Brexit Aide Says U.K. Has Four Red Lines in Talks With EU

  • Focus on immigration, budget payments, lawmaking, EU courts
  • Stewart Jackson outlines case at Tory conference fringe event

Theresa May: I'll Give the Brexit Change People Voted for

An aide to Brexit Secretary David Davis gave the most specific outline yet of the “red lines” Prime Minister Theresa May’s government will set in the looming talks to leave the European Union.

Despite May saying she doesn’t intend to negotiate in public, Stewart Jackson said on Wednesday that among its terms for the negotiations the government has ruled out paying contributions to the EU budget to allow British companies access to the single market.

The government’s Brexit department, which will lead the talks, has identified four key demands on which it will not compromise, said Jackson, a lawmaker who is Davis’s parliamentary private secretary, a step below ministerial level. Along with budget payments, they are immigration, lawmaking and freedom from the jurisdiction of European judges, he told a fringe event at the Conservative Party conference in Birmingham, central England. Davis was scheduled to speak at the event but Jackson attended in his place.

“We are not in the business of developing trade policies,” Jackson said of the Brexit department. “But we are in the business of honoring the faith and trust that the British people put in us and the instruction to deliver on June 23 around the key red lines, which are: no contribution to the budget; no jurisdiction for the European Court of Justice; the end of free movement; and British laws being made in our sovereign Parliament.”

The government had no official comment on Jackson’s statement.

March Deadline

May announced this week that the government will post official notification of Britain’s intention to leave the EU by the end of March, yet businesses, investors and members of the EU’s 27 other governments complained they’re still in the dark on what the U.K. wants. While Jackson’s comments are a step forward in knowing what the government’s negotiation strategy will be, they also offer further evidence that May’s administration is moving toward a so-called hard Brexit, prioritizing immigration controls over single-market access.

In her closing speech to the Conservative conference on Wednesday, May reinforced her demand to take control over migration after Brexit, ending the current rules on free movement, although she made no mention of stopping contributions to the EU budget.

“Let’s state one thing loud and clear,” May said. “We are not leaving the European Union only to give up control of immigration all over again. And we are not leaving only to return to the jurisdiction of the European Court of Justice. That’s not going to happen.”

Merkel Reaction

British demands received a cool response in Germany on Wednesday when Chancellor Angela Merkel said she would not compromise on the EU’s migration rules. Merkel signaled the U.K. would not get “full access to the single market” without accepting the free movement of people. She also rejected May’s request to hold preparatory talks before formal negotiations begin. 

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“We won’t hold any pre-negotiations, rather we’ll just say very generally that full access to the single market is tied in and inseparable from acceptance of the four fundamental freedoms, and that includes the free movement of people,” Merkel said.

A hard Brexit has become “a meaningful risk,” Oliver Harvey, a strategist at Deutsche Bank AG, told clients in a report on Wednesday.

“Our takeaway from the conference was that May believes the threat of rebellion from hard-line euroskeptic Conservative MPs is significantly greater than from the more centrist wing of the party or a divided opposition -- the corollary being a much tougher negotiating stance,” he said.

Interim Proposal

With a timeframe of just two years to strike a deal, May’s administration is facing calls from global banks and others to reach an interim accord to allow financial services to continue to operate freely across the the bloc after Brexit. The Financial Times reported on Wednesday that ministers are considering paying a fee to the EU to allow the City of London financial district and exporters to continue trading in the single market on an interim basis.

Jackson told the gathering of about 30 delegates on the periphery of the conference that his Brexit department wants to work with financial-services companies to identify their priorities for the Brexit deal. The department is currently conducting a “forensic audit” of all the relationships between British firms and institutions and the EU in preparation for the negotiations, Jackson said.

He dismissed the “shroud waving” of some business leaders who have warned that financial-services companies will move staff out of London to other European cities to retain the ability to provide services across the bloc after Brexit. Living in fashionable parts of London is likely to be a far more attractive offer to bankers than moving to Frankfurt, he said.

‘Downtown Dusseldorf’

“They would rather live in Mayfair and Knightsbridge than in downtown Dusseldorf or Frankfurt,” he said. “The sort of people that are making these decisions are people that rather like living in London, which is the greatest city in the world.”

In her speech later in the day, May said the finance industry is not the only area of strategic importance to the economy.

Davis and his department “want to engage with people and we want to say, what are the five top areas we absolutely have to get right in the U.K. for you to continue to prosper and do well?” Jackson said. “We don’t want to impoverish our partners.”

May has announced a Great Repeal Bill, which would incorporate EU laws into British law on the day the U.K. leaves the bloc, to provide continuity and certainty to business and workers.

Jackson said that while most lawmakers in the lower House of Commons would support the plan, there is no majority in favor of the legislation among members of the unelected House of Lords, the upper chamber. The bill will need to pass both the Commons and the Lords in order to become law.

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