For avid political readers, this week must have been manna from heaven with the publication of not one, not two, but three manifestos ahead of the UK general election on 8 June. After the brilliant/calamitous (delete as appropriate) leak of the Labour manifesto last week, we finally saw – in full – the policy platforms of the three main parties.
So, what to make of the offerings from Labour, the Lib Dems and the Tories? Labour continues to struggle with the subject of Brexit, and while there was a commitment to “fair immigration rules” for EU nationals, the Party would clearly rather talk about something else. Literally. Anything. Else.
The Lib Dems have been positioning themselves as the prospective opposition to the Tories, particularly on Brexit. And leader Tim Farron committed the Party to a second referendum, this time on the final deal negotiated by government, but with the added incentive for fervent Europhiles that a Lib Dem government would abandon Brexit altogether if the final deal wasn’t endorsed by the public. But while that might sound great for Remain voters, don’t expect it to happen any time soon. The Lib Dems are struggling to capture the public’s imagination based on the latest polling figures and have raised around £180,000 to fight the election since it was called. The Tories have raised more than £4 million. Talk about outgunned.
So, to the Tories. Probably the big Brexit-related news was the retention of a 100,000 cap on net migration – although Theresa May has committed the UK to remaining under the authority of the EU Court of Human Rights for at least five years if she’s returned to Downing Street. The retention of the migrant cap, however unrealistic it might be, is a reminder of the difficulty freedom of movement will pose in the eventual Brexit negotiations. Speaking of which…
Migration cuts? Nein!
To Berlin, and if Angela Merkel’s comments this week are anything to go by, it’s a safe bet she and the UK Prime Minister won’t be describing themselves as ‘BFFs’ anytime soon.
Speaking before the publication of the Tory manifesto, the German Chancellor left her audience in no doubt on her views regarding migration within the context of Brexit. “This is not meant maliciously, but you cannot have all of the food things and then say there’s a limit of 100,000 or 200,000 EU citizens allowed to enter the UK,” said Mrs Merkel. The Chancellor also expressed concern that anti-EU rhetoric during the election could poison future negotiations – and given some of the comments we’ve heard in the last week, it’s difficult to disagree with her assessment.
The comments are arguably Mrs Merkel’s strongest to date. She’s unlikely to have been enamoured by the Conservative manifesto and expect some tension when migration comes up at negotiations. That is when we finally get people round a negotiating table.
Taxi for Hammond? (#awkward)
Could Philip Hammond be presented with a P45 after polling day? If Mrs May’s failure to speak up on her Chancellor’s future this week is anything to go by, Mr Hammond could in the market for some boxes to clear out his office.
Speculation over his future is nothing new. Tensions between Mr Hammond and the Downing Street team have been rife for months. Calling your boss’s closest aides “economically illiterate” is a sure fire way of getting yourself taken off the Christmas card list. But when asked twice, Mrs May declined to say if Mr Hammond would be Chancellor after the election. #awkward.
Speculation over the Chancellor’s future will be watched with interest at home and abroad. Mr Hammond is a known advocate of a softer Brexit and his departure would speak volumes for the likely British stance in negotiations. He’s also spearheaded efforts to convince financial service leaders that their place is in the City, and not Paris or Frankfurt – and him turning in the key to 11 Downing Street might prompt nervousness in the Square Mile.
Ireland next, and news that JP Morgan has bought premises in Dublin capable of accommodating up to 1,000 staff in a move that will warm the hearts of Europeans glancing enviously at London’s status as a financial services powerhouse. And likely give many in London – not least Mayor Sadiq Khan – pause for thought and cause for concern.
The purchase is hardly a bolt from the blue. JP Morgan has indicated it will use existing sites in Dublin, Frankfurt and Luxembourg to anchor its European operations post-Brexit. But British policymakers and negotiations would wise to view the move with caution.
Passporting is a much-covered Brexit topic but JP’s intention to (probably) move staff out of its London HQ underlines the necessity of Britain agreeing a suitable deal for businesses as part of the negotiations. Fail, and JP Morgan won’t be last financial services leviathan to say slán to the UK.
We all know there’s going to be a bill for the UK to pay when it leaves the EU. The UK has commitments to contribute to the running of various EU initiatives and institutions. The question is how big that bill will be.
Minutes from an EU Commission meeting this week showed the concern of chief negotiator Michel Barnier that the divorce bill could torpedo negotiations altogether. The sticking point is that the larger economies in the bloc (France and Germany) are unwilling to up their contributions to cover Britain’s share. And smaller economies benefitting from EU funding are – not unsurprisingly – unwilling to take the hit in the form of smaller payments.
There’s been reams of speculation of how much the UK’s exit bill could be. Some have suggested as much as 100 billion euros. But if the cost can’t be agreed, negotiations might be a proverbial lame duck, with Britain crashing out of the EU on World Trading Organisation terms – which economists have indicated isn’t a good thing.
The divorce bill will be a major sticking point. Particularly given the Tories commitment this week to a balanced budget by 2025 (back to those manifestos again). So putting the bill of the nation’s credit card is unlikely to be an option.
For more information on the Brexit process, the key people involved and the impact of major sectors, please visit https://www.whitehouseconsulting.co.uk/project-brexit/