Posts Tagged ‘Brexit’

Brexit: Michel Barnier says draft transition treaty mostly agreed

March 19, 2018

Chief EU Brexit negotiator Michel Barnier has announced agreement on most of the issues that could allow the EU to offer Britain a transition deal. Some concerns about the Irish border still need to be resolved, though.

Brexit Michel Barnier David Davis (picture-alliance/AP Photo/V. Mayo)

The EU’s chief negotiator Michel Barnier announced on Monday that agreement had been reached on a number of issues that could allow the EU to offer Britain a transition deal for the period after it leaves the bloc.

“We have reached an agreement on the transition period,” Barnier told a press conference in Brussels after talks with his British counterpart David Davis. “The transition will be of limited duration.”

Read moreUK lawmakers suggest postponing Brexit

The UK hopes to secure a transition period of two years that would maintain access to the single market while allowing more flexibility on issues such as forging trade deals with third-party countries. Agreement of a deal when EU leaders meet on Friday is vital for UK businesses.

“The period of transition requested by the United Kingdom will be a time which is useful, very useful, for the United Kingdom administration and businesses in order to prepare themselves for the future,” Barnier said.

The agreement foresees keeping all EU rules in place in Britain until the end of 2020. During the period, Barnier said, Britain would no longer take part in setting rules.

Barnier said the transition would allow Britain and the EU to finalize their eventual relationship.

There was not yet a clear vision of future arrangements around the Irish border. Barnier said. But he added that a “backstop solution” had been agreed that would avoid a hard customs border.

“We have agreed that the backstop solution must form part of the legal text of the withdrawal agreement.”

Davis and Barnier had met earlier on Monday. Envoys from member states in Brussels had been summoned to an urgent meeting ahead of those talks.

Just ahead of the announcement, the Irish government said it needed a guarantee from the EU that there would be no hard border on the island of Ireland.

Irish Foreign Minister Simon Coveney said it wanted Brussels to ensure that a fallback protocol agreed in December would be adhered to as part of any deal.

Read more: Northern Ireland’s fragile peace ‘all about the border’

“The EU27 have been consistent that there can be no backsliding on any part of December’s agreement,” Coveney was quoted as saying ahead of a meeting with fellow EU foreign ministers in Brussels.

“This highlights the importance of the UK engaging meaningfully on all aspects of the Withdrawal Agreement, including the fallback Protocol on Ireland/Northern Ireland.”

On early flight to Brussels for meeting with @MichelBarnier this morning – important day in negotiations in build up to EU Council on Thurs/Fri – no backsliding on Irish Border issue remains clear focus to facilitate progress on other issues.

The pound sterling, which has shown jitters in recent weeks amid warnings from Barnier that a transition might not be agreed, on Monday rose to its highest level against the euro since February.


Brexit Bulletin: The Bridge Gets Built

March 19, 2018


Image result for Brexit, photos

By Emma Ross-Thomas

  • Davis and Barnier meet in Brussels on transition deal
  • U.K. is trying to get a written commitment on transition

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It’s crunch week for businesses wanting to know the rules and trading regime they’ll be operating under just a year from now.

On Monday, Brexit Secretary David Davis and chief EU negotiator Michel Barnier meet in Brussels. A news conference has been penciled in for midday. Davis has avoided appearing alongside Barnier so far this year, so it could be a sign the two sides are on track to reach an agreement on a transition phase that will keep all the rules the same until the end of 2020 — or 21 months after exit day.

The U.K. is trying to secure a written promise from the EU about the transition agreement, Tim Ross reports. Businesses are cranking up the pressure to make the transition as solid — and useful — as possible. They are becoming increasingly aware that any agreement reached at the summit this week will be a political commitment — not legally binding until the final withdrawal agreement is signed early next year. Barnier has made the point repeatedly in recent weeks that there’s no transition without a final deal and that the transition agreement isn’t certain until the divorce deal is inked. With the Irish border issue still an intractable riddle, that’s a warning that businesses have to take seriously.

Davis and Barnier are to meet later today.
Photographer: Dario Pignatelli/Bloomberg

British negotiators are pushing for the EU to include an explicit statement in negotiating guidelines. They want the document to state that an agreement in principle has been reached on the terms of transition, according to a person familiar with the matter. The draft guidelines circulated earlier this month leave some blanks at the top to be updated just before the summit and the holding language is vaguer — it says the EU side “welcomes/notes the progress” on transition.

That kind of language wouldn’t go down well with businesses and might not be enough for them to put their contingency plans back in the drawer.

“Political agreement on transition alleviates some pressure on some companies, but it would be a mistake to think it solves the Brexit readiness problem,” said James Stewart, head of Brexit at KPMG. “Just as no lawyer would allow you to complete a major deal without a legally binding contract, so it would be equally reckless for businesses to scrap their contingency plans until they have a similar level of assurance.”

Brexit Latest

Unison Strained | National interests are starting to test the united front that the 27 remaining EU members have shown so far during the Brexit talks, according to three people with knowledge of the process, Ian Wishart reports. At issue is whether to add language on specific industries — and addressing the concerns of specific countries. At a meeting in Brussels this week, Spain, whose national airline Iberia is owned by the same company as British Airways, signaled it would like specific references to aviation, while Luxembourg wants more detail on financial services.

View From Berlin | German Chancellor Angela Merkel is still looking for clarity from the U.K., she said in her weekly podcast published on Saturday. “We will, for the first time, talk about what our vision for our future relation with the U.K. looks like,” Merkel said. “Of course, the U.K. also has to say what it wants.” May gave her detailed vision in a landmark speech on March 2, but EU officials have dismissed many of the proposals as unworkable.

Finance Is Fine | Royal Bank of Scotland Chairman Howard Davies said the finance industry is unlikely to be the one to make a longer transition period after Brexit necessary. “If you suddenly faced a cliff edge, you’d have to move people very quickly into another a city,” he said on Sky News. “But the issue would be finding apartments — it wouldn’t be building huge facilities.” Banks are well ahead of other companies when it comes to contingency measures, and RBS has plans for a subsidiary in Amsterdam.

Aviation Risk | The U.K.’s Civil Aviation Authority doesn’t have the capacity to take over the functions of the equivalent European regulator, and it would take five to 10 years even to begin that process, according to a parliamentary committee report. The chief executive of the U.K. authority told the panel that “it would be misleading to suggest that’s a viable option.” Any transition from one authority to another would lead to disruptions and risks to the industry, according to the report.

Freelancing Boris | Foreign Secretary Boris Johnson said it’s “claptrap” to say the European Court of Justice will continue to have some influence over the U.K. after it leaves the EU, contradicting Prime Minister Theresa May, who made it clear in her March 2 speech that the court will still have a role after the split.

Minority Report | Parliament’s cross-party Brexit Committee is so divided that the pro-Brexit faction refused to sign off on a report this weekend and issued its own minority report that attacked the stance taken by the chairman of the influential panel. The committee’s main paper called for the government to consider extending next year’s withdrawal deadline. Hardline Brexit campaigner Jacob Rees-Mogg, who is on the committee, said the proposal “is the prospectus for the vassal state” and sets out a “future not worthy of us as a country.”

On the Markets | Pound traders are cautiously awaiting signs of progress toward a transition deal. Even if those expectations are met, any gains in the currency may be short-lived, Charlotte Ryan reports.

And Finally…

London’s pain is Luxembourg’s gain. While London house prices fall, Luxembourg’s are rising so much that its red-light district looks like it will be a likely home for bankers escaping Brexit. As the Grand Duchy prepares to welcome financiers relocating from the U.K., a lack of housing has pushed the price of relatively modest family homes beyond the €1 million mark ($1.2 million), Stephanie Bodoni reports.

That has led to edgier areas being developed to keep up with demand. One luxurious project called “Soho” has sprung up around the Rue de Strasbourg, which is slowly shedding its reputation as a cut-throat, no-go-area populated by drug pushers and pimps.

The Luxembourg City skyline.
Photographer: Getty Images

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EU convenes urgent Brexit meeting amid deal talk

March 19, 2018


BRUSSELS (Reuters) – Diplomats handling Brexit talks for EU member states in Brussels were summoned to an urgent meeting by EU negotiators on Monday, diplomats and officials said, amid speculation about an interim deal ahead of a summit later this week.

“There could be a deal,” one senior EU diplomat said. Another however played down talk that good progress in negotiations with Britain over the weekend had reached the point of assuring London of a transition deal after Brexit.

Image result for Michel Barnier and david davis, photos

British Brexit Secretary David Davis will meet the EU’s chief negotiator Michel Barnier in Brussels shortly after 11 a.m. (1000 GMT) as the two sides try to hammer out an interim deal before leaders meet for a summit on Thursday.

Envoys will meet before Davis meets Barnier.

Several EU officials and diplomats said intense talks over the weekend aimed, among other things, at resolving serious differences over the Irish border had made good progress.

But one senior EU source involved in discussions said talk of a deal being agreed was “hype”.

Spokesmen for Barnier and the British government declined official comment.

Reporting by Gabriela Baczynska and Alastair Macdonald in Brussels and Elizabeth Piper in London; Writing by Alastair Macdonald; Editing by Catherine Evans


UK set to back down over fishing quotas during Brexit transition

March 17, 2018

British share of ‘total catch’ to remain unchanged during two years after EU exit

Image may contain: ocean, outdoor and water
The British fishing industry contributes less than 0.05 per cent of the country’s gross domestic product © Bloomberg
Laura Hughes in London and Alex Barker in Brussels 
Financial Times (FT)
The UK government has accepted that British fishermen will not enjoy a larger share of the fish available to be caught in domestic waters during the post-Brexit transition period.

Michael Gove, environment secretary, has called for an immediate renegotiation of fishing quotas and access for EU vessels in British waters from March 2019, when the UK will leave the bloc.

But the British government is set to accept on Monday demands set out in the EU’s draft transition text, which includes a clause making clear that the UK share of the “total catch” will remain unchanged during the two years after the UK leaves the EU.

As a result, Britain’s share of the total allowable catches — which has been fixed for decades under the “relative stability” quota arrangement — will remain exactly the same during the post-Brexit transition period.

The EU’s proposals fall well short of Mr Gove’s ambitions for UK fisheries and he is understood to have raised his concerns about the EU’s position on Tuesday night at a Brexit cabinet committee meeting.

Last July, Mr Gove said the UK was leaving the EU’s common fisheries policy, which allows EU vessels access to UK waters and sets the quotas for how much each country can catch of each species of fish.

A UK government official said on Friday: “Negotiations on fish are continuing over the weekend but a landing zone is in sight thanks to significant movement on the part of the commission.

“Michael Gove, David Davis and the PM have all helped by digging their heels in: that approach is being vindicated,” they added.

In negotiations, Britain has proposed that the EU must “agree” the total catch and share permitted in UK waters before the EU decides the quotas for member states in 2020. Such arrangements would effectively have given Britain the power to determine what fishing was allowed in UK waters after Brexit.

The demand, which was one of Britain’s most ambitious requests relating to the transition period, was flatly refused by the EU side. One EU negotiator described the original UK idea as “wild”.

Brussels instead offered the UK further assurances that they would be consulted when the EU member states set the total catch allowed for individual species in British waters. The draft proposal says the EU would “give the opportunity to the UK to provide comments”.

British negotiators are pushing for more detailed arrangements.

An additional reference in the draft to the so-called “relative stability” principle — which has kept share of fish given to EU countries stable for 30 or more years — also ensures a degree of continuity for all sides during the transition. While Britain had sought to give UK fishermen a bigger share of the catch, France had at the same time pushed for the EU to increase its share relative to Britain.

Controlling access to UK waters is a key leverage point for Britain in talks on a future trade deal. France, the Netherlands and Denmark are leading a group of countries determined to make sure their politically powerful fishing industries do not suffer after the post- Brexit transition period ends.

The British fishing industry contributes less than 0.05 per cent of the country’s gross domestic product, and fisherman have expressed concern that the sector could be used as a bargaining chip in the negotiations.

In a bid to neutralise Britain’s negotiating power, the EU has tied fishing rights to other parts of any trade deal, implying that market access for UK airlines or products would depend on a good fishing deal for the EU. Most UK fish exports are to the EU.

Last week, Mr Gove said it was “vital” that the UK regain control over its own fisheries after Brexit.

In a joint statement with Ruth Davidson, leader of the Scottish Conservatives, Mr Gove said: “As we leave the EU, we want the UK to become an independent coastal state, negotiating access annually with our neighbours.

“And during the implementation period we will ensure that British fishermen’s interests are properly safeguarded.”


Nicola Sturgeon to meet Theresa May over Brexit row

March 14, 2018

March 14, 2018

BBC News

Theresa May and Nicola SturgeonImage copyrightGETTY IMAGES
Nicola Sturgeon and Theresa May also had face-to-face talks at Downing Street in November

The prime minister has said she is determined to end the deadlock with the devolved governments over Brexit.

Theresa May will hold meetings with Scottish First Minister Nicola Sturgeon and her Welsh counterpart Carwyn Jones at Downing Street later.

The three have been at loggerheads over what happens to powers in devolved areas when they return from Brussels after Brexit.

Ms Sturgeon said she did not expect a deal to be reached at the meeting.

The UK government recently proposed the “vast majority” of powers returned from the EU would go straight to Edinburgh, Cardiff and Belfast rather than Westminster.

But it would retain control in 24 areas, at least in the short term.

It says this would be necessary to avoid different parts of the UK having different rules and regulations for things like food hygiene and health and safety when it leaves the EU.

But the Scottish and Welsh governments say it would effectively give Westminster a veto over some devolved responsibilities.

A series of meetings between the UK government and devolved administrations has so far failed to find a solution, although all parties agree that progress has been made in recent weeks.

Mrs May will hold talks with Ms Sturgeon and Mr Jones as part of a Joint Ministerial Committee meeting at Downing Street in bid to secure a breakthrough.

‘Democratic dividend’

She said she would be making clear her commitment to a deal that “brings our country together, protects the security and prosperity of all our communities and business sectors, and reinforces our Union of nations”.

Mrs May added: “I am determined to secure a settlement that delivers an unprecedented democratic dividend for the people of Scotland, Wales and Northern Ireland, while protecting and preserving the precious Union that is at the heart of our past, present and future success.”

Ms Sturgeon said she was not expecting an agreement to be reached during the meeting as “there are no new proposals from the UK government on the table”.

She added: “At today’s meeting we and our Welsh colleagues will take the opportunity to set out what changes are required to secure our consent.

“While we remain determined to continue discussions on this issue, it is time for the UK government to show respect for devolution and accept that no changes can be made to Scotland’s devolved powers without the consent of the Scottish Parliament.

“Today is an opportunity for the UK government to demonstrate that it is genuinely committed to acting in the interests of the people of Scotland and to respect the democratically endorsed devolved settlement.”

Scottish Secretary David Mundell had been among those due to be at the JMC meeting, but he will not now attend after returning to Scotland on Tuesday due to the death of his mother Dorah at the age of 92.

Presentational grey line

What is the row about?

Whitehall analysis has identified 153 areas where policy in devolved areas is currently decided in Brussels.

The UK government’s Brexit bill had initially proposed returning all of these to Westminster immediately after Brexit.

But it has recently put forward changes that would see the “vast majority” of those EU powers instead returning directly from Brussels to Edinburgh, Cardiff and Belfast.

This would include in areas such as carbon capture, water quality and energy efficiency.

But it has named 24 devolved policy areas where it wants to retain power temporarily in the wake of Britain’s exit from the bloc, including in areas such as agriculture, fisheries, food labelling and public procurement.

The UK government says this is necessary to avoid different parts of the UK having different food hygiene or safety regulations.

But the Scottish and Welsh governments have repeatedly accused the UK government of a “power grab”, and have introduced their own Brexit legislation in their respective parliaments.


EU Parliament adopts Brexit resolution to press Britain

March 14, 2018

A video grab from footage broadcast by the UK Parliament’s Parliamentary Recording Unit (PRU) shows Britain’s Prime Minister Theresa May speaking in the House of Commons (AFP/PRU/Dominic Lipinski)
BRUSSELS: The European Union’s legislature has adopted a resolution on Brexit that seeks to put further pressure on British Prime Minister Theresa May during her negotiations to leave the bloc.
The EU Parliament approved — by 544 votes for, 110 against and 51 exemptions — a text that says Britain should, among other things, not be able to cherry-pick benefits of the EU market in any agreement on future relations.
The legislature is not directly involved in the negotiations but will have to approve any Brexit deal.
EU council President Donald Tusk has also put draft negotiating guidelines on the table that will be discussed at a March 22-23 summit, when the 27 leaders are set to adopt an outline for future negotiations.

Time to turn Brexit speeches into treaties, Juncker tells May

March 13, 2018


© AFP/File / by Damon WAKE | Juncker warned it was particularly crucial for London to clarify its plans for the sensitive issue of the Irish border.

STRASBOURG (FRANCE) (AFP) – Britain must “translate speeches into treaties” and come up with a detailed plan for its post-Brexit ties with the EU, European Commission President Jean-Claude Juncker said Tuesday.EU leaders have been pressing British Prime Minister Theresa May to clarify what she wants before they agree their position on the future economic partnership at a summit later this month.

A series of speeches by May have done little to satisfy Brussels, and Juncker warned it was particularly crucial for London to clarify its plans for the sensitive issue of the Irish border.

Addressing the European Parliament in Strasbourg ahead of a summit in Brussels next week, Juncker made a direct plea to the British leader for more detail.

“Prime Minister May, give us some more clarity on how the UK sees its future relation with the European Union,” he said.

“As the clock counts down with one year to go, it is now time to translate speeches into treaties, to turn commitments into agreements, broad suggestions and wishes on the future relationship into specific workable solutions.”

He said it was “especially important” that Britain comes up with concrete proposals for the border between British-ruled Northern Ireland and the Republic of Ireland, which is staying in the EU.

Both Britain and the EU have vowed to avoid the return of customs checks to the border and an interim deal in December left some flexibility on the issue, but an EU text putting the agreement into law has sparked a fresh row with London.

The draft EU text published last month says Northern Ireland must stay in a customs union with the rest of the bloc if no better way is found to avoid a hard Irish border — which Britain rejects.

Juncker told MEPs the draft text simply translated the December accord into legal language and “should not come as a shock”.

And the former Luxembourg PM warned London the EU institutions and member states stood squarely in support of Ireland on the issue.

“For us this is not an Irish issue, it is a European issue. It is all for one and one for all — that is what it means to be part of this union,” he said.

Britain hopes to begin talks on the future trading relationship with Brussels next month, and May set out her proposals for a new wide-ranging free trade agreement in a speech on March 2.

But EU Council President Donald Tusk warned last week that the Irish border issue must be solved before negotiations can move on to other issues.


Brexit cost study: ‘Failing to prepare is preparing to fail’

March 12, 2018

Assessing the business costs of Brexit for both the EU27 and the UK hasn’t been easy. A consulting firm and a law company have done exactly that, finding that the financial burden on all sides concerned will be huge.

BMW plant (picture alliance/dpa/A. Weigel)

In a unique assessment of the business costs of Brexit, management consulting company Oliver Wyman and law firm Clifford Chance partnered to highlight the impact of tariffs and non-tariff barriers on companies in the EU27 and the UK as they approach a standard, post-Brexit WTO trading relationship.

The study estimates that the direct costs of Brexit will total around $43 billion (€34.9 billion) for EU exporters and around $37.4 billion for British exporters.

The survey focuses on direct impacts and does not include any additional effects stemming from migration, pricing changes or third-country free trade agreements.

Uncertain future

According to the study, the automotive sector will be hit hardest in the EU27, although country-level differences will vary considerably.

In Germany, four of its 16 states — Bavaria, North Rhine-Westphalia, Baden-Württemberg and Lower Saxony — will shoulder around 70 percent of direct impacts as a result of exports to the UK and based on their leading positions in the automotive and manufacturing sectors.

In Britain, the financial services sector is expected to take the biggest hit by far, incurring about one-third of the extra red tape costs. There will also be significant impacts on other industries and firms highly integrated in the European supply chain.

The study emphasizes the need for companies to face the difficulties ahead, saying that firms have to think through the impact on different levels: operations, supply chains, customers and competitors.

“Failing to prepare is preparing to fail,” said Jessica Gladstone, partner of Clifford Chance. But she added that “given the difficulty of knowing exactly what turbulence lies ahead, many businesses are putting Brexit in the ‘too hard’ box.”


UK Chancellor Philip Hammond refuses to say whether Brexit is ‘worth it’

March 12, 2018

Theresa May eventually replied ‘yes’ when asked if it was worth paying the predicted price of leaving the EU

By Rob Merrick Deputy Political Editor
The Independent

Chancellor Philip Hammond refuses to say that Brexit is ‘worth it’
Philip Hammond

The Chancellor refused to say that Brexit is “worth it” as he insisted the Government has yet to model the economic effects of its hoped-for exit deal.

Theresa May replied “yes” when asked if it was worth paying the predicted price of leaving the EU, when quizzed by MPs in the Commons last week.

But, asked the same question on the BBC’s Andrew Marr ShowPhilip Hammond declined to say he believed that Brexit was in the interests of the British people.

“The British people have decided that we are leaving the European Union and that is what we are doing. Our job is to make sure that we get the best possible deal for Britain,” he replied.

It was possible to achieve a “smart Brexit” that would protect jobs, prosperity and businesses, Mr Hammond added.

The Government has dismissed its own leaked forecasts warning of a severe economic hit from leaving the EU, on the basis they did not model the preferred outcome.

Asked if that exit deal that Britain hoped to achieve had been studied by Treasury officials, Mr Hammond said: “Not yet – we haven’t even embarked on the negotiation yet.”

He hinted at doubts over agreeing a transition deal, of about two years, at next week’s EU summit, saying only that it would “hopefully” be agreed.

“Then we start talking with them about a shape of a future partnership. Once we know what the deal looks like, then we will certainly model it,” the Chancellor said.

The timetable will raise doubts over the Government’s pledge to show the full Brexit modelling to MPs before a “meaningful vote” on the Prime Minister’s deal this autumn.

Any agreement is unlikely to be reached before October, giving little time for the Treasury work to be carried out before the vote.

Looking ahead to the Spring Statement on Tuesday, Mr Hammond insisted he would not relax his grip on the public finances, despite seeing “light at the end of the tunnel” for the economy.

Britain’s debt mountain – at £1.8 trillion – was still too high and had to be brought down.

“There is light at the end of the tunnel because what we are about to see is debt starting to fall after it has been growing for 17 continuous years. That is a very important moment for us but we are still in the tunnel at the moment,” the Chancellor said.

He added: “All the international organisations recognise that [Britain’s debt] is higher than the safe level.

“This isn’t some ideological issue. It is about making sure that we have the capacity to make sure that we can respond to any future shock to the economy.”

For Labour, Shadow Chancellor John McDonnell said the Government’s approach was not working and it needed to change direction.

“Austerity is holding growth back. Wages are below what they were in 2007-08, so this isn’t a matter for celebration,” he told the same programme.

“What he [Mr Hammond] has done, very cleverly, very cunningly, he has shifted the debt onto the shoulders of NHS managers, onto the shoulders of headteachers and onto the shoulders of local government leaders.”


We’re not out of austerity tunnel yet – Chancellor Philip Hammond

BBC News

Chancellor Philip Hammond has rejected calls by Labour and some Conservatives to announce the end of austerity in his spring statement on Tuesday.

He is expected to unveil the smallest budget deficit since 2002, thanks to better than expected public finances.

But he told the BBC national debt was still too high, adding: “There is light at the end of the tunnel… but we are still in the tunnel at the moment.”

Labour has urged him to end the “pain and misery” of public spending cuts.

Mr Hammond told the Andrew Marr Show it would be wrong to pour “every penny” into additional public spending.

He said it was “very important moment” to see debt starting to fall after growing for 17 continuous years.

But he said: “We should be very careful looking at single sets of figures – one quarter or two quarters – we need to look at what’s happening sustainably in the economy.”

The day-to-day deficit has been eliminated, it emerged earlier this month, two years later than former chancellor George Osborne had wanted when he set out in 2010.

The UK is now running a surplus of £3.8bn in its current budget – the money borrowed to fund day-to-day spending rather than long-term investment – according to the Office for National Statistics.

“We have a debt of £1.8 trillion – 86.5% of our GDP,” Mr Hammond said. “All the international organisations recognise that is higher than the safe level.”

Debt ‘horror’

Mr Hammond told the BBC that “we need to get our debt lower”.

“I think most people in this country would be horrified to be reminded that we have £65,000 worth of public debt for every household in this country,” he said.

The chancellor is due to announce a half-yearly update of Britain’s public finance figures on Tuesday, but confirmed he would not be delivering any new tax or spending measures.

“If there is the flexibility and the space to do something, then we will decide in the autumn how we are going to use that,” he said.

Economists expect the chancellor will announce borrowing is set to be around £7bn lower in 2017-18 than had been predicted, when he unveils the latest forecasts of the Office for Budget Responsibility.

Also appearing on Andrew Marr, John McDonnell, the shadow chancellor, called on the government to end its austerity programme.

He said recent economic figures were “not a matter for celebration” – and said the chancellor “should be coming into the real world”.

He said Mr Hammond had “shifted the deficit onto the shoulders of NHS managers, headteachers and onto the shoulders of local government leaders.

“They’re facing a financial crisis because of government cutbacks,” he told Marr.

John McDonnell says he won’t appear on Russia Today

He called the government’s plans for an NHS pay deal “miserly and mean-spirited”.

“Pay is at the moment just about matching inflation, that’s all,” he added.

Mr McDonnell has called on the government to use its spring statement to end what Labour called an “immediate crisis” in public services.

But Mr Hammond vowed to “look at the numbers” in the autumn Budget.

He said: “Local authorities have done an incredible job in delivering efficiencies,” adding: “Of course they’re under some pressures”.


EU’s Tusk to lay down Brexit trade red lines

March 7, 2018


© AFP / by Danny KEMP | Close ties?: European Council President Donald Tusk will on Wednesday unveil draft guidelines for the bloc’s future relations with London, just days after British PM Theresa May spoke of a wide-ranging free-trade deal
BRUSSELS (AFP) – European Union President Donald Tusk will on Wednesday unveil draft guidelines for future ties with Britain, which are expected to warn London it cannot have completely free trade after Brexit.Days after British Prime Minister Theresa May made a long-awaited speech setting out London’s terms, Tusk will present his plans at a press conference with Luxembourg premier Xavier Bettel.

The leaders of the remaining 27 EU states must then approve the guidelines at a Brussels summit on March 22, setting the template for EU negotiator Michel Barnier in trade talks that could start as soon as April.

Tusk warned last week that Britain’s self-imposed conditions for leaving the European Union — that it must quit the single market and customs union — made “frictionless” trade impossible.

“Everyone must be aware that the UK red lines will also determine the shape of our future relationship,” Tusk said, adding that the EU viewed Britain’s restrictions “without enthusiasm and without satisfaction”.

“I want to stress one thing clearly. There can be no frictionless trade outside of the customs union and the single market. Friction is an inevitable side effect of Brexit, by nature,” the former Polish premier added.

The European Parliament — which will have the final veto on any Brexit deal — is set to publish its own demands for trade talks later on Wednesday in Brussels.

The EU has repeatedly called on Britain to lay out its position on a trade deal after it leaves the union in March 2019, and Tusk recently said he would publish the guidelines whether Britain was ready or not.

– ‘Hard facts’ –

May used her speech last week to call for a wide-ranging free-trade deal with the EU, while acknowledging it was time to face “hard facts” about the economic consequences of Britain’s shock 2016 vote to leave.

She said she wanted the “broadest and deepest possible agreement, covering more sectors and co-operating more fully than any free trade agreement anywhere in the world today”.

But the remaining 27 EU countries have vowed to resist all British attempts at “cherry-picking” — getting special treatment for Britain’s financial services and car industries — without the obligations and costs of membership.

A political declaration on future relations will be attached to the Brexit divorce agreement between Britain and the EU, which Barnier wants in place by November at the latest.

Any actual trade deal will have to wait until after Brexit day on March 29, 2019.

The EU’s free trade agreements with Canada, South Korea and Japan are the most likely model, Barnier said.

But huge hurdles lie ahead.

The Brexit withdrawal treaty is itself mired in difficulties, with London saying the EU’s official legal text of the preliminary divorce agreement they made in December makes unacceptable demands on the Irish border.

Barnier meanwhile warned that a planned post-Brexit transition period lasting until the end of 2020 — which leaders had been expected to approve at the March summit — was also at risk due to disagreements with London.

Britain would follow EU law during the transition in exchange for access to the single market, although losing its decision making powers.

Further doubts over whether the transition period will be long enough to negotiate a full trade deal — the EU-Canada agreement took seven years to craft — are also growing.

by Danny KEMP