Brexit Update – A collection of recent news (25 November – 1 December 2017)

December 1, 2017

Author:


According to reports, the UK has offered a larger potential “divorce bill” to the EU which could be worth up to €50bn (£44bn). Furthermore, EU leaders are preparing to offer a two-year Brexit transition deal as early as January after negotiators said that they were close to a breakthrough over the Northern Ireland border. British officials tabled proposals this week to avoid a “hard border” in Ireland that could unblock the last remaining major obstacle to a deal. In return the EU will pledge at a summit in Brussels next month to speed up approval for a transition deal that maintains Britain’s present relationship with the EU, reassuring businesses that might otherwise begin implementing plans for a hard Brexit. Investors sold UK sovereign debt and pushed the pound to its highest level in two months on expectations of a stronger economy in the wake of the government poised to declare a divorce payment with the EU.

The European Parliament’s Committee on Constitutional Affairs has published an independent report on the UK’s withdrawal from the EU and the Good Friday Agreement. The report finds that it is possible to keep disruption to an ‘absolute minimum’. However, this is ‘entirely dependent not on technical solutions but on political will’. The report calls on both the EU and the UK to demonstrate that this will exists by the European Council in December 2017.

Lawmakers on both sides of the UK’s bitter Brexit divide criticized the government over its decision to censor dozens of studies delving into how the U.K.’s withdrawal from the European Union could affect different sections of the British economy. The House of Commons Speaker has told David Davis to appear in front of the Brexit select committee within days or face the prospect of being held in contempt of parliament. A string of opposition politicians, and some Conservatives, expressed fury that reports outlining the potential impact of Brexit on 58 sectors had been heavily edited before Davis handed them over to the committee.

European Commission plans to potentially force parts of the City of London’s prized clearing business to relocate after Brexit are getting bogged down because of governments’ reluctance to accept more centralised financial services supervision within the EU. Also, reportedly, the UK will lose all decision-making powers in EU foreign policy and defense issues after Brexit and cannot remain a member of the cross-border law enforcement agency Europol, Michel Barnier said. The U.K. will also be unable to take command of EU-led operations or lead EU battlegroups, he said, nor could it be a member of the European Defense Agency or Europol.

The UK.’s largest banks could withstand Britain crashing out of the EU, the Bank of England said, but it raised wider concerns over how trillions of dollars’ worth of derivatives contracts will be treated after Brexit. Two global pharma giants are expected to unveil a £1 billion post-Brexit boost for Theresa May with almost 1,800 high-skilled jobs planned for research hubs in London and Manchester.

The European Federation of Pharmaceutical Industries and Associations is urging the UK to safeguard patient’s medicines with a clear transition period and a future cooperation agreement after Brexit. A no-deal outcome would lead to “trade collapsing and market prices falling, resulting in job losses across the EU,” said a report commissioned by the European Livestock and Meat Traders Union. Meat products would face the highest tariffs of all industries, the group said. Britain’s car industry faces a £4.5bn bill if the UK leaves the EU without a trade deal, according to latest estimates from the Society of Motor Manufacturers and Traders. Around 30 insurers, including the Lloyd’s of London specialist insurance market, have already announced plans for an EU subsidiary in the event of a hard Brexit, as they wait for clarity on a Brexit deal.

Post-Brexit, the CMA is likely to have to take on more cases, which will be typically the larger and more complex cases previously taken on by the European Commission. The CMA will need the skills and the resources to do so, whilst also wanting to preserve, so far as possible, the benefits of productive exchanges of information that currently exist between the CMA and the Commission, and between the CMA and national competition authorities of EU Member states. The CMA also seeks an orderly transition so that international enforcement cases affecting UK consumers are properly dealt during the move to new arrangements.

Survey by Elsevier and Ipsos MORI reveals that securing funding and continued freedom of movement are high on academics’ wish lists. The study found that researchers expect Brexit to have a negative impact on the research sector, it also highlights their support for strategies to maintain a vibrant UK/EU research environment in a post-Brexit UK. According to another survey, the number of new office developments in London is falling as higher construction costs and uncertainty over Brexit lead builders to delay new schemes.

 

Important Dates Ahead

  • October-December 2017: divorce principles should be agreed
  • December 2017: prospective N Ireland deal to be struck
  • December 2017: EU Council meeting to re-assess the progress of the Brexit negotiations and whether second stage of negotiations can commence
  • October 2018: Bernier’s deadline to agree exit deal and ratification process should begin
  • 29 March 2019: Brexit negotiations end and UK formally exits the EU
  • 30 March 2019 – December 2020: Transitional Period (TBC)