal.

“We want to leave with a deal and will work with others who share that,” the spokesman said.

Behind the scenes, the government is weighing even more radical options. One idea floated by an influential government minister was to offer MPs a free vote — freeing MPs from voting on party lines. The idea is to bust open the party-political system to allow Labour MPs to back the deal. The Tory minister who spoke to POLITICO said Labour would feel compelled to follow the Tories if they gave their MPs a free vote, though Corbyn may have other ideas.

Despite the conciliatory tone, May’s advisers said the “principles” behind the government’s negotiating strategy would not be bargained away. The government wants to avoid no deal, while also guaranteeing an independent trade policy and U.K. control over its “money, borders and laws.”

May’s aides also said she was still determined to leave on March 29.

Talks with opposition MPs will begin Thursday, the aides said.

A motion will then be tabled Monday setting out the government’s next steps. This motion will be amendable, giving MPs the chance to test out alternative options, from a second referendum, super-soft “Norway”-style exit or a permanent customs union. Right now, none appears to have majority support in the House of Commons.

Despite the scale of the defeat Tuesday — which Labour said had left the proposed exit deal “dead” — May and her most senior Cabinet colleagues and advisers appear to believe it can be resuscitated.

In the House of Commons before the vote, Attorney General Geoffrey Cox told MPs: “This Withdrawal Agreement will have to return in much the same form, with much the same content. Therefore, there is no serious or credible objection that has been advanced by any party to the Withdrawal Agreement.”

May wrapped up her remarks after the defeat with a promise to voters that she had not given up. “The government has heard what the House has said tonight, but I ask members on all sides of the House to listen to the British people, who want this issue settled, and to work with the government to do just that.”

In other words: May is buggering on.

The Government must force the EU back to the negotiating table while preparing for a WTO Brexit

Last night’s votes in the House of Commons sent a clear message to the Government that it must get on with delivering Brexit. Preparing for Brexit by getting the country ready for a departure on WTO terms also presents an opportunity to force the EU back to the negotiating table to get a better deal […]

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Last night’s votes in the House of Commons sent a clear message to the Government that it must get on with delivering Brexit. Preparing for Brexit by getting the country ready for a departure on WTO terms also presents an opportunity to force the EU back to the negotiating table to get a better deal for Britain.

This means that as the dust settles the Government needs to swiftly dismiss those who want to use the defeat as an excuse to stop Brexit and keep the UK under the thumb of Brussels. For too long they have been permitted to carry influence on the Brexit process and decision-making.

Many of those now trying to unpick Brexit voted for the referendum, stood on a manifesto to deliver Brexit, voted in favour of Article 50 and agreed to our departure from the EU on 29th March 2019. The Government must therefore move forward with new purpose and get Britain ready for our freedom from the EU on 29th March.

There are many advantages to leaving the EU on 29th March under WTO terms and with careful preparation there is nothing to fear.

First, doing so gives business and the country certainty to plan for the future as it gets rid of the years of uncertainty caused by the Withdrawal Agreement.

Second, as there will be no financial settlement, the Government will have £39 billion available to invest in the economy to address concerns about volatility and to support economic growth.

Third, we can immediately work on agreeing new trade deals with the rest of the world.

Fourth, we will have taken back control and delivered the outcome of the referendum and kept our promises to the people.

As well as leaving on these terms, we can also extend the hand of friendship to the EU to continue to cooperate in areas of mutual interest and to pursue an advanced free trade deal.

But while it is imperative the Government should fully prepare for departure under WTO terms, it is still preferable that we leave with a deal, so ministers should press for the Withdrawal Agreement to be amended. The Government should put new legal text on the table which changes the worst aspects of the Agreement to make it more acceptable.

This must include replacing the backstop with a better alternative that does not threaten the integrity of the United Kingdom and removing those elements that bind the UK into a single customs territory. With £39 billion at stake, there’s every prospect that the EU will return to the table for what should be seen as modest but important revisions.

Looking to negotiate a better deal while being fully prepared to leave on 29th March is the sensible and right course of action to take with either outcome being orderly and better than the deal that has been rejected.

The Government now has a chance to ensure we leave the EU and deliver on the promises made to the British people.

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Eurosceptic Tories react to Brexit deal defeat with proposals for A Better Deal and A Better Future

In the wake of the Government’s draft Withdrawal Agreement being overwhelmingly defeated in the House of Commons, more than twenty senior eurosceptic Conservatives have given their support to a document put together by the former Brexit minister and European Research Group Deputy Chairman, Steve Baker, seeking to set out what the Government needs to do […]

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In the wake of the Government’s draft Withdrawal Agreement being overwhelmingly defeated in the House of Commons, more than twenty senior eurosceptic Conservatives have given their support to a document put together by the former Brexit minister and European Research Group Deputy Chairman, Steve Baker, seeking to set out what the Government needs to do now.

It set outs the written ministerial statement that they believe the Prime Minister should make (as she will be required to do under Section 13 of the
European Union (Withdrawal) Act) and has the support of numerous former Cabinet ministers including David Davis, Iain Duncan Smith, Boris Johnson, David Jones, Lord Lilley, Esther McVey, Priti Patel, Owen Paterson, Dominic Raab, Theresa Villiers and John Whittingdale.

The publication, A Better Deal and A Better Future, includes a commitment to leave the European Union on schedule and as legislated for on 29th March 2019 and a proposal to work concurrently on two strands:

  1. To present the EU with a legal text of a new EU/UK trade agreement as offered by Donald Tusk on 7th March 2018
  2. To continue with all preparations to leave the EU on WTO terms on 29th March 2019

It proposes that a new Free Trade Plus agreement text should include:

  1. Replacement of the backstop, with a fully worked out Irish border protocol based on an interim FTA and Customs and Trade Facilitation Agreement.
  2. A financial settlement linked to progress towards a trade agreement.
  3. Mutually beneficial cooperation in areas such as the fight against terrorism, research, flights, data exchange etc.
  4. Leaving the Common Fisheries policy and negotiating reciprocal access.

The also propose that WTO preparations should include:

  1. Spending a part of the £39bn saved to boost economic growth.
  2. Unilaterally guaranteeing EU citizens’ rights to continue to live and work in the UK.
  3. Measures to reduce the cost of imported agri-food items.
  4. Improving domestic regulation to support competitive markets.
  5. Simultaneous discussions with US, India and China as well as rolling over EU FTAs.
  6. Seek to work multilaterally within the WTO on UK trading goals.

Among the other Tory MPs backing the proposals are Suella Braverman, Sir Bill Cash, Charlie Elphicke, Mark Francois, Marcus Fysh, Sir Bernard Jenkin, Craig Mackinlay, Jacob Rees-Mogg, Michael Tomlinson, Anne-Marie Trevelyan and Shailesh Vara.

Baker explains:

“The Commons’ rejection of the Withdrawal Agreement and Political Declaration is a great opportunity to aim for a better deal that respects the referendum result and is focused on the UK’s trading priorities. We will offer the EU a better deal and we will be ready to trade on WTO terms with the EU if they decline.

“If we leave on WTO terms, we will no longer be faced with handing over £39bn for little in return, seeing our United Kingdom broken apart or being forced to follow EU laws with no say. This document sets out a firm plan to take up the EU’s March offer of a best-in-class trade agreement respecting UK priorities, the EU’s legal order and allowing the UK to develop a truly independent trade and domestic regulatory policy.

“We have the opportunity to set our own course in the world. This is the right plan to respect the referendum result and prosper.”

You can read the full document for yourself below or by clicking here.

A-Better-Deal-and-a-Better-Future

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A Withdrawal Deal is achievable in principle and executable in practice before Brexit

In light of last night’s developments, as Parliament starts to consider what would make for an executable framework for much of the UK’s economic future, one thing has become clear: the Withdrawal Agreement must be changed – renegotiated. For that to happen, the enduring interests of each party, the UK and the EU, must be […]

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In light of last night’s developments, as Parliament starts to consider what would make for an executable framework for much of the UK’s economic future, one thing has become clear: the Withdrawal Agreement must be changed – renegotiated.

For that to happen, the enduring interests of each party, the UK and the EU, must be recalled so that a politically viable outcome can be reached. For its part, the UK seeks a deal on services which account for 80 per cent of its economy. By contrast the EU seeks a deal on goods, to protect its valuable surplus. Both parties want the benefits of as frictionless trade as possible. Beyond trade, wider collaboration is sought in certain areas, such as security.

But for the UK, the current draft Withdrawal Agreement falls short of what is needed on two key counts: sovereignty and trade.

The Agreement gives away sovereignty, leaving the UK with no say over any of its laws during a transitional period, and then no say at all over chunks of laws thereafter. Restoring constitutional sovereignty was a referendum decision and must be respected if any agreement is to take off.

For trade, the draft Withdrawal Agreement cannot work if EU interests for a quasi-customs union are prioritised along with elements of the Single Market for goods, but only warm words are offered for the UK’s interests in services, including financial services.

In the Political Declaration, which was a simultaneous but non-binding declaration of intent, the parties stated their wishes for a wide-ranging trade deal, involving mutual recognition on services and enhanced equivalence for the financial sector. Yet the current proposal to put services ‘on hold’ to be negotiated in a transitional period, would bring uncertainty and dangers for all. During that time the UK regulators would be without the powers often needed to change rules dynamically to protect taxpayers. Though such a transition period may be workable for goods, it cannot be for services. So though we see good intentions for services trade, the execution falls short.

In fact, a viable overall arrangement in skeletal form can be agreed even now without the need for the alternative of a managed no-deal. Perhaps inevitably, this reflects the EU’s typically last minute way.

How could this be achieved? The concept of Enhanced Equivalence is one which I set out in detailed legislative form in July 2017. This would provide financial businesses with what they need, enabling them to operate across Europe under one set of regulations and subject to one supervisor, replicating the status quo. It would avoid the costs of setting up duplicative regimes which are charged back to consumers, to the detriment of businesses and savings within the EU27.

Under Enhanced Equivalence, when the parties’ laws achieve equivalent outcomes, businesses can provide services in the other market under their home jurisdiction’s regulations and supervision. We already have executable text, providing for exactly that and achieving procedural certainty for the granting and withdrawal of equivalence in each financial sector. Temporary recognitions could tide the parties over for four months to finalise any details. A similar approach would work for mutual recognition in other services. The reality is that each party would be starting with not just equivalent laws, but they often move even now in a similar direction.

In practice, the EU’s artificial mantra that no trade deal can be negotiated until the UK is a third country can be circumvented for services by a mutual recognition agreement rather than a free trade agreement.

There are good reasons for the EU to agree. The eurozone needs the UK to continue to treat its member state government bonds as sovereign for regulatory purposes, ignoring a proper application of international regulatory standards and avoiding crippling costs. To assist, the UK needs full, dynamic control over all other protective regulatory levers. Enhanced Equivalence achieves just that. Also, the UK cannot be expected to agree to every other aspect of the deal so favourable to the EU unless the EU reciprocates.

The practicalities are close to the intended agreed position anyway. In financial services, the EU is already making unilateral declarations of equivalence across key areas such as cleared derivatives, allowing a continuation of current arrangements even on a hard Brexit. More declarations are likely, preserving the competitiveness of continental EU financial institutions and the ability of EU citizens to obtain access to cheap finance.

As the negotiations inch their way towards a system that can work, the UK’s whole economy must be brought to the fore.  That means services must be covered and constitutional essentials recognised. Otherwise, nobody ends up with what they want.

The post A Withdrawal Deal is achievable in principle and executable in practice before Brexit appeared first on BrexitCentral.

EU urges UK government to clarify Brexit intentions

The bloc vowed to step up no-deal preparations.

Responding swiftly to the British Parliament’s crushing rejection of the Brexit Withdrawal Agreement, the remaining EU27 countries urged the U.K. government to make clear its next steps as soon as possible.

“We regret the outcome of the vote, and urge the U.K government to clarify its intentions with respect to its next steps as soon as possible,” a spokesman for European Council President Donald Tusk said after consultations Tuesday evening with the 27 heads of state and government.

Tusk himself made a heavy hint in a tweet that the size of the defeat meant Brexit may not come about: “If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?”

“The EU27 will remain united and responsible as we have been throughout the entire process and will seek to reduce the damage caused by Brexit,” the spokesman, Preben Aamann said.

“We will continue our preparations for all outcomes, including a no-deal scenario. The risk of a disorderly exit has increased with this vote and, while we do not want this to happen, we will be prepared for it.”

“We will continue the EU’s process of ratification of the agreement reached with the U.K. government,”  Aamann said. “This agreement is and remains the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union.”

Tusk returned to Brussels to await the outcome of the U.K. Parliament vote on Tuesday from his hometown of Gdańsk, Poland where he had joined mourners of the assassinated mayor, Paweł Adamowicz, who was fatally stabbed at a charity event on Sunday.

Commission President Jean-Claude Juncker echoed Tusk’s sentiments in his own statement demanding clarity from London.

“I take note with regret of the outcome of the vote in the House of Commons this evening,” Juncker said. “On the EU side, the process of ratification of the Withdrawal Agreement continues.”

Juncker reiterated his belief that the deal was solid and the only way forward. “The Withdrawal Agreement is a fair compromise and the best possible deal. It reduces the damage caused by Brexit for citizens and businesses across Europe,” he said.

“It is the only way to ensure an orderly withdrawal of the United Kingdom from the European Union.” He added, “ I urge the United Kingdom to clarify its intentions as soon as possible. Time is almost up.”

In response to the result, the European Parliament’s Brexit coordinator Guy Verhofstadt tweeted: “The UK Parliament has said what it doesn’t want. Now is the time to find out what UK parliamentarians want. In the meantime, the rights of citizens must be safeguarded.”


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