Davis: Transition Must Be Over By 2022

Yesterday Guido told you Leave Tories were willing to support the government on a so-called ‘clean Brexit with a soft-landing’, with transitional arrangements and a departure date before the next election. Today David Davis has confirmed Brexit will be complete by 2022 as “the most important thing is it’s got to be done before the election”. Consensus among Leave Tories and government…

Bloomberg: City Safe Despite Brexit

Bloomberg – a £250,000 donor to the Remain campaign remember – has declared the City of London “safe despite Brexit“. In a hugely enjoyable volte-face, the site today published a piece concluding that the City will be fine even in the event of a no deal Brexit:

“Despite Brexit, London’s place as a leading global financial center looks safe. Ever since Britain voted to leave the European Union, analysts have debated the City’s fate… Fortunately for the U.K., Brexit itself won’t erode the significant advantages London currently enjoys. Perhaps more importantly, neither will it help European rivals build up similar advantages… These conditions aren’t easily replicated… [London’s] competitive advantages are substantial — and won’t be easily eroded even by a hard Brexit.”

The article goes onto list the comparative advantages of London over alternative European financial centres, long adduced by Leavers: strong institutions, the pound, English law, the language and lifestyle. It’s a far cry from Bloomberg’s previous analysis on Brexit, the most extreme of which was the now infamous “71% of economists” survey which predicted a post-Referendum recession in 2016. Guido crowns this the King of Despite Brexit stories…

May Tells EU Citizens: “We Want You to Stay”

Leave Tories Support Time-Limited “Soft Landing” Brexit

Tory Leavers will support the government on interim Brexit arrangements lasting two or three years so long as the period is strictly time-limited and cannot be extended. Leave-supporting ministers and MPs say they back the government’s plan for a so-called “softer landing”, arguing it is both sensible and necessary to achieve a proper Brexit outside the single market and customs union. Yesterday leading Brexiter and Open Europe chairman Lord Wolfson called for a “smooth” rather than “rushed” departure process. The feeling among Tory Leavers is that the destination is the same – a clean, open Brexit – but there will be a “softer” journey to get there. 

Suella Fernandes, the new head of the influential European Research Group of 80 Leave Tory MPs, tells Guido:

“It is entirely pragmatic and sensible, as we do with other legislation, for there to be a strictly time-limited interim implementation phase, but by no means should that be read as a cover up for staying in.”

Leave MPs have two main conditions for supporting an interim arrangement. They say it is crucial the period is “time-limited” – that an irrevocable departure date is set and cannot be extended. Their fear is that without a time-limit continuity Remainers and civil servants will aim for “permanent transition” or repeated delays to ultimately keep the UK inside the EU. Leavers also want Britain fully out of the single market and customs union within two or three years, well in time for the next election. Tory MPs are concerned that the public will want to see progress on immigration and trade deals by the time they next vote. One of David Davis’ main reasons for lobbying Theresa May to call a snap election was so Brexit could be fully completed by the next election. This means an interim period of two or three years, over well in time for 2022.

The Remain media’s focus on “soft” versus “hard” Brexit has been misleading. Everyone in government including Philip Hammond agrees on a destination outside the single market and customs union. It is the journey that is interesting – Hammond and Leavers now agree on a “softer landing”, so long as the transition is short and time-limited. Expect UKIP to complain (they have to, or else they have nothing to say). But so long as Leave MPs’ conditions are met this seems to Guido a sensible approach for a smooth, real Brexit…

Shami: Labour Backs Continuing Free Movement

Shami Chakrabarti didn’t really have a grasp of the detail on Ridge but she made clear Labour would not take back control of borders and would support the continuation of free movement in some form:

“We haven’t said we’d have control of free movement of people, you can’t necessarily have control… what’s important is that jobs come first, the economy comes first and that means getting tariff-free access to the single market… There’s a lot of room for negotiation about what types of free movement, what kinds of priority… It’s possible for friendly countries in and outside Europe to give priority for certain nationals.”

Not quite what they said in their manifesto… going to alienate a lot of Labour’s working class Northern vote…

Dom Cummings’ Referendum Night Victory Speech


Complete with ceiling smash…

Brexit and The Economist’s Lack of Intelligence Unit

It is now pretty much established consensus that humbled pollsters are having great difficulty calling votes. The pundits – particularly those at the FT and The Economist – are still ever so keen to sound authoritative on Brexit when it is their house editorial line, rather than the objective study of all factors, that is so clearly what determines their analyses. The Economist has a research and analysis division which claims to be a world leader in global business intelligence – the grandly named Economist Intelligence Unit or the “EIU”. As well as offering subscribers research updates it also does consultancy for corporations who want to know what is going on in the world. The EIU says “our knowledge of economics, politics and socio-demographics is second to none. If you need to see into the future, we can help.” Using “bespoke modelling and scenario analysis” the EIU “can provide country, industry or market scenarios based on expert judgement, modelling” so, “if you need to understand how a country or industry will respond to an event… we can model that too.”  Corporations pay good money for the research and expect it to be reality-based rather than just journalists’ wishful thinking…

Guido has got hold of the EIU report for Britain dated June 28, 2016, five days after the referendum result. On politics it forecast:

  • Our baseline forecast is that Boris Johnson—the former mayor of London and one of the leaders of the “leave” campaign—will succeed David Cameron as the Conservative Party leader and prime minister… Theresa May won.
  • This process will commence with the triggering of Article 50 of the EU treaties to begin the exit process; we expect this to happen by the end of 2016. It was triggered in March 2017.
  • The Labour Party is mired in an acrimonious leadership crisis. We expect that the party’s hard-left leader, Jeremy Corbyn, will be ousted, and/or that there will be a formal split. Jezza’s not going anywhere. Labour isn’t splitting.
  • They also predict a second referendum will lead to a “jump in support for UKIP.” That remains to be seen.

On the economy EIU forecast:

  • They expected a contraction of 1% in 2017 (compared with 1.8% growth previously) as a slump in domestic demand pulls the economy into recession. UK GDP is on course to grow 1.9% in 2017. No contraction. No recession.
  • They forecast the number of those in work to fall by hundreds of thousands. More people are in work than ever…
  • They gloomily forecast a rapid deterioration in the fiscal position, falling tax revenues, increasing unemployment. None of which happened…
  • They predicted the US Federal Reserve would have to hold interest rates. The Fed raised rates.
  • The EIU predicted anxiety-driven declines in world stock markets, “When an event promises to strip 6% of GDP from the fifth-biggest economy in the world, it is harder for the rest of the global economy to grow as quickly.” Brexit “will ensure that the global economy continues to underperform its potential for at least another two years”World stock markets have rallied strongly post-Brexit.

The EIU predicted that by next year unemployment will rise by 380,000 and GDP will fall by 6% compared to the pre-June 23 baseline. The authors of these EIU reports are what the brilliant Nassim Nicholas Taleb calls “IYIs”, “Intellectual Yet Idiot” academic no-skin-in-the-game policymaking “clerks” and journalist-insiders. That class of paternalistic semi-intellectual experts with some Ivy League, Oxford-Cambridge education who enjoy telling us what to do. Academico-bureaucrats who are self-described members of the “intelligentsia” who can’t find a coconut on Coconut Island. A year after the Brexit vote the Economist Intelligence Unit has proven that it doesn’t know the right end of a stick.

EU Refuses to Accept May’s Offer on Migrant Rights

As Donald Tusk predictably criticises May’s generous offer on EU citizens’ rights this afternoon, it is once again clear that Remain ultras in Britain will side with the EU even when the UK government is being entirely reasonable. What did Remainers want? EU citizens’ rights to be guaranteed. And the government has indeed guaranteed their rights from the Article 50 trigger date, a completely fair and common sense proposal. Still the Guardian’s Brexit correspondent bizarrely calls it “disgraceful”.

Juncker wants the ECJ to continue to hold sway in Britain post-Brexit as part of any deal: “I can’t see the ECJ being excluded from the settlement in the future”. Any fair-minded pundit can see this is unacceptable – the UK voted to take back control of laws. 

Sky News, ever-more partisan for a supposedly impartial broadcaster, asked May what her mandate was for leaving the single market and customs union. Seriously? This debate has been had time and time again – even the government’s biggest Remainers accept it is over. May quite rightly slapped down Faisal, telling him yet again that 80% of voters backed parties which support leaving the single market and customs union. There is a lot of important Brexit scrutiny that Remain supporters could be carrying out. Instead they are backing the other team and asking the same tired old questions…

Hope Won Over Fear

Leave campaign chief Matthew Elliott looks forward…

Ousted Brexit Minister David Jones Joins Leave Means Leave

Guido hears ousted Brexit minister David Jones is joining the board of Leave Means Leave. Readers will know LML as the group fighting to make sure the government sticks to the mantra of no deal being better than a bad deal – an important negotiating position that is increasingly under threat post-election. Jones says he will “work to ensure that the spirit of confidence and optimism that was behind last year’s historic vote continues to inspire the process of withdrawal from the EU”. Interestingly LML chief Richard Tice says an additional 13 MPs have joined the group. Enough to vote down a bad deal…

Happy Independence Day!

May Guarantees Rights of EU Citizens From Article 50 Date

Back in February Guido told you Theresa May was considering Article 50 day as the cut-off date for EU citizens’ right to remain in the country. Well, tonight May has announced that the 3 million EU citizens in Britain on Article 50 day, March 29, can stay with access to schools, hospitals etc. The final cut off date has been left open and could be any date up to the point Britain leaves the EU, meaning it is on the table pending the rest of the negotiations. But any EU citizen here on Article 50 has the right to remain. An open and generous offer…

British Manufacturers’ Order Books At 29 Year High

UK manufacturers’ order books are at their highest level since August 1988. A CBI survey of 464 firms found a “broad-based improvement” in 13 out of 17 manufacturing sub-sectors, with food, drink and tobacco and chemicals leading the British-made boom. Meanwhile, export orders rocketed to a 22-year high. CBI Chief Economist Rain Newton-Smith said:

“Britain’s manufacturers are continuing to see demand for “Made in Britain” goods rise with the temperature. Total and export order books are at highs not seen for decades, and output growth remains robust.”

This is the same CBI that warned before Brexit that an out vote would cause a “serious economic shock“, set to cost £1 billion to the economy and threaten nearly 1 million jobs. This time last year, 70% of surveyed city economists predicted the UK would by now be in recession. Experts…

Hammond’s Revealing Today Interview

During his Today programme interview this morning Philip Hammond all but confirmed his desire for a three or four year transitional arrangement which wouldn’t see us fully leave the European Union until 2022 or 2023. Perhaps even more revealing was his choice of metaphor:

“When you buy a house you don’t move all your stuff in on the first day.”

Well you do unless you have more than one house…

“Soft” and “Hard” Brexit Terms Obsolete

The language of “soft Brexit” and “hard Brexit” is still being used by the pro-Remain broadsheets and broadcasters. Let Guido explain why these terms are obsolete and shouldn’t be used by objective TV news reporters…

First, the definitions of these terms change on the whim of Remainers. Last week, according to Sky News and co, “soft Brexit” meant staying in the single market and customs union. “Hard Brexit” meant leaving them. Since Philip Hammond signalled the UK will leave the single market and customs union, Sky News reporters have today redefined “soft Brexit” to mean transitional arrangements. How can viewers keep up?

Before the election, “hard Brexit” meant a no deal WTO Brexit. Since the election, Sky and others redefined “hard Brexit” to mean leaving the single market and customs union. That is surely just Brexit? This constant redefining of the terms to fit the editorial agendas of newspapers and broadcasters just doesn’t stand up to basic scrutiny. 

Remainers and their media allies need to be honest about what they mean when they talk about “soft Brexit”. If “soft Brexit” means staying inside the single market (not taking back control of borders), staying inside the customs union (not taking back control of trade), and staying inside the ECJ (not taking back control of laws), then that is not Brexit. Hammond and other Remainers in the Cabinet have accepted this. Only hardcore Remainers don’t.

This language is used exclusively by Remain supporters, Brexiters reject it entirely. Any broadcaster using the words “soft Brexit” and “hard Brexit” is misleading its viewers and revealing its anti-Brexit agenda…

EU States in ‘Violent Disagreement’ on Immigration

The EU’s East-West divide on immigration is on show yet again at today’s foreign affairs council in Luxembourg. The Germans are in ‘violent disagreement’ with the Hungarians, whose government has rejected migrant quotas; meanwhile the European Commission is taking Hungary as well as Poland and the Czech Republic to court for failing to take their quotas. German foreign minister Sigmar Gabriel has said the quotas are up to the European courts to enforce. Turns out the member states are far from united on this key policy area…

Brexit Talks Underway

Click to expand

Let battle commence…

Hammond Backs Brexit

Philip Hammond has poured cold water on those stories in the Remain newspapers this week and backed a real Brexit outside the single market and customs union. In other words, the Chancellor has agreed with the government and voters that we should properly leave the EU. Sorry Remainers…

Labour Brexit Chaos: Starmer Backs Staying in Customs Union

Last week Corbyn and McDonnell said Labour policy was to leave the single market. Today on Marr their Shadow Brexit Secretary Sir Keir Starmer suggested Britain should stay inside in some way. Corbyn and McDonnell have backed leaving the customs union. Today Starmer said Britain should stay in. Is Labour’s Brexit spokesman freelancing? Labour have been in complete chaos on Brexit all week.

Staying in the single market and customs union means Britain cannot take back control of borders and strike new trade deals around the world. It is not Brexit, it is going back on the referendum result. Going to annoy a lot of Labour voters…

May Confirms UK Leaving Customs Union By Hiring Top Trade Adviser

Theresa May and Liam Fox have confirmed the UK will leave the customs union by hiring a globally respected Chief Negotiation Adviser. Crawford Falconer is a New Zealander with 25 years of experience at negotiating trade deals. His job will be to “develop and negotiate free trade agreements and market access deals with non-EU countries”.[…] Read the rest

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Quote of the Day

Philip Hammond uses a trip to Berlin to mock the Foreign Secretary:

“A compromise is the art of dividing a cake in such a way that everyone believes he has the biggest piece. Wise words with some applicability to the Brexit negotiations although I try to discourage talk of “cake” amongst my colleagues.”

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