Last week we had the aftermath of the Supreme Court ruling on Article 50 (A50). The government published the half a page Brexit bill as members of the other parties began to put together their suggested amendments. In fact, there were a total of 60 amendments suggested, all of which can be found here. They range from a clause that if we reach no deal a deal shall be made based on the continuation of the current relationship, to one suggesting that A50 cannot be invoked until the government has determined what needs to be done about A127 and our membership of the EEA.

The bill itself will go to its second reading starting tomorrow and concluding on Wednesday, where MPs will debate the bill and 5 "reasoned" amendments as chosen by the speaker. The bill then goes onto the committee stage on Tuesday 7th February to conclude on the 8th. Other stages will follow in February, after which the bill goes to the House of Lords. The whole process is outlined here.

​Much of the focus fell on Labour's muddled response and Jeremy Corbyn's three-line-whip on Labour MPs voting in favour of A50. Tulip Siddiq has already resigned from the Labour front bench in response, with 18 MPs ready to defy their leader and vote against A50 (regularly updated list here). To add to the confusion, Dianne Abbot has now said that the party may review its position if the amendments are shelved.

​Nick Clegg continues with his push for a Norway style solution after releasing a discussion paper on alternatives to hard Brexit not long ago. Frustratingly, Clegg claimed last week that behind closed doors Germany was ready to offer us an EEA/EFTA deal with changes to freedom of movement stronger than that of Cameron's emergency brake, which is exactly the solution I and many others were advocating long before the referendum. Apparently, "they were ready to make precisely that concession". Something feels very off about this, but if true it would have been really useful information about 7-8 months ago, Nick. Alas, it looks increasingly like the chance to revive the Norway solution has gone.

In other related news, the petition to stop a Trump State visit sits at over 1.3 million signatures at the time of writing. Meanwhile, we really could do with that UK-US trade deal.

alex.davies@gmchamber.co.uk

​@GMCC_Alex

The Government just lost the Supreme Court Article 50 case by a vote of 8 to 3, meaning Article 50 can only be triggered by a majority parliamentary vote. It was made clear during the case that this was never about whether or not Britain should leave the European Union, rather the legal process required to do so. In essence, the question was about whether or not the government has the power to change UK law and to take away rights from British people without parliamentary involvement. This ruling finds that it does not, and that parliament alone is sovereign. The Government now has to put forward a bill, and we are expected to hear about this from David Davis this afternoon.

At this point I'd like to point out that according to what we know, there is currently a majority of something like 450-150 in favour of triggering A50, so this ruling does not mean that Brexit will not happen. The Liberal Democrats have said that their six MPs will vote against A50 unless promised a referendum on the final deal. Labour has hardened its position in favour of Brexit in recent weeks, and has said it will not "frustrate" the process. What Labour are trying to do, is get some amendments into the bill to make sure that we get tariff-free access to the Single Market, among other things.  At this point though, there is no real threat of the vote holding things up.

The Supreme Court also voted unanimously that the devolved Parliaments do not have to be consulted, and so essentially cannot veto the 50 vote. This will be difficult news for many, but also ensures that we will not face a constitutional crisis during the A50 vote, something which certainly might have held the process up.

This case had to happen because of the vagueness of Article 50 itself, and the fact that the referendum bill is for consultative rather than legally binding referenda - something which could be blamed on the Cameron government. It is unlikely though to impact the timeline or the nature of the Brexit process. The other two pending Brexit legal cases though, on the revocability of A50 and whether we automatically exit the EEA at the same time as the EU, have the potential for more impact.

​In retrospect, Theresa May's speech last week gave us more questions than answers. We had confirmation that we seek to exit the single market and agree a comprehensive FTA; and also that we look to exit the customs union but agree some sort of customs cooperation. The PM also mentioned that there would be a "phased implementation" and multiple "interim arrangements", which led me to make the mistake of thinking that May was talking about the end-game rather than what we hope to achieve within the A50 negotiation. Soon after the speech however, David Davis made it quite clear that he expects the FTA to be signed in two years.

Let's not beat around the bush here, every piece of evidence we have suggests that this is impossible. Around a tenth of Canada's exports go to the EU (compared to around half of ours) and the CETA agreement - which does not cover services (around a third of our exports) - took seven years to negotiate. The much more comprehensive South Korea FTA arguably took 18 years since inception, with the final round taking four years. Switzerland - whose relationship with the EU most closely resembles what May seems to be going for - has been negotiating constantly with the EU for 10 years now.

If the Government really does expect to wrap up a comprehensive FTA - the biggest and most complicated single aspect of this process - in just two years, then it isn't clear what the "phased implementation" and "interim arrangements" are for.  The EEA/EFTA route which I personally favour would see us do the official exit from the EU in two years, not bothering with trade at all, and then figure the rest of it out once there are no time constraints. It feels like Theresa May's route means that we can't exit until we have an FTA, which could be ten years, or that we have to leave with no deal at all. That is of course, unless those interim arrangements end up being something along the lines of EEA/EFTA and we're just taking David Davis' words too seriously. 

Now would be the ideal time for the Brexit opposition to call TM out on this and push for an interim solution that keeps us in the single market for the time being, so as to remove trade matters from the A50 negotiations. The danger with this strategy of course, is that some will see such a solution -  being officially out, but sort of still in - as a way we can sneak back in to the EU at a later stage. This has to be avoided, or both sides once again find themselves at an impasse, and the chances of us ending up with a solution that suits nobody increases.

alex.davies@gmchamber.co.uk

@GMCC_Alex

Theresa May has just finished her speech laying out Britain’s objectives going into the coming Brexit negotiations. Overall, we don’t know a great deal that we didn’t suspect already, but we now have confirmation of a few things in particular.

The Prime Minister made it clear that the deal she wants for Britain cannot mean continued membership of the single market. The objective instead is to work towards a “bold, comprehensive and ambitious” free trade deal with the EU in order to maintain “the greatest access possible”. I’ve explained before why the term access is meaningless, but there were a few more details. May said that she is not against the idea of replicating aspects of the single market, specifically mentioning financial services and the automotive industry, and saying that it makes no sense to start from scratch.

May has made it clear in the past that she does not view our status within the customs union as a binary thing, and reiterated this in her speech today. She made it very clear that we would seek to find ourselves outside of the EU’s Common Commercial Policy – allowing us to do our own trade deals – but again, may mentioned something along the lines of an associate membership of the customs union in order to keep trade flowing freely.

The other main announcement was that the final deal would be put to a vote in both Houses of Parliament, a welcome development for many but one which for now has no clear implications. Nobody seems to know what would happen if Parliament did reject a deal, supposedly towards the end of the two-year negotiating period. At this point would we revert to WTO rules and the hardest Brexit of all? The pending legal case on the revocability of A50 will surely have a massive impact on exactly what this means.

May rounded off her speech by proclaiming that “No deal for Britain is better than a bad deal”. This echoes the Chancellor’s previous sentiment that in the event of a rock-hard WTO-rules Brexit, Britain would strip regulations and lower taxes to establish itself as a Singapore on Europe’s doorstep – something the EU would be concerned about certainly. For now, this strategy is being put forward as a worst case scenario backup plan, and as a mild threat to the EU27 to work with us in good faith towards a new arrangement. The reaction to this from the rest of Europe however, remains to be seen.

There were a few other good details in the speech. On EU citizens in Britain, May said that the government would seek to guarantee those rights as soon as possible, but perhaps in a veiled jibe at Merkel’s previous refusal at such a deal mentioned that there is no unanimity on this from the other side. There was a commitment that workers’ rights would be fully protected and indeed bolstered once within our remit. There was also a commitment to continued collaboration on matters of crime and foreign affairs, as well as science, research, technology and medicine. May suggested that it is reasonable for us to continue to pay into the EU budget for some of these privileges, but that these sums would not be vast.

Another unclear but important part of the speech covered how the PM sees the Brexit process happening. May is hoping for an agreement on the future relationship by the end of the two-year negotiating period, followed by a “phased implementation” utilising multiple “interim arrangements”. How this is different than a transitional arrangement is anybody’s guess, but it was made clear that a cliff-edge is to be avoided. How much detail the PM expects us to agree upon within two years is not clear at all, as it would be impossible to negotiate even the trade deal alone within such a time. Instead, it feels as if the PM is hoping to agree upon a broad position within two years, but is happy for the minutiae of process to take much longer, my guess would be a decade or more.

I’m sure that many leavers got a bit tingly during parts of the speech, but the main criticism of it will be that it is undoubtedly a “have your cake and eat it approach” despite being told by the EU27 that such an approach is unacceptable. It seems from how May addressed the “phased implementation” strategy though, that the position she is talking about is the end-game, not where we will be in 2019. The suggestion of multiple interim arrangements necessitates that May understands realising her vision of a global Britain in full won’t be happening in the near future, most likely not during her premiership. In reality, exiting the single market and the customs union was almost always an inevitability at some point in the future of post-EU Britain, but we still don’t have a lot of clarity over the steps we will be required to take to get there. The type of trade deal May is proposing would be more comprehensive that Canada’s CETA agreement, and when such an agreement has never been concluded in less than seven years, often taking more than ten, it could be a long time before we drop out the SM. Until then, interim arrangements will surely be some kind of quasi-membership until we have figured things out, which makes me still reluctant to call this a hard Brexit. In fact, any new UK-EU trade deal will require an independent dispute resolution regime handled by a supranational court. May explicitly said that she is okay with supranational institutions, just not any as strong as the EU ones. This points us directly towards membership of EFTA, which has its own court ready to take the European Court of Justice’s place. Alongside a comprehensive FTA, this would essentially put us in a Swiss-plus position.

Once again, the vital missing piece of the puzzle here is timelines. If following the negotiations, we accept that we won’t be able to do any of this stuff for a long time, then what do we do in the interim? May even conceded that interim arrangements would be up for negotiation. In terms of our final destination then, May has been quite clear as to the government’s objectives. As to what steps we take to get there though, I would still say that nothing is off the table.

alex.davies@gmchamber.co.uk

@GMCC_Alex

As expected, the Christmas period was really quiet on the Brexit front. With the media struggling to find anything noteworthy to report on, pro-Brexit think tank ChangeBritain.org with the full support of Michael Gove snuck out a report suggesting that leaving the Single Market and the customs union would create over 400,000 jobs. The media of course jumped on this because nothing else was going on, but the report was then torn apart most notably by Jonathon Portes in the Guardian and Sam Bowman of the Adam Smith Institute, who found that the numbers are "complete rubbish" and "show nothing of the sort".

Sir Ivan Rogers stepped down from his role of the UK's Ambassador to the EU, criticising the government's "muddled thinking" over Brexit, then resigned from the civil service altogether a few days later. His resignation letter is available here in full. What followed was seemingly much muddled thinking from both sides over what influence Rogers had over Brexit and whether or not this was a good thing. Rogers worked with Cameron to negotiate the "In" vote reform package, and apparently quit due to the Prime Minister and the wider governments stance of avoiding hard truths. Arch-Brexiteers hailed the development as a victory, seeing Rogers as a negative Nancy of sorts, whilst others spoke to his pragmatism and the need for realism in the Brexit process. I don't know anything about the guy, but the way the prominent charcters on both sides leapt to a particular narrative was interesting. Anyway, Rogers has now been replaced by ex-EU ambassador to Moscow and Western Europe Sir Tim Barrow, who is said by ministers to be a "pragmatic problem solver" who is prepared to give the "unvarnished truth" but also to offer solutions. 

The only other marginally important thing that happened was Theresa May's interview on Sky News yesterday morning, in which we once again learned very little. John Rentoul ran with "How to use lots of words and say absolutely nothing, by Theresa May." Richard North, on the other hand picked up on some detail in the PM's words, in particular the line that she wanted "the best possible deal for trading with and operating within the Single European Market". Taking these words very literally, this seems like an admission that we are aiming to remain a full participant of the SM, whilst May has repeatedly inferred we will be exiting the customs union or will significantly change how we interact with it. This sounds very much like an EEA style route. The media  for some reason is now utterly convinced that we are leaving the SM and that the government just won't admit it, the details of the PM's words however suggest otherwise.

This brings me onto a very interesting shift in the general Brexit-debate landscape. Ian Dunt, a writer at Politics.co.uk and a prolific Brexiteer antagoniser on Twitter wrote an article last week asking for remainers and Liberal Leavers to "bury the hatchet" and unite. The responses to the article, the tweet about it and his olive branch approach have been fascinating.

​"Liberal Leavers" is the term given to those who voted for Brexit, but also hold pro-immigration and pro-free-trade beliefs. It's more complex than that as Roland Smith explains, but for most of these Liberal Leavers something akin to the Norway-style EEA/EFTA strategy was the objective, as a transitionary arrangement from which we can do Brexit properly in our own time. As Ben Kelly explains, there was a feeling from this group that they could unite with remainers in order to secure a safe, steady and de-risked Brexit. Instead what appears to be happening is that the sides are getting further and further apart, increasing the likelihood of a Brexit that suits only the fringes of the Leave base.

The issue is that many remainers are pretty much suggesting that the EEA/EFTA route is the best option because it would allow an easy re-entry back into the EU in the future, which is causing parts of the Leave base to double down and strengthen their position. Herein lies the issue, the remainers extending the olive branch appear to be hoping to use the Liberal Leavers - who are leavers first and foremost - as a way to stop Brexit entirely, and are not even being shy about it. As Ben Kelly puts it: "No one wants to accept an olive branch they will later be beaten with." Liam Blizard on the other hand, writes that there needs to be a compromise on both sides for this partnership to work.

This isn't happening just within the blogosphere. We now have prominent leave figures such as Michael Gove switching their position from being in favour of a transitional arrangement to being totally against it. Across the board, the sentiment of the public-eye leavers has noticably strengthened, as a reaction to the fear that any remain influence in the process is only to stop the process altogether. We saw this with the response to Sir Rogers' resignation. 

It seems that the only way to reconcile this partnership of the moderates would be for the olive-branch remainers to fully accept that we will be leaving the EU and not trying to get back in, and for the Liberal Leavers to perhaps accept that something like the EEA/EFTA solution might be more like a final destination than originally hoped. If you don't find yourself in either of these camps though, which is most people, none of this would be acceptable. Blogger Another48percenter concludes that the partnership won't work simply because the good-willed overlap between both sides isn't big enough. In fact, it is probably getting smaller. Leavers are hardening their demands, and some remainers are begining to take the "if it's gonna blow up, let's make it blow up big" approach. It is unfortunately begining to feel as if the room for friendly and productive teamwork bewteen both sides is shrinking, which feels bad for everybody.

Anyway, it's less than 3 months until A50 is meant to be triggered. Between now and then, anything could happen.

alex.davies@gmchamber.co.uk

@GMCC_Alex