First off, to Westminster. A busy week for the lobby correspondents with the growing behaviour scandal was made even busier when the House of Commons endorsed a Labour motion that the Government must publish 58 studies on the impact of Brexit on the UK economy and key industries. Shadow Brexit Secretary Sir Keir Starmer insisted that, at a time of “huge anxiety and uncertainty” for the country, it was crucial for the public and Parliament to have sight of the potential impact of leaving the EU. Although the Government abstained on the vote (as Tory whips have pushed their MPs to do in recent week, much to the exacerbation of Speaker John Bercow), Labour still found some expected support from Conservative Remainers, including Anna Soubry, who noted that ministers were afraid they “might prick the golden balloon of the promised land of Brexit,” and less likely allies in Conservative Brexiteers including ‘the Moggster’ himself, Jacob Rees-Mogg.
For months, the Government has refused to release the studies, citing the risk of undermining its negotiating stance with the EU. But in the wake of the Labour motion, ministers have rather bowed to the inevitable and committed to publishing the papers in what’s likely to be something of a litmus test for public confidence in the UK’s handling of Brexit. Expect some late nights in think tanks and journalists’ offices in the coming weeks, but many will recall the vivid image of David Davis and party sat across from Michel Barnier for the first time – Barnier’s side of the desk awash with paper and Davis’ gleamingly empty. Those in the Leave camp will be monitoring for pessimism in the Government’s approach. Remainers will want to know if Government assessments are as empty as Davis’ side of the desk in that much publicised photo.
Stop. The. Presses.
In a near unprecedented moment, there was something approaching agreement this week between David Davis and the EU Parliament’s Brexit Chief Guy Verhofstadt, with the Brexit Secretary committing to look at proposals for ‘associate citizenship’ that would allow British nationals to opt-in and keep their EU citizenship. Addressing MPs in the House of Commons, Mr Davis committed to considering the idea and also confirmed he’s discussed associate citizenship with Mr Verhofstadt. The concept is one already raised and supported by the EU Parliament, and Mr Verhofstadt was fulsome in his enthusiasm for the Brexit Secretary’s consideration of the plans – albeit with the addition of highlighting the need to speed up withdrawal talks, which require the two side to agree on an amount for the divorce bill.
The rights of both EU and UK citizens form a key part of discussions around future relations between the UK and the EU27. Many on both sides will have been heartened to see some common ground amidst frequently frustrating discussions and rhetoric. Perhaps there is more that unites us…
The prospect of chlorinated chicken on British supermarket shelves was thrust back into the limelight this week, and frustratingly for Theresa May (who’s hardly had the easiest of weeks), it was in the context of a rather public disagreement between two of her senior Cabinet ministers. Environment Secretary Michael Gove told the Environment Audit Select Committee this week that EU animal welfare standards banning the sale of chlorinated chicken would not be softened after Brexit, contradicting comments made by International Trade Secretary Dr Liam Fox, who said he had no objection to the product. The prospect of importing birds from the US treated with chlorine raised alarm when it was mooted earlier this year as a possible consequence of a post-Brexit trade deal with the US. But the suggestion was immediately ruled out by Mr Gove, who said in July, “All members of the Government are agreed that we are not going to dilute our high animal welfare standards or our high environmental standards in pursuit of any trade deal.” The memo had apparently not made it as far as the International Trade Department, with Dr Fox telling the International Trade Committee: “There are no health reasons why you couldn’t eat chlorinated chicken. I have no objection to the British public being sold anything that’s safe as long as they know what they’re eating.” These remarks were viewed as indigestible by Lib Dem’s Tom Brake who said, “this shows why you shouldn’t put a fox in charge of the hen house.”
The saga is a headache the PM could do without, and to an extent demonstrates the competing priorities of Cabinet ministers. Dr Fox is of course on a mission to secure lucrative post-Brexit trade arrangements, and if that means chlorinated chicken is a cost of a trade deal, then (to an extent) fine as long as it’s safe. In contrast, Michael Gove is dealing with a more domestic audience and is attempting to mollify the British consumer – so Dr Fox’s comments, despite the International Trade Secretary being a qualified healthcare practitioner, will have been distinctly unwelcome. The challenge (another one) for Theresa May will be to balance the interests across government. Trade yes, but with some conditions.
Banking on the outcome
The Bank of England has issued a new set of warnings about the economic consequences of Brexit, asserting that the UK’s departure from the EU will likely stifle productivity and considerably slow growth in the years ahead. In an Inflation Report produced soon after the Bank of England decided to raise its interest rate to 0.5% (the first rate rise in a decade), Governor Mark Carney maintained that Brexit was already having a significant impact on the UK’s economic performance and will continue to do so. Carney said that the effect of Brexit-related uncertainties, including the subdued outlook for business investment, is likely to weigh further on productivity growth in coming years. Carney rejected claims that he is an “enemy of Brexit” as Jacob Rees-Mogg suggested last week, declaring that the Bank of England is committed to “making Brexit a success.” In the third quarter of 2017, the UK economy grew by 0.4 per cent, which was higher than the 0.3 per cent recorded in the second quarter, but below the 0.6 per cent growth seen across the eurozone.
The BoE’s warnings were accompanied by analysis suggesting the financial services sector – a cornerstone of the UK economy – could lose a minimum of 75,000 jobs as a consequence of Brexit. Sceptics will point out that financial services employs more than a million people in the UK. But the warning underlines again the importance of the sector, with suggestions that some heavyweight firms could consider relocating from the UK HQs – among them Goldman Sachs, who’s head (and self-proclaimed Master of Universe) Lloyd Blankfein has continued his penchant for suggestive social media posts on how much he likes Frankfurt. A critical part of the Brexit process will be convincing the City it needs to remain in the City.
Time to pay the piper?
The Electoral Commission announced this week it was opening an investigation into Brexit campaigner, and former UKIP funder/supporter, Arron Banks, amidst suggestions he broke campaign finance rules in the run up to last year’s referendum.
The focus of the investigation is whether Banks was the “true source” of donations made in his name and that of one of his companies, Better for the Country, or whether both were ‘acting as an agent’ for another source, who may or may not have been allowed to fund the Leave campaign. Mr Banks, in typical style, brushed off the investigation as “so what?” But while the Electoral Commission’s eventual findings seem highly unlikely to change the UK decision to leave, they’ll be closely scrutinised in the context of campaign funding and transparency. It’s perhaps not quite Donald Trump, Russia and the US election, but one to keep an eye on nonetheless.