Brexit weekly briefing: path to UK exit is more like an obstacle course

The past week has shown that the route towards hard Brexit will be full of political, economic and constitutional pitfalls

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The big picture

Last week provided a fair few signs that the path towards the kind of clean, hard Brexit Theresa May outlined to such a rapturous reception at the Conservative party conference will not be without pitfalls.

The obstacles – political, economic, constitutional – came thick and fast.

The one that garnered most media attention, of course, was Marmite-gate, a pricing row between Tesco and Unilever that saw the supermarket run short of supplies of Britain’s much-loved (and hated) spread and other famous household brands.

That was resolved fairly rapidly. But analysts warned it was merely a harbinger of the major price rises likely to hit British consumers in the new year as manufacturers and retailers find themselves forced to respond to sterling’s fall against both the euro and dollar, with the pound now plumbing record lows.

It is in the nature of currencies, of course, that their value fluctuates. More of a worry for the prime minister may be the stiffening parliamentary opposition to her view that MPs need not necessarily be consulted before article 50 is invoked.

After several Tory MPs threatened to vote with Labour on the question, May was forced to accept the need for “full and transparent” parliamentary scrutiny of the UK’s negotiating terms before Brexit is triggered (though she stopped short of allowing a vote).

Perhaps heartened by the government climbdown, a powerful cross-party group of MPs is now demanding it publishes a substantive outline of its plans for the UK’s future relationship with the EU – a “Brexit blueprint” – and ensure parliament can amend it before negotiations start.

That’s not the end of it. Scotland is not too happy, either, with the direction Brexit appears to be taking in the wake of the Conservative conference.

The first minister, Nicola Sturgeon, said it was “highly likely” that Edinburgh would call a second independence referendum by 2020 if Britain left the EU single market, adding that she also wanted to explore ways of keeping Scotland in the single market even if the rest of the UK left.

Nor, it seems, are some of the most important sectors of the UK economy taking the threat of a hard Brexit lying down.

After the French finance minister, Michel Sapin, said US banks were planning a post-Brexit exodus from the City, the Open Europe thinktank said some could begin moving assets out of the UK as early as the end of 2017 if no deal is in prospect to maintain their rights to sell services freely across the EU.

And the chief executive of Nissan, Carlos Ghosn, was sufficiently alarmed at the prospect of tariffs on car exports to seek a personal meeting with May, during which she assured him the company would not be penalised by Brexit (although there was no detail on how that might be achieved).

The politics of the immediate financial aftermath of Brexit, too, look somewhat delicate, with Downing Street refusing to rule out the UK having to continue paying into the EU budget after its exit and analysis suggesting a €20bn (£18bn) “Brexit divorce bill”. That is hardly likely to please hardline Brexiters.

(Separately, the government is reportedly looking into the possibility of continuing to pay billions of pounds into the EU budget after Brexit to maintain single-market access for the City and other vital sectors.)

Doubtless, however, the prime minister will be heartened by the cheering words of her foreign secretary, Boris Johnson, who told the foreign affairs select committee that:

The view from Europe

Leaders from the EU’s 28 (for the time being) member states gather at the end of the week for a European council summit in Brussels that will be May’s first. Brexit won’t be up for formal discussion – “no negotiation before notification”, as Brussels likes to say – but the PM will utter the B-word at dinner on Thursday evening.

It’s likely to be a fairly chilly affair. Donald Tusk, the council president who will chair the summit, became the latest EU leader to make clear the EU’s view of the situation, saying last week that Britain faced the stark choice of either a hard Brexit or no Brexit – the first time he has taken such a clear line.

Tusk said the leave campaign and its “take back control” slogan showed the UK wanted to be free of EU law while rejecting free movement of people and contributions to the EU budget:

Meanwhile, back in Westminster

In the ongoing tussle between government ministers over priorities for Brexit, the chancellor, Philip Hammond, is widely seen as the most economically cautious voice against ditching single market access in favour of immigration controls.

Unnamed cabinet “sources” have now started briefing against Hammond, accusing him of “arguing like an accountant” (apparently a bad thing for the man in charge of the nation’s finances).

Monday’s front pages saw similar stories in two conservative newspapers relaying the anger of more staunchly pro-leave cabinet colleagues at Hammond reportedly questioning the wisdom of a rapid post-Brexit crackdown on unskilled EU workers arriving in the UK.

Nick Sutton (@suttonnick)

Monday's Times front page:
Hammond clashes with Brexiteers on migrants#tomorrowspaperstoday #bbcpapers pic.twitter.com/WnPOVPBSvd

October 16, 2016

May’s official spokeswoman didn’t deny there had been “lively debates” within the cabinet’s Brexit committee – whose 12 members are split evenly between leavers and remainers – but described these as a necessary way to thrash out the best consensus position.

But perhaps more uncomfortable for the government is that it is, at long last, facing some effective opposition to its “no running commentary” mantra as to what Brexit might mean.

Keir Starmer, the very able former director of public prosecutions recently named Labour’s shadow Brexit secretary, has already helped produce a probing list of 170 questions for the government over Brexit, forced May into permitting a debate on the strategy for leaving the EU – and used that debate to give the government an uncomfortable time about what it is up to.

You should also know that:

• The high court began hearing a legal challenge to Theresa May’s plan to start the article 50 process of leaving the EU without a vote in parliament.
• Brexit could hit Ireland harder than Britain, according to Irish leaders, who have called an unprecedented summit amid warnings of an economic “disaster” on both sides of the border.
• The number of hate crimes leaped by 41% in the month after the Brexit referendum, Home Office statistics confirm.
• Boris Johnson said the UK’s continued membership of the EU would be a “boon for the world and for Europe” in a previously unpublished newspaper column written days before the vote.
• Eastern Europeans who work seasonally at UK farms fear for their livelihoods post-Brexit, while their employers fear a labour shortage.
• There has been a huge rise in Britons applying for Irish citizenship, with the London embassy handling more cases in a month than in the whole of 2015.
• Theresa May is to fly to India next month on a trip seen as a key test of her ability to win backing for future for post-Brexit trade deals.
• A Conservative councillor from Surrey has called for support for the UK’s membership of the EU to become a treasonable offence.

Read this:

In the Guardian, Zoe Williams says the cabinet EU hardliners are not Brexiters but dangerous political extremists who have “nothing but their confidence”:

At Politico, Paul Taylor says Britain is hurtling toward the worst of all worlds – a swift, hard Brexit on unfavourable trade terms – and the government is suffering from worrying delusions:

In the Times (paywall), after Michael Gove accused the remain campaign of “slut-shaming” the British public, Matthew Parris offered an eloquent and passionate rebuttal, arguing Britain was heading for a worse disaster than Suez:

And back at the Guardian, a Dutchman, Joris Luyendijk, subjects us to another bracing blast of European realism, observing that in practice, Brexit will mean whatever the EU, not Britain, wants:

Tweet of the Week:

The prime minister of Luxembourg neatly explains just why it is that the EU-27 are so disinclined to listen once more to Britain’s very particular demands ...

POLITICO Europe (@POLITICOEurope)

Xavier Bettel on Brexit: “Before they were in and they had many opt-outs; now they want to be out with many opt-ins” https://t.co/jBhASFoKa5

October 11, 2016