Brexit weekly: 5 things

January 5, 2018 10:30 am

Come in Mr Davis, your time is up

We might have just got through the festive period but, if rumours out of Brussels are true, then David Davis could be forgiven for not extending ‘goodwill to all men’ to Oliver Robbins.

It was (rather strongly) suggested over Christmas that Oliver Robbins held talks directly with Michel Barnier but with the Brexit Secretary conspicuous by his absence. Which might seem more reasonable had Mr Robbins not left Mr Davis’ Department last year for the pastures new of 10 Downing Street as Brexit Sherpa to Theresa May’s Sir Edmund Hillary. Coupled with the fact that it was the Prime Minister who led the final stage of divorce negotiations with Jean-Claude Juncker – with Mr Davis setting out the deal in Westminster – Brussels officials are increasingly of the view the Brexit Secretary is being pushed to the sidelines.

In some respects, it could all be a bit of a storm in a teacup. Mr Davis has been ‘leading’ negotiations with Michel Barnier – which means meeting for a few hours and the civil servants hammering out the detail. But there’s little doubt that the highly regarded Mr Robbins is rapidly growing in influence. The Brexit department insists Mr Davis has a key role to play in trade negotiations and (to thoroughly mix metaphors) the Brussels gossip is simply an effort to upset the applecart. But it’s worth remembering that Oliver Robbins doesn’t report in any shape or form to David Davis, but rather to Theresa May – begging the question of how Mr Davis will be able to crack on with a trade deal if there’s a super civil servant also having discussions and then reporting to the boss. 

Super Brexit Boris

New Year. A time of goals, resolutions – and if you’re Theresa May, reshuffling your Cabinet after the inauspicious resignation of your First Minister / Deputy PM in all but name.

There’s probably been more speculation about the reshuffle than there’ll ultimately be changes in the ministerial ranks. Jeremy Hunt could get promoted. Michael Gove is supposedly back in favour (who wishes they’d put a bet on that in July 2016…?!) having found a new calling as the environment whisperer. But, inevitably, it comes back to one man in particular. Yes. We need to talk about Boris.

Suggestions have swirled that Mrs May would like to shift him from the Foreign Office. Ain’t happening, say his supporters. But the rumours persist. Boris for Business Secretary? Perhaps the most intriguing is that BoJo could be moved to a bulked up Brexit delivery role. That could involve a bit of ministerial musical chairs, with Boris headed to BEIS with more responsibility for Brexit that could curb the authority of Liam Fox and David Davis (more than Oliver Robbins has already done…). Chances are it won’t happen – the Foreign Secretary is understood to be in no move to pack up his office. But, it must surely be tempting for Theresa May to stick him in a position where he has to find that £350m a week for the NHS. 

Friendly fire

We’ve got a divorce deal (or at least one with a few fudges in it). So we must be ready for trade discussion, right? Um, not so much according to an official in the know.

Now, before you assume this is Brussels hyperbole, the important bit here is that’s the opinion of the UK’s own EU Commissioner Justin King, who this week told the Evening Standard that we’re nearly there, but that the Cabinet needs to be clear about what it wants from Brexit for discussions on the future relationship with the EU27 to be a success.

In many respects, that’s like trying to figure out the Gordian Knot. A critique of the Brexit process, at least from the British side, has been that ever since Article 50 was triggered, it’s been difficult to grasp exactly what the Cabinet as a collective would like the world to look like after March 2019. Indeed, it’s fair to say there probably isn’t a collective view – and reaching one will be even harder if the sectoral analyses David Davis said existed (then didn’t) aren’t in place to fully grasp what the UK needs.

Mr King’s warning will likely disappoint Brexiteers hoping for a New Year impetus on trade discussions. But the message well worth heeding is act in haste, repent at leisure.

Passport to the Pacific

When Article 50 was triggered (almost a year ago, would you believe it?), everyone immediately looked across the Atlantic. It’ll be fine, we’ll sort out a great trading partnership with the US and it’ll all go swimmingly from there. But, of course, it may be somewhat trickier to nail down that trade deal when the head of state you’re going to be dealing is, dare we say, on the unconventional and reactionary side.

But, fear not. According to International Trade Secretary Liam Fox this week, the UK could join the Trans-Pacific Partnership. Aka. TPP. Also known as the trading relationship Trump pulled the US out of.

Apparently informal discussions have already taken place. Were the UK to eventually join what may become the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (currently being renegotiated), the UK would be the first member not to border the Pacific or South China Sea.

It’s an intriguing prospect. Involvement in TPP / CPATPP (to shorten the version currently being renegotiated) would support access to markets including Japan, Singapore and Canada to name but a few. But this is all still someway off – as Liam Fox also said, the UK needs to see what emerges from current negotiations following the US departure from TPP. But it underlines the post-Brexit UK need to look far afield for trade arrangements, particularly in emerging Pacific and Asian markets. Which may be made more important if a trade deal with the US isn’t immediately forthcoming (there’s also the question of what view a Trump administration will take of the UK jumping into a trading agreement they’ve rejected).

Oh, and just as an additional reminder of the economic importance of Brexit, the FT reported this week that the (very lucrative) asset management industry in the UK could be under threat. One to watch.

Dig for Britain

The EU Common Agricultural Policy (CAP) is/was, dependent on your view, the best thing since sliced bread or a massive waste of money.

One thing’s for sure though. It’s been fundamental for the UK agriculture sector as a form of income. And, quite understandably, farmers have been asking what if anything is coming as a replacement when we eventually leave the EU.

So, it was up to Environment Secretary Michael Gove this week to confirm that farmers will receive the same level of subsidies for five years after Brexit.

That’s a big promise, one that could cost in excess of £10 billion. The announcement will likely be welcomed by farmers, for whom it provides much-needed certainty (which would be craved by other sectors). The question is of course how the Government will meet that financial commitment and reconcile it with other demands on the public purse.

For more information about Brexit and its implications, please visit https://www.whitehouseconsulting.co.uk/project-brexit/

January 5, 2018 10:30 am

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