May Runs Into Brexit Pressure From Home and Abroad at G-20

Davis Vows No Brexit Delay as May Urged for Clarity
  • Abe and Obama express public doubts about departure from EU
  • UKIP’s Farage accuses May of ‘backsliding’ on immigration

Theresa May’s first summit as British prime minister gave her a taste of just how difficult it will be to satisfy voters at home and governments abroad in Brexit negotiations.

While May closed the Group of 20 meeting in Hangzhou, China, talking of Britain being a leader on global free trade, Shinzo Abe demanded more certainty for Japanese companies operating in the U.K. That followed Barack Obama reiterating that a trade pact isn’t a priority for the U.S. and reminders from Europeans that withdrawal will come at a price.

Back in London, those who led the campaign to leave the European Union criticized May’s rejection of a points-based system to curb immigration and opposition lawmakers lobbied Brexit Secretary David Davis to flesh out a plan. Meanwhile, Polish officials traveled to Britain to discuss the safety of their citizens following an increase in violence against foreigners.

The criticism from all angles marks a reality check for May as Britain’s Parliament reconvened amid signals she will face mounting demands to start outlining and defending her plans for pulling out of the EU. She reiterated there is no intention to start formal talks before next year.

‘Obviously Impatient’

“The international audience is obviously impatient and focused on the economy, but the main challenge for her domestically remains immigration,” said Carsten Nickel, an analyst for Teneo Intelligence in Brussels. “The pressure, for now, is bearable.”

May rejected the public barbs, saying there was a willingness among G-20 counterparts to discuss striking trade deals. As for determining access to the U.K. on the basis of points for qualifications and skills, she recalled how staff at London’s Heathrow Airport told her how migrants abusing student-visa rules were automatically let in because they met the criteria.

“That’s the problem with a points-based system,” May said. “I want a system where the government is able to decide who comes into the country. I think that’s what the British people want.”

In his first statement to the House of Commons since taking office, Davis said that by delivering Brexit the government “will decide on our borders, our laws and the taxpayers’ money.” He predicted Britain would remain engaged with the EU on trade, security and foreign affairs.

‘Take the Time’

While Davis said that “we’re going to take the time to get it right,” lawmakers pressed for greater clarity.

“What has happened since July? What is the plan?” asked Labour’s Brexit spokeswoman, Emily Thornberry, who said Parliament should vote on when to start the negotiations, despite May refusing to countenance that.

At the G-20 summit, May held talks with her host, Xi Jinping, under the shadow of her refusal to commit to the Hinkley Point nuclear plant, in which China plans to invest. “I have been clear that a decision about Hinkley will be taken later this month, but our relationship with China is about more than Hinkley,” May said.

The nuclear plant wasn’t raised specifically during the half-hour meeting, an official from May’s office told reporters, but Xi recognizes that the new U.K. government will need time to review decisions and has the patience to await a resolution. Xi also told May China would be open to a bilateral trade deal, and it was announced that May will visit China next year.

After his government released a 15-page paper setting out the threats to Japanese companies in Britain if exit terms are too tough, Abe told May that investment in her country is partly dependent on Britain’s access to the single market.

By the end of 2014, Japan had investments in the U.K. valued at 38 billion pounds ($51 billion) with Nissan Motor Co. and Nomura Holdings Inc. both having British operations.

“Prime Minister Abe requested her cooperation to enhance predictability and to continue to secure Japanese companies’ businesses and value chains,” Japan’s Ministry of Foreign Affairs said in a statement.

No Deal

Meanwhile, at his final G-20 summit, Obama expressed hope that international business relations don’t “unravel” because of Brexit as he again poured water on any hope of an imminent trade deal with the U.S.

Away from the G-20, Italy’s Economic Development Minister Carlo Calenda told Bloomberg Television in Cernobbio, Italy, that the U.K. needs to hurry up and decide how to exit. European Commission Vice President Valdis Dombrovskis and Austrian Chancellor Christian Kern said the U.K. would not be able to pick and choose the terms of divorce.

On the upside, Australian Prime Minister Malcolm Turnbull said his government is keen to clinch a trade accord as soon as the U.K. quits the EU. Another round of data also showed the U.K. economy rebounding from the shock of the referendum result, with a gauge of services jumping the most on record in August.

‘Serious Backsliding’

In a sign of how May will have multiple constituencies to appease, former U.K. Independence Party leader Nigel Farage accused the prime minister of “serious backsliding.”

“Her comments rejecting an Australian-style points system really worry me,” said Farage. “Those of us on the ‘Leave’ side were perfectly clear in campaigning for strong border controls outside of the EU.”

Lawmakers also held a debate on a petition, originally dating from before the Brexit vote but since signed by more than 4 million people, seeking a rerun if the majority failed to reach 60 percent or the turnout 75 percent. While neither condition was fulfilled, Parliament says Monday’s debate has no power to decide on a second vote and it’s too late to change the law retrospectively in any case.

Polish Foreign Minister Witold Waszczykowski and two colleagues traveled to Britain after a Pole was beaten to death in Harlow, north of London, on Aug. 27 and two Polish nationals were assaulted there on Sunday. Police are investigating the incidents as potential hate crimes amid an escalation of anti-foreigner sentiment following the Brexit vote.

“Are the police following procedures, increasing patrols in Polish neighborhoods and can they identify who’s threatening the Poles?” Waszczykowski said.

The three ministers were due to hold meetings Monday evening in London with U.K. Home Secretary Amber Rudd and Foreign Secretary Boris Johnson. “We recognize the valuable contribution the Polish make to Britain,” May’s spokesman, Greg Swift, told reporters.

Sign up to receive the Brexit Bulletin, a daily briefing on the biggest news related to Britain's departure from the EU.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE