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"News from the Brexit Cliff Edge" 13th Feb 2019

News Highlights

Welcome to the Brexit Cliff Edge

The most striking thing in the relentless torrent of Brexit news is how the media is beginning to highlight the potential for business fall out stemming directly from Brexit uncertainty.

The newsletter covers stories relating to the car manufacturing industry, international road hauliers, Welsh fishermen, as well as, more upbeat ones about how port owners may increase capacity and step into the breach.

And as you might expect, any reader of this newsletter will almost certainly get the sense of growing business chaos coming from the mounting political uncertainty.

Economic Impact
Brexit delivers a shuddering blow to UK economic data
With four consecutive quarters of declining business investment, 2018 recording the lowest annual growth rate of the economy since the financial crisis of 2009 and a slump in output last December of 0.4 per cent, the effects of Brexit were stamped all over the national accounts data published by the Office for National Statistics. Economists have been calculating the Brexit effect on the economy for more than a year and most agree that it has cost Britain between 1.5 per cent and 2.5 per cent of gross domestic product.
Brexit: Mark Carney warns of no-deal 'economic shock'
Bank of England governor Mark Carney has urged MPs to solve the Brexit impasse in a speech warning of growing threats to the global economy. He said a no-deal Brexit would create an "economic shock" at a time when China's economy is slowing and trade tensions are rising. "It is in the interests of everyone, arguably everywhere" that a Brexit solution is found, he said.
How the economic cost of Brexit is being hidden from Leave voters
One of the reasons Brexit can happen is that its economic costs are not immediately visible. It is experienced but not isolated as a Brexit effect. It can be estimated to a reasonable degree of accuracy by experts, but the Brexit press keeps going on about the pre-referendum Treasury forecast and the broadcast media prefers a quiet life to routinely quoting these expert assessments. Brexit is not about the economy only because Leave voters are being kept in the dark about the impact Brexit is already having.
Flirting with Armageddon: That's what hard Brexiteers and the EU are doing
Out in the real world of business, of balance sheets, profits and jobs, there is despair at the political impasse as the clock counts down to March 29 and the threat of the UK crashing out of the EU looms ever larger. Some are unconcerned. Jacob Rees-Mogg and his hardcore Brexit cronies in the European Research Group (ERG) relish the prospect of No Deal. They place their own ideological purity above the economy, or the worries of business. If the economy is trashed in the process, well it's a price worth paying.
Brexit: Government immigration plans to cost employers more than £1bn after UK leaves EU
The government’s new immigration plans will cost employers more than £1bn, according to a new report. Global Future, an independent think tank advocating “an open and vibrant Britain”, arguges the flagship proposals will also impose an £80m barrier to EU students, and the proposed “settled status scheme” post-Brexit “exactly mirrors the makings of last year’s Windrush scandal – but on a much larger scale”. The analysis goes on to suggest the proposed £30,000 salary threshold for skilled workers would “leave over 100,000 unfilled jobs in social care and nursing, and cause the total EU workforce to shrink by 2025 – making it very difficult for businesses to survive and expand”.
Hammond's Brexit 'deal dividend' not credible, MPs say
MPs have dismissed the chancellor's forecast of a Brexit "deal dividend" of lower taxes and higher spending. The Treasury Committee said it was "not credible" to describe any resultant economic boost from a Brexit deal as a "dividend". In their report on the 2018 Budget, MPs said what was being talked about was "avoiding something really very bad". They also said the government's aim of eliminating the budget deficit had "no credibility" and should be abandoned.
Administrative Fall Out
UK's carmakers face twin concerns of global upheaval and Brexit
The British car industry faces a “pivotal moment” during the next few years of potential Brexit upheaval as manufacturers decide where to invest for the next generation of vehicle production. Car manufacturers tend to invest in cycles of roughly seven years, meaning companies that started production of new models more than three years ago face imminent decisions on where to invest next.
Brexit: EU citizens’ children could lose right to stay in UK, senior MP warns
The children of EU citizens risk losing their right to stay in the UK after Brexit because of flaws in the application system, a senior MP has warned. The alarm has been raised over youngsters who – in a repeat of the Windrush scandal – do not apply for the new settled status, perhaps because their parents believe them to be British. Campaigners giving evidence to the Commons Home Affairs Committee told MPs of “a real concern” that there are no “safeguards in place”.
Chief Medical Officer Admits We May Not Be Able To Get Medicine After No-Deal Brexit
England's Chief Medical Officer has told LBC she is concerned that a no-deal Brexit could mean the NHS cannot get the medicine it needs to save lives. Professor Dame Sally Davies confirmed they have been stockpiling key drugs, but warned that these will only last for six weeks. Her comments reflect those of the Chief Executive of the Association of the British Pharmaceutical Industry, who said we must avoid a no-deal Brexit at all costs. Earlier this year, Mike Thompson told LBC: "Our message is, when parliamentarians come to think about the options in front of them, no-deal is something which they should avoid at all costs because of the challenges it will give everybody.
What Brexit means for Polish workers living in rural Wales
The CBI has warned a proposed post Brexit immigration policy could restrict Welsh businesses from employing overseas workers. Workers would have to earn £30,000 before firms could employ them, but the CBI says in many industries the average wage is less than that. One area of Wales which has attracted many foreign workers is Llanybydder in Carmarthenshire. Hundreds of Polish, Romanian and other EU nationals call the village and the surrounding area home. But ITV Wales has been told many are already leaving the UK, worried about the uncertainty surrounding Brexit.
The NHS is stockpiling body bags to cope with no deal Brexit
The NHS is stockpiling bodybags to cope with a no deal Brexit shortage, ministers have admitted. A letter from health minister Stephen Hammond to a fellow MP, giving assurances to one of his constituents, confirmed the macabre course of action, in a bid to offer reassurance that the NHS will continue to operate despite the disruption.
Brexit: No-deal plan for Channel Tunnel operations
Trains will be permitted to use the Channel Tunnel for three months if the UK leaves the EU without a deal, under a proposed European Commission law. The planned legislation, published on Tuesday, will give the UK and France time to renegotiate the terms under which the railway service operates. The law must be agreed by the European Parliament and EU member states. Britain leaving the EU with no deal is the default position on 29 March unless a withdrawal agreement can be approved.
How Brexit is changing the way Europe views the UK
Deborah Haynes, Sky Foreign Affairs Editor, visits and discusses Brexit with people in four European countries and ask them how their view of the UK is changing
The unanswered Brexit questions for traders
The near-paralysis in the UK parliament over Britain’s exit from the EU has kept alive the risk that the country tumbles out of the bloc without a withdrawal agreement at the end of March. Regulators responsible for capital markets spanning both the EU and the UK have been forced to step up efforts to minimise disruption in the event of a “hard” Brexit. This month they have signed agreements on data-sharing and surveillance for trading and clearing. However, brokers, banks and investors remain anxious for guidance on what will happen to some key areas of trading should Britain leave the EU on March 29 without an agreement.
That sinking feeling: Brexit threatens German bathroom connection
The Guardian interviews a number of small but successful businesses working with the continent to better understand the complications they are facing due to the trading uncertainty of the UK government's failure to secure a Withdrawal Agreement
Driving in the EU after Brexit: from licence validity to international driving permits, everything we know
In the event of a no-deal Brexit, the current mutual recognition of driving licences between the UK and EU is expected to end. That will mean that British and Northern Irish driving licences will no longer be valid in Europe without additional documentation. It means UK visitors will need additional permits and any British expats living in Europe will need to obtain a local driving licence. Until March 29, expats can apply to exchange their GB or NI licence for one in their country of residence. After March 29, they will have to sit the driving test in that country in order to obtain a valid licence.
Bristol Port hopes to profit from a Brexit boost if no deal hits other UK ports
Bristol Port says it has put aside land to help other major UK ports in the event of disruption caused by a no-deal Brexit. The port - stretching for miles between the Bristol Channel and the M5 - covers nearly 2,500 acres - 800 acres assigned to so-called Temporary Storage Areas - some of which it says can be made available.
At least Brexit has got us talking about how public money is spent
This spring should see a government spending review, to set the shape of public services into the 2020s. But this looks like becoming another casualty of Brexit, with uncertainty around when the review will take place and what spending it will cover. How can you make a plan when the prime minister is making big spending commitments on the hoof and the economy and public revenues face meltdown?
No deal Brexit: 'Food businesses facing extinction'
Food businesses could be facing "extinction" from the impact of a no deal Brexit, the Food and Drink Federation has warned. CEO Ian Wright told Today a disruptive no deal Brexit is "the biggest threat businesses have faced since 1939".
Attitudes harden in UK’s ‘Brexit capital’
Many fear that about 4,000 jobs in the potteries would be at risk if the government reacts by unilaterally slashing import tariffs as Liam Fox, the trade minister, mooted last week, and duties are imposed on ceramics exported to the EU. For the ceramics industry, any deal — including Mrs May’s — that preserves something of existing trading relations would be preferable to that alternative.
British port operator readies plan to boost capacity after Brexit
The largest investor in British ports is ready to boost capacity quickly by 30 per cent at its Essex terminal to ease congestion at other sites should the country crash out of the EU without a trade deal. Sultan bin Sulayem, chief executive of Dubai’s DP World, said the state-owned ports operator would be able to raise volumes even further at London Gateway over time by bringing more cranes and other equipment to the fast-growing facility.
Spain's strawberry fields lie under a Brexit shadow
“Supply and demand are pretty well balanced in the market right now. A hard Brexit and a border closing could trigger an important crisis over its initial years. We could have a couple of difficult years that could even mean we have to reduce our crop hectarage a bit to adapt our supply to the demand all over again.” In other words, the surplus resulting from the closed UK market would upset the balance, drive prices down and force farmers to rethink their planting.
May's Brexit deal would mean checks on nine trucks a day – study
Warnings that Theresa May’s Brexit deal could create a border between Northern Ireland and the rest of the UK are based on a myth, according to economic analysis. The deal that MPs have rejected would keep trade between Britain and Northern Ireland flowing smoothly, with ports having to check on average just nine trucks a day, the study found.
Brexit fishing law a 'missed opportunity' for Wales
The Welsh Government said: "The Fisheries Bill is not the mechanism to take forward detailed negotiations between UK administrations, or between the UK and the European Union, on issues such as quota share. "We continue to press the case around quota shares with the other UK administrations as part of separate discussions." The department for environment, food and rural affairs said: "It is simply not true to say the Fisheries Bill doesn't deliver for the Welsh fishing industry. The bill creates more powers than ever before for the Welsh Government and the National Assembly for Wales.
Brexit immigration rules 'threat to Northern Ireland'
Proposed immigration rules after Brexit "risk causing significant harm" to NI businesses, the Confederation of British Industry (CBI) has said. The government is currently consulting on a minimum salary requirement of £30,000 for foreign workers seeking five-year visas. The CBI said firms could face "severe difficulties" getting staff. Some sectors in NI are heavily dependant on workers from Europe, such as food and drink manufacturing. The average private sector wage in Northern Ireland is £22,000 and the CBI said 71% of all workers in the region earn below £30,000.
Welsh sheep farmers fear post-Brexit British branding
Farmers and food producers in Wales may suffer after Brexit if their lamb and beef is marketed under the union flag rather than with specific Welsh branding, industry chiefs have said. The body that markets Welsh lamb and beef has expressed concern that in some parts of the world UK red meat is viewed negatively. It is keen to make sure that after Britain leaves the EU there will be a clear way to differentiate between Welsh red meat and the UK-wide product.
Could we see the economic impact of a no-deal Brexit much sooner than we think?
The Business Secretary, Greg Clark, warned last week that the real Brexit deadline for some exports is not 29 March but 15 February. This is because it takes six weeks to ship cars from the UK to Japan. If the UK crashes out of the European Union with no deal on 29 March it will also lose the coverage of the new Japan-EU trade deal, which means zero tariffs on cars sent between the two markets.
Why Brexit scares Airbus and BMW: Lines of trucks at the EU border
A disorderly Brexit would cause customs checks at the UK border and disrupt the finely tuned manufacturing system. The companies have warned of immediate damage to their supply chains, while new trade barriers and higher costs after March 29 could eventually force manufacturers to rethink their business in the United Kingdom. "[The] worst case scenario would be just blockades, vehicles parked up because we don't know what's going on," said David Zaccheo, operations director at Alcaline. "It's difficult for me to obviously comment on that because we're not sure ourselves what's gonna happen."
Brexit could delay upgrades to Island Line Trains – SWR growing increasingly concerned
Delays to upgrading Island Line trains could be being caused by Brexit — with the government refusing to approve plans until the end of the financial year. An improvement plan for the Island’s oldest trains was put before the Department for Transport (DfT) at the end of May 2018 — as part of the franchise agreement the DfT must approve the plans before South Western Railway (SWR) can invest in the new stock.
Political Shenanigans
Here's the moral case for a second Brexit referendum
Given the complexity of the issue and the impasse on the Withdrawal Agreement in Westminster, a second referendum is a political necessity. Furthermore, a second referendum is a moral requirement. A second referendum would not mark the end of democracy in the UK as we know it, and the prospect of anarchic violence post-referendum is nothing more than empty rhetoric and shameless fear-mongering.
Brexit news latest: Theresa May would win working majority in snap general election, poll finds
Theresa May would win a working majority if a general election were held today but the Tories would only gain four seats, a new poll has found. YouGov modelling for The Times, which correctly predicted a hung parliament, suggests that Jeremy Corbyn’s Labour would lose 12 seats and the Tories would gain four.
'It's never too late,' Luxembourg minister says on possible Brexit deal
"I have seen many negotiations, yes, but this one is such a wide one that you cannot strike a deal by changing a number, a percentage or adding a sentence. This is so wide that it took many months, in fact two years to negotiate, and there are so many different topics, so that's why we needed something that encompasses the whole relationship and that's why a last-minute agreement cannot fix it all," Luxembourg Finance Minister Pierre Gramegna said.
If we're heading for a no-deal Brexit, why is the Government not acting now?
it now looks as if the Prime Minister yet again wants to postpone a showdown and seek another fortnight’s grace in the hope of securing changes able to get her deal over the line. If by February 27 she cannot bring a renegotiated agreement before Parliament for a so-called meaningful vote then she promises to let the House debate an amendable motion that would allow all the various alternatives to be voted on.
UK calls on former EU chief to help break Brexit deadlock
A source told Sky News that Mr Van Rompuy was invited to attend the dinner because he is seen as an "influencer" with the potential capability to seek out a compromise between the two sides. Mr Van Rompuy was at the helm in the European Council throughout the Greek financial crisis, which threatened the stability of the euro. Greece was finally bailed out in a compromise deal overseen by Mr Van Rompuy.
Brexit: Theresa May promises meaningful vote after more talks with EU
Theresa May has promised MPs a final, decisive vote on her Brexit deal with the EU - but not until she has secured changes to the Irish backstop clause. The PM said she needed "some time" to get the changes she believes MPs want. She promised to update MPs again on 26 February and, if she had not got a new deal by then, to give them a say on the next steps in non-binding votes. Jeremy Corbyn accused her of "running down the clock" in an effort to "blackmail" MPs into backing her deal.
There’s a big problem with Theresa May’s plan to pass her Brexit deal
May doesn’t want to embrace membership of a customs union with the European Union because that would split her party. What she is aiming for instead is to pass a Brexit deal primarily with Conservative and DUP votes, with Labour votes making up the difference. The problem is that the Prime Minister is fishing in a very, very small pool. Just 20 Labour MPs have voted against the Labour whip to make Brexit harder than official party policy, and a further nine have abstained on vital votes. Taken together that gets you to 29 votes, including a number of sitting shadow ministers.
Theresa May tells MPs she’s still seeking backstop changes
Theresa May is still seeking "legally binding changes" to the Irish backstop and these "can be achieved by reopening the Withdrawal Agreement," she told MPs. Despite the EU's firm rejection of any changes to the legally binding draft agreement, as communicated to May during meetings in Brussels last week, the U.K. prime minister said talks are "at a crucial stage."
PM calls on MPs to 'hold their nerve' on Brexit
Addressing the House of Commons a fortnight after MPs voted for her to go back to Brussels and replace the controversial Irish border backstop, Mrs May acknowledged that she would need "some time" to hold talks with the EU. Mrs May pledged to return to Parliament on February 26, if no deal has been secured before that time, to report back on progress and trigger a further MPs' vote the following day.
Ian Blackford calls Theresa May a 'liar' in the House of Commons
Blackford was angry that the prime minister had claimed an economic analysis of her Brexit proposals put forward had been published - and the claim she wanted her Brexit deal done and dusted by hristmas - despite pulling the vote. Blackford, in his main response to May’s statement, said: “Sometimes I think the prime minister must live in a parallel universe. “We’ve just heard from the prime minister that she wanted this concluded in December. Talk about rewriting history. “It was the prime minister that denied us the right to have the meaningful vote and to try and rewrite history, and she sits there laughing, sometimes you should be honest with yourself, never mind being honest with the people of the United Kingdom.” He added May is “lost in a Brexit fantasy”, adding: “We’re 45 days from Scotland being dragged out of the European Union against our will - 45 days from economic catastrophe.”
A united Ireland now looks like an increasing possibility
According to recent polls, 86 per cent of people surveyed in the Republic preferred a united Ireland to a hard border and 62 per cent of people in Northern Ireland believe that Brexit makes a united Ireland more likely. Reunification would mean Northern Ireland automatically remains in the EU. A united Ireland was always “the solution that dare not speak its name,” says Margaret Urwin, author of A State in Denial, a book about the British government’s collaboration with loyalist paramilitaries. But speaking about reunification used to lead to accusations of supporting the IRA. “It’s a breath of fresh air now people feel able to mention it,” she tells me.
MPs reveal two new plans to stop no-deal Brexit
Two proposals were published after the prime minister urged MPs to give her more time to renegotiate an agreement with Brussels, but faced claims she is running down the clock. Jeremy Corbyn is leading the Labour frontbench bid to force a vote on the EU divorce deal itself or let MPs come up with their own plans to change the course of Brexit. From the backbenches, Yvette Cooper has teamed up with Labour colleagues and Tory rebels to try to give MPs a separate vote a fortnight before Brexit day on 29 March.
Theresa May running down the clock on Brexit, Starmer says
The British Labour Party’s Brexit spokesman has warned that Theresa May is “running down the clock” towards Brexit and restated his party’s promise to put a second referendum “on the table.” “I’m very concerned now with 46 days to go that the prime minister appears to be just running down the clock,” he told journalists at the headquarters of the Irish Congress of Trade Unions. “Mindful as I am that the next EU summit is the 21st of March, and if she’s trying through chunks of two weeks to run the clock down, then I think parliament has to step in with a hard stop and say we’re not going to accept that.”
Exclusive: UK chief Brexit negotiator Olly Robbins warns MPs the choice is May’s deal or extension
Olly Robbins said that, in his view, he expects the choice for MPs to be either backing May’s deal or extending talks with the EU. He expects MPs in March to be presented with backing a reworked Brexit deal or a potentially significant delay to Brexit, he told colleagues last night. “The issue is whether Brussels is clear on the terms of extension,” he was overheard saying. “In the end they will probably just give us an extension.”
Political Setbacks
Brexit: Guy Verhofstadt suggests Leave campaigners could ‘end up on the guillotine’
The politicians pushing Brexit should be careful not follow in the footsteps of revolutionary leaders who “ended up on the guillotine”, the European Parliament’s Brexit chief has said. At a press conference in Strasbourg Guy Verhofstadt compared Boris Johnson and Jacob Rees-Mogg to Georges Danton and Maximilien Robespierre – leading figures in the French revolution who were ultimately executed by their former comrades. He said it was “important to remind” the senior Conservatives that their historical counterparts had ended up losing their heads.
‘Love Jez, h8 Brexit’: billboard graffiti show ire at Corbyn's stance
Anti-Brexit campaigners have turned their attention to Jeremy Corbyn by erecting a largely blank billboard in the Labour leader’s constituency that invites people to write slogans challenging his position. However on Tuesday morning, the Corbyn billboard – complete with stepladder – appeared opposite Arsenal’s Emirates stadium in north London. Young remainers quickly got to work filling it in with slogans demanding another referendum on Brexit.
Fury as failed UKIP candidate claims he was personally invited on to BBC Question Time
A failed UKIP candidate who has appeared in the BBC's Question Time audience four times has claimed he was invited on to the show. Speaking to The Times, he claimed that he was invited by the show's producer to appear in the unionist-heavy audience in Motherwell last week, in part to make up a shortage of conservative speakers. Audience members usually go through a process of applying to be on the show while answering key questions about political affiliations, voting history and if they have been on the programme before
Brexit: MPs erupt in fury as Theresa May blames THEM for crisis in 'delusional' statement
"I wanted this sorted before Christmas!" smirked the Prime Minister, who delayed a Brexit vote by an entire month, as she urged MPs to "hold our nerve" with just 45 days to go - Commons erupts in anger as she tries to blame them for the delay
Brexit: New video shows Jeremy Corbyn vowing to 'defeat' the EU before he became party leader
Jeremy Corbyn vowed to “defeat” the European Union after accusing it of supressing the British economy in a tub-thumping rally speech before he became party leader. In his speech he calls the EU a militaristic Frankenstein
Brexit: extending Article 50 would serve no purpose - FT quotes PM May
British Prime Minster Theresa May told business leaders on Tuesday that extending the Article 50 process under which the UK is meant to leave the European Union on March 29 would serve no purpose, the Financial Times reported on Tuesday. May said delaying Britain’s departure from the EU would bring no end to Brexit uncertainty or push parliament any closer to approving a withdrawal agreement, the FT report said, citing people who took part in a phone call with the prime minister.
Trade Deals/Negotiations
Forget the Brexit deal – the Political Declaration will keep us locked in a battle with the EU for decades
Overcoming the many contradictions in what is no better than a wishlist of headings for a future EU-UK partnership will take many years. The free trade agreement between Canada and the EU was first proposed 22 years before it was signed and it took seven years to negotiate. It does not cover services or the rights of Canadians to live freely in Europe or EU citizens to work or retire in Canada.
Brexit warning: Populist parties may torpedo UK trade deal after EU elections – report
According to a new report, populist parties across Europe are set to make massive gains in May’s European Parliamentary elections – and some feel they may try to sabotage a post-Brexit trade deal between the bloc and the UK. The ECFR warns many parties are planning to “destroy the European project from within”, and could also vote down any future UK-EU trade deal after Brexit
EU Funding Benefits
Northern Scotland will lose £320 million in EU funding post Brexit
Northern Scotland would have benefited from more than £320 million in European Union funding over the next eight years had the UK not voted Leave, new analysis has revealed. In all, the UK would have been entitled to approximately 13 billion euros in regional development funding for the 2021-2027 period had it remained in the EU, the Conference of Peripheral Maritime Regions (CPMR) think tank has estimated. A regional breakdown of the figures has revealed that the Highlands and Islands region would have received just over £160 million, while the north-east and east would have benefited from more than £169 million.