Brexit Bulletin: In-Between Days

  • Another fight is looming, this time on the transition period
  • Rees-Mogg says the U.K. mustn’t become a “colony” of the EU

EU Stance on Brexit Is 'Pretty Rigid,' Says Jim O'Neill

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It’s still not clear what the U.K.’s relationship with the European Union will look like after March 2019, let alone in 2021 when the country is supposed to cast aside the last remnants of EU membership altogether.

That in-between time – the transition phase, if your preference for jargon originates in Brussels; the implementation period if you parrot the British government – could have been the easy bit. But, as we’re learning with all things Brexit, nothing is the easy bit.

The EU27’s ambassadors reconvene on Thursday for another discussion about their position on the issue. Their aim is to have something to present to the British by the end of the month. When last they met, the EU27 added all sorts of extra language to their draft position, the most controversial of which was to state that the protection of rights of EU citizens should cover people moving to the U.K. until the end of the transition period at the end of 2020, rather than simply until Brexit day in March 2019.

May in Brussels last month.
Photographer: Jasper Juinen/Bloomberg

The U.K. thinks that’s not in the spirit of the agreement that Theresa May signed with the EU last month, which put in black and white that citizens would be protected until “the time of the U.K.’s withdrawal” (and let’s not forget, the U.K. originally wanted it to be much earlier). The EU points toward a line in the joint agreement stating it doesn’t “prejudge any adaptations that might be appropriate in case transitional arrangements were to be agreed.” Well, here are some adaptations.

Ask a few diplomats around Brussels and they say all the difficulty of the transition might have been avoided had the U.K. simply asked the EU to extend the two-year Article 50 deadline to cover the transition period, too. That was certainly an option on the table. But it would have meant keeping the U.K. in the EU for another two years or so (and maybe more if a trade deal wasn’t ready). That’s politically unpalatable in London, even if the rules of the transition as they stand mean that’s effectively what’s happening anyway. 

It puts Theresa May, again, in a difficult position. She’d quite like to put the transition agreement to bed as soon as possible so the two sides can get on to discussing the proper stuff: what the longer-term relationship will be. There’s so much to do before October (to give the European and British parliaments time to approve the deal) and it’s barely begun.

But the thorny political and legal issues of the transition won’t just go away. Beyond the citizens’ rights dispute, the EU’s draft position makes it clear that the arrangement “requires the U.K.’s continued participation in the customs union and single market.” Hardline euro-skeptic lawmaker Jacob Rees-Mogg, who has said that arrangement would make the U.K. a “colony” of the EU, was on Tuesday elected leader of an influential group in the British Parliament to hold the government to account on the Brexit negotiations, the Daily Telegraph reported.

Brexit Latest

Internal Conflict | Theresa May faces a cabinet split over the government’s position on EU trade talks, the Financial Times reports. Pro-EU ministers, such as Home Secretary Amber Rudd and Chancellor Philip Hammond, are becoming increasingly assertive and are pushing for the British economy to remain aligned with the bloc, the newspaper said.

Shaken, Not Stirred | May’s flagship piece of legislation was back in the House of Commons on Tuesday for its final stages in the lower chamber before it’s punted up to the House of Lords. Debate will continue on Wednesday. All the signs are that the Conservative rebels who embarrassed the premier last month still don’t like the bill in its current form, but won’t rebel because they think the Lords will change the legislation for them. “It’s not my desire to cause further stir,” the ringleader of the rebels, Dominic Grieve, said on Tuesday.

About That Bus | On a trip to Vancouver, Foreign Secretary Boris Johnson was asked about his assertion that Britain’s European contributions were more than he and others had claimed during the referendum campaign, which led to infamous slogans on buses saying the U.K. could save £350 million  a week that could be paid into the health service instead. “There is, I think, no doubt that when you look at the gross contributions by 2021, 2022, they’re rising to £438 million per week and that is the total sum over which we will take back control, in the famous phrase,” Johnson said. He has told the prime minister she must commit to spending an extra £100 million a week on the health service after Brexit if the Conservatives are to win the next election, the Daily Telegraph reports.

Good News/Bad News | Net immigration to the U.K. is likely to fall to 180,000 in 2018, the closest the government has come to meeting its longstanding target of a reduction to the “tens of thousands,” according to a forecast from the Institute of Directors. While that might be good for May’s ambitions, business doesn’t quite see it the same way. Small and medium-sized companies in particular, “will find it more difficult to recruit the people they need for our economy to prosper, resulting in a labor-market tightening,” the institute said.

Let’s Go Dutch | Dutch Finance Minister Wopke Hoekstra said EU countries that are set to suffer the most from Brexit shouldn’t also have to help plug the hole it will tear in the bloc’s budget. “A small group of countries on the west coast of Europe is hit very hard in the economy by Brexit, which applies primarily to Ireland, but also to the Netherlands, Denmark, Spain and a number of other countries,” Hoekstra said in interview with Dutch TV station RTL Z. “It cannot be the intention that those who already experience the damage of Brexit will also pay the bill.”

Ad Break | U.K. companies are keeping a tight rein on marketing budgets as they fret over Brexit, sending one indicator of the advertising industry’s health to its lowest since early 2016. The share of companies increasing ad budgets exceeded those scaling back by 8.6 percentage points in the final quarter of 2017, the Institute of Practitioners in Advertising said in its Bellwether Report on Wednesday. Although marketing budgets have expanded continuously since the end of 2012, that’s the smallest gap since the first quarter of 2016.

You’re All Heart | EU leaders kept alive the notion of the U.K. reversing its plan to leave the bloc in a sign of lingering hopes that May will call a halt to Brexit. “We, here on the continent, haven’t had a change of heart; our hearts are still open” to Britain, EU President Donald Tusk told the European Parliament.

And Finally...

Obviously the return of the blue passport isn’t enough of an attraction. Brits are increasingly looking to their roots over the Irish Sea as they seek to keep a foot in the European Union.

For the first time, the number of Irish passport applications received from England, Scotland and Wales, some 81,287, beat the 80,964 from Northern Ireland, according to Darragh O’Brien, foreign affairs spokesman for Fianna Fail, the biggest opposition party, citing a response to a parliamentary question.

Photographer: Matt Cardy/Getty Images

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