Brexit Bulletin: What Can By-Elections Tell Us About Brexit?
Voters in Copeland and Stoke Central take center stage today in by-elections that will have an impact beyond the borders of the two constituencies.
Both districts have traditionally elected Labour MPs but voted for Brexit, putting it firmly on the agenda during the campaigns, alongside more granular local issues. That, coupled with timing of the polls and the positions of the parties involved, mean they matter more than the average by-election, according to Bloomberg’s Robert Hutton.
The elections were triggered by two pro-EU Labour lawmakers, who opposed party leader Jeremy Corbyn, quitting Parliament for jobs outside politics. Defeats in either seat could raise more questions about Corbyn’s future. In Stoke, the city that posted the biggest “Leave” vote in June, the U.K. Independence Party senses a chance to gain a second MP.
The Conservatives are seeking a surprise win in Copeland, which would both act as an endorsement of Theresa May’s relatively new premiership, and, according to Matt Singh of Number Cruncher Politics, be the most extraordinary by-election victory since 1878.
Bookmakers have the Conservatives favored to capture Copeland but see the threat from UKIP receding in Stoke because of scrutiny over the past statements of candidate and party leader Paul Nuttall. The by-elections shaped Wednesday’s Prime Minister’s Questions session in Parliament, where Corbyn stayed away from Brexit and instead focused on quizzing May on health and social care.
One old adversary who did comment on the scale of May’s Brexit challenge yesterday was Ivan Rogers, the U.K.’s former envoy to the EU.
Rogers, who urged officials working for the U.K. in Brussels to keep challenging “muddled thinking” when he quit in January, didn’t mince his words as he laid out for the Select Committee responsible for scrutinizing Brexit policy what he saw as the key issues ahead.
The negotiations are “the biggest peacetime challenge we have ever faced,” Rogers said, while warning that, to get the right terms for a deal on commerce, May will have to pull off “the biggest free-trade agreement ever.” It would be “insane” for Britain to leave without a new trade deal, he added.
Britain is up against “a class act” in the European Commission, according to Rogers. The Commission wants first to set the terms and costs of the U.K.’s exit, before moving on to a new free-trade agreement. Britain wants parallel talks. Even agreeing on the structure of discussions themselves could delay the start of proper negotiations, perhaps until the summer, Rogers said.
Optimism among exporters is increasing as Brexit draws closer, according to the British Chambers of Commerce, citing a survey of manufacturing and services business. Both groups were increasingly confident that they will continue to improve revenues, and that profitability will increase or remain steady in the coming 12 months, the BCC said.
Today’s BCC report comes a day after final GDP figures released on Wednesday showed trade delivered its biggest boost to growth in almost six years, helping the U.K. continue to beat economists’ expectations. The weak pound helped spur a 4.1 percent increase in exports, while imports fell 0.4 percent, meaning net trade added 1.3 percentage points to growth.
That was the biggest single contributor to a 0.7 percent expansion in GDP in the fourth quarter of 2016, a touch higher than an initial estimate of 0.6 percent.
Still, even after the stronger data, questions remain over whether this new economic mix can prove sustainable. Faster inflation is expected to hit shoppers, and business uncertainty could increase once Article 50 is triggered.
- French presidential candidate Marine Le Pen, who wants France out of the euro, compared herself to Theresa May yesterday, telling TF1 television the PM is “using policies that I want to run”
- The finance industry is likely to fragment across Europe rather than focus on one location after Brexit, according to Irish central bank deputy governor Sharon Donnery
- The European Commission’s “harsh” treatment of the U.K. isn’t good for Germany, according to a member of Chancellor Angela Merkel’s parliamentary bloc
- Brexit negotiations may take longer than two years, Czech Premier Bohuslav Sobotka said
- One in three manufacturing firms plan to shift some operations out of the U.K. after Brexit, the Independent reports, citing a KPMG study
- The Institute of Directors and manufacturing lobby group EEF separately flagged the risks of a Brexit cliff-edge
- Household products supplier McBride is meeting with retail customers to discuss price increases
- British tourists could have to pay to visit Europe after Brexit as part of a U.S.-style visa waiver system, the immigration minister told MPs, according to the Telegraph
- “Currency nationalism,” or requiring clearing in the jurisdiction of the currency in which instruments are denominated, could fragment global capital markets, according to Bank of England Deputy Governor Jon Cunliffe
- Due today: latest migration figures from the ONS, and a report on the economy from the LSE Growth Commission.
University of Cambridge academics are taking steps to prevent Brexit uncertainty from prompting thousands of older expats to move back to Britain without property or pensions.
The absence of accurate information about their rights within the EU means expats could return home and add to the strains on U.K. infrastructure. The academics are therefore building a database they hope will provide fast, trustworthy advice to British citizens in EU nations throughout the negotiations.
“U.K. citizens abroad need to be empowered to make sound, informed decisions during Brexit negotiations on whether to remain in their adopted homelands or return,” Cambridge's Dr. Brendan Burchell said.
Simon Kennedy is away.