Posts Tagged ‘Philip Hammond’

UK Chancellor Philip Hammond warns that technological innovation cannot leave younger generation behind

May 23, 2018

Chancellor Philip Hammond delivered a speech at the annual Confederation of British Industry (CBI) dinner last night, where he outlined plans for the Tory government to deliver a Brexit that hinged on a technology-driven economy. Part of this will see the government consider how it can help businesses adopt new digital technologies.

However, Hammond also raised concerns about the younger generation being attracted to ideas that seem ‘radical’ – presumably a recognition that younger voters are flocking to the left-leaning opposition party in droves – and as such this future technology-focused economy should not leave them behind.

Image result for Philip hammond, Photos

The speech covered the usual Brexit ground – focusing on the spat over the customs union, where Hammond said that he did not agree with CBI that staying in a customs union with the EU was necessary to deliver the government’s ambitions of avoiding frictions and growing British exports.

The Chancellor also outlined the government’s Industrial Strategy, where he said that the government is creating an environment where “innovation can flourish”. He said:

And we’re putting our money where our mouth is…

…we’ve committed to the largest increase in public R&D spending in three decades, as part of our ambition to raise R&D investment across the economy to 2.4% of GDP.

We’re investing £640 million of public money in artificial intelligence and over £1.7 billion in autonomous and ultra-low emission vehicles…

…and in the Budget last Autumn I launched a plan to unlock over £20 billion of patient capital, for the UK’s most innovative firms to grow to scale.

Then there were the usual platitudes paid to investments in fibre broadband, which frankly, we are getting a bit tired of hearing (given that the Department for Digital, Culture, Media and Sport rolls them out every few months to grab some headlines). On this occasion, Hammond has committed to ensuring that 15 million properties will have access to full fibre to the premise broadband by 2025. We remain pessimistic on this one…

Review into business productivity

However, beyond the Brexit and fibre broadband comments, Hammond did reveal that the Tory government is also conducting a review into how it can best get business to adapt its management practices and adopt digital technologies, in a bid to boost productivity. Some £5.6 million will be invested to support this.

Research from the CBI suggests that by encouraging more businesses to adopt digital tech – such as cloud computing, mobile technology and e-purchasing – the UK economy could receive a £100 billion boost and see a 5% reduction in income inequality.

The Business Productivity Review Call for Evidence is now open until 4 July 2018 and the government is encouraging businesses, trade associations and other interested parties to contribute their views to it. More information can be found here.

The review was announced in partnership with Business Secretary Greg Clark, who said:

For centuries Britain has been a nation of discoveries, but these ideas haven’t always been commercialised in the UK and new ideas applied in practice.

Now our modern Industrial Strategy is ensuring that firms across the UK can take advantage of leading technologies and management practices, potentially adding £100 billion to the economy and boosting people’s earning power right across the country.

Don’t forget the youth

However, what was most interesting about Hammond’s speech was the recognition that the current economy – and the direction it is headed – remains uninspiring and creates tough circumstances for the younger generations. Again, this could be a political ploy given that younger voters are more likely to vote for Labour, the opposition party, which has made strong claims about state-backed support.

But it is equally likely to be a recognition that if the Tory government want to continue to pursue a liberal economic model, backed by advanced technology and automation, then it needs to work for the youth too. Hammond said:

And some of a younger generation will be tempted by ideas that sound radical; maybe even “new” (even though they are rooted in a book written in the 1860s). Because they do not feel the system is working for them. Many of them have started their working lives at a difficult time for our country, emerging into the workforce as the financial crisis and its aftermath shook our system and enduring a decade of recovery from it.

They look at their parents’ and their grandparents’ generations, at the home ownership levels, the defined benefit pensions, the traditional jobs, and they ask who or what decreed that so many of the things that previous generations took for granted, should be so much harder for them to obtain.

They are not looking for a hand-out, but they are looking for a reassurance that hard work will allow them, too, to achieve their aspirations for a better life for their kids.

And as we look forward to, and prepare for, the transformational impact that technology will have on our economy and our society…we must answer their challenge.

Hammond said that the government must articulate how it can refresh the country’s economic model to respond to technological change in competition policy, in taxation policy, and in ensuring an equitable distribution of the proceeds of growth as we manage the impact of automation and AI. These all need to address the concerns of the youth, he said. Hammond added:

[We must articulate this] wiith solutions, which are framed not by the stale ideologies of the past, but by the exciting potential of our future.

Solutions that build on, not undermine, the liberal market economy that is the bedrock, not only of our prosperity, but of our freedom too.

Image credit – Image sourced via GOV.UK


Theresa May promised Global Britain, and now Brexiteers want her to deliver

May 15, 2018

Theresa May is sitting down with her cabinet colleagues again this afternoon in the hope of getting some clarity over the post-Brexit customs arrangements British officials should pursue with the European Union.

By Asa Bennett
The Telegraph
15 MAY 2018 • 12:46PM

Philip Hammond, U.K. chancellor of the exchequer, left, Greg Clark, U.K. business secretary, center, and Liam Fox, U.K. international trade secretary, sit in the audience for the speech of U.K. Prime Minister Theresa May on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 25, 20

Liam Fox looks on as his Brexitsceptic colleagues Greg Clark and Philip Hammond catch up CREDIT:JASON ALDEN /BLOOMBERG 

The potential for progress is going to be limited, given that ministers had not got very far last night in their attempts to improve and refine the existing proposals. Stagnation would be representative of the state of play for the wider Brexit talks, with Michel Barnier declaring “little” progress has been made since March and that there was a “risk of failure” due to areas like the Irish border question.

That can only be frustrating for the prime minister, as her Irish counterpart has…

Read the rest:

Theresa May faces Cabinet split over customs deal ahead of crunch vote that could determine her future

April 24, 2018

Boris Johnson and Philip Hammond

Boris Johnson and Philip Hammond

The Telegraph
23 APRIL 2018 • 9:30PM

Theresa May will face a Cabinet split over a customs deal with the EU when she meets senior ministers on Tuesday ahead of a key Commons vote next month that could determine her future as leader.

Eurosceptic Cabinet ministers including David Davis, Liam Fox, Michael Gove and Boris Johnson are expected to warn the Prime Minister that she must abandon plans for a customs partnership amid fears it could pave the way for a significant climbdown over Brexit.

However Philip Hammond, the Chancellor, and other leading pro-European Cabinet ministers will argue that it is “premature” to abandon any of the Government’s proposals for a customs deal with the EU at a time when negotiations with Brussels have…

Read the rest (Paywall):


Theresa May rejects calls for confidence vote on customs union

Eurosceptics urge prime minister to force MPs into line on key Brexit issue
Image result for Jacob Rees-Mogg, photos
The Eurosceptic MP Jacob Rees-Mogg dismissed the idea of tying the customs union to a confidence vote in Theresa May

Laura Hughes and George Parker in London

Theresa May’s office rejected calls on Monday for the prime minister to stake her position as prime minister on Britain’s departure from the EU’s customs union after Brexit.

Eurosceptic MPs, who fear that Mrs May will be defeated by Conservative rebels on what they see as a key part of Brexit, said the prime minister should force MPs into line by calling a vote of confidence on the issue.

The brinkmanship came after the House of Lords voted to amend the EU Withdrawal Bill to require the government to try to stay in the customs union.

This would help avoid a hard border in Ireland, since customs union members do not impose internal trade tariffs on each other. But it would also stop the UK from having an independent trade policy, a core demand from Eurosceptics. On Monday, Boris Johnson, the foreign secretary, refused to be drawn on whether he would resign if parliament voted to remain in the customs union.

One Eurosceptic Tory MP said: “It has to be a confidence motion and if the government doesn’t reject the amendment then we could see a general election.”

“Someone is going to have to blink first. If she doesn’t have that confidence vote and we lose the customs union vote next month, the letters calling for a leadership contest will start flying in,” he added.

Andrew Rosindell, the MP for Romford, added: “The PM must stand firm, this is a matter of confidence for the whole party and we cannot let the British people down. Voting against the PM’s clear position against being in a customs union or sending in letters to undermine her would be a betrayal.”

Jacob Rees-Mogg, the head of the Eurosceptic European Research Group of Tory MPs, dismissed the idea of tying the customs union to a confidence vote in Mrs May. “I try to avoid calling on the government to do something that is idiotic,” he said.

One aide to a Cabinet minister said Mrs May’s office was considering whether to call for a confidence vote. “It’s not a silly thing to do and I know its been discussed,” the person said.

There’s increasing evidence that it [leaving the customs union] isn’t going to be possible. We’re going to have to make a difficult choice

Mrs May’s spokesman said it was an “absolute mystery” where the idea had come from. He added: “We are leaving the customs union, we will have an independent trade policy and we will strike trade deals around the world.”

He added that the government was still proposing either of two models with the EU after Brexit — a customs partnership or a highly streamlined customs arrangement.

“Both of the two options can provide solutions to the Irish border and to having a smooth customs relationship with the EU,” he said.

Ken Clarke, the veteran pro-EU Conservative MP, told BBC Radio 4’s Today programme on Monday that the customs union issue had “suddenly become panic of the day among the apparatchiks in Downing Street”.

“Over the weekend I read briefings from Downing Street, allegedly, and others informed about what was going on, that they were going to move on the whole question of the customs arrangements,” he said.

“Today it’s all frightfully important, a matter of confidence, whatever that means.”

There was also suspicion among Eurosceptic MPs that Michael Gove, the environment secretary, was positioning himself as a moderate voice among the Brexiters around the Cabinet table, after acknowledging that Mrs May would struggle to secure a majority for leaving the customs union.

On Thursday, there will be a symbolic vote in the House of Commons, prompted by the Lords’ amendment, which could encourage Conservative rebels further.

Dominic Grieve, the pro-EU former attorney general, said he did not expect “finality” on the customs union until the autumn, when Mrs May brings her final Brexit deal to parliament.

He said that while staying in the customs union “isn’t perfect”, it was up to the government to show there were alternative ways of providing frictionless trade. “There’s increasing evidence that it isn’t going to be possible,” he said. “We’re going to have to make a difficult choice.”

Another pro-Europe MP said Julian Smith, the Conservative chief whip, had assured the rebels that their amendment would not be used as a vote of confidence.

“It says a lot that rather than concentrate on making the argument or putting more meat on their proposed alternatives, they are throwing around threats that are clearly empty,” said the MP.

Mrs May suffered a further parliamentary defeat in the Lords on Monday night after peers voted to keep the majority of the EU’s Charter of Fundamental Rights in British law after Brexit.


Threat to fintech industry as young coders shun London over Brexit — “Tech workers don’t actually want to live in the UK any more.”

April 4, 2018

Financial Times (FT)

Traffic passes around the Old Street roundabout, also referred to as ‘Silicon Roundabout,’ in the area known as ‘Tech City’ at dusk in London.  Photographer: Chris Ratcliffe/Bloomberg
By Martin Arnold, Banking Editor
British financial technology companies are worried that Brexit is causing a shortage of software engineers and pushing up salaries in the sector, prompting some of them to open offices elsewhere in the EU.

Mike Laven, chief executive of Currencycloud, said that the UK-based payments company was planning to open an office in another EU city — probably Amsterdam — because of fears that recruitment problems in London could hamper its growth.

The loss of London’s allure for young European software coders could threaten the government’s ambition to maintain the UK’s position as the continent’s dominant hub for the fast-growing fintech sector after Brexit.

Mr Laven said: “We think the market for engineers has tightened and I think engineering salaries are going up. I think we are seeing not so much people leaving but not the influx that we had before . . . I think that is a threat to the industry.

“We need a massive amount of engineering talent on a global basis,” said the head of Currencycloud, which provides cross-border payments services to other businesses, including many fintechs. “If we can’t have all those jobs based here, then we will actually have to put those jobs someplace else.”

He said the evidence of rising salaries for software engineers was so far “anecdotal and by the time we have the real data it will be too late”, while adding: “I’ve shared that with a couple of other people and they find the same thing.”

While many banks are worried about the regulatory aspect of Brexit, the biggest concern for many fintechs is that their access to skilled workers from Europe will be reduced if immigration is restricted after the UK leaves the EU in March 2019.

“It is just a people thing. I think on the regulatory side we will figure it out,” said Mr Laven. “We understand passporting, regulation and compliance and it will cost us money, but we will sort that out. To me, the London fintech issue is more around having the right people and having very easy access to that.”

To me, the London fintech issue is more around having the right people and having very easy access to that.

Mike Laven, chief executive of Currencycloud

Michael Kent, founder and chief executive of digital payments provider Azimo, told the FT recently: “My big problem is that a lot of young people who are tech workers don’t actually want to live in the UK any more, so we have got people drifting towards places like Berlin, places like Barcelona, places like Lisbon.

“There are not an awful lot of reasons if you are a young tech millennial to be in London with the exception of it is where the work is, and if the work drifts away you might see quite a big impact,” said Mr Kent, adding that Azimo was assessing various cities to create a new EU hub.

Last year, TheCityUK lobby group called on the government to introduce a new “digital skills visa” to shore up the UK’s position as a fintech hub against a growing threat from rival cities. The government has promised a special post-Brexit travel regime for bankers and other professionals, but details are hazy and it is unclear if it will include fintechs.

There have also been worries that the Brexit vote could hit investor confidence in the UK’s nascent fintech sector and cause funding to dry up for some start-ups. But those fears have so far failed to materialise. British fintechs raised $1.8bn of venture capital investment last year, up more than 150 per cent from 2016, according to Innovate Finance, the UK fintech trade body.

“I do not think it actually takes away from London,” said Anne Boden, founder of digital lender Starling Bank, adding: “It is sad, and I think London will be threatened, but London will survive.” She said that Starling had “already passported into Ireland” and may need to do more of its business from Dublin because of Brexit.

Several of the UK’s other leading fintech companies have also warned they will need to open an alternative EU office because of Brexit, including TransferWise.

Last month, chancellor Philip Hammond announced several measures to ensure the UK remained “the best place in the world” for fintech companies, including appointing fintech envoys for England, Northern Ireland and Wales and boosting funding for the British Business Bank.

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”.

Labour: Jeremy Corbyn to pile pressure on Theresa May with customs union policy shift

February 26, 2018

The Prime Minister is scrambling to agree Britain’s approach to the future relationship with the EU by Friday

By Lizzy Buchan Political Correspondent
The Independent



Jeremy Corbyn will today create a clear Brexit dividing line between Labour and the Tories in a keynote speech which will see him finally commit to keep the UK in a European customs union.

The Labour leader will argue the move would enable his party to secure “full tariff-free access” to the single market but without committing to all of its rules, allowing him to negotiate exemptions on freedom of movement and workers’ rights.

The move ends months of speculation about Mr Corbyn’s stance on the issue, which goes to the heart of the debate about Britain’s future.

It also simultaneously heaps pressure on Theresa May as pro-EU Tory rebels are poised to join Labour and force her to keep the UK in the customs union.

The Prime Minister is scrambling to agree Britain’s approach to the future relationship with the EU by Friday, as Brexiteers also threaten her leadership from the right, if she fails to seek a deal that allows the UK to agree trade deals – something staying in the customs union would preclude.

In a much-anticipated speech in Coventry, Mr Corbyn will say: “Britain will need a bespoke relationship of its own. Labour would negotiate a new and strong relationship with the single market that includes full tariff-free access and a floor under existing rights, standards and protections.

“That new relationship would need to ensure we can deliver our ambitious economic programme, take the essential steps to upgrade and transform our economy, and build an economy for the 21st century that works for the many, not the few.”

Mr Corbyn will add: “We cannot be held back, inside or outside the EU, from taking the steps we need to support cutting-edge industries and local business, stop the tide of privatisation and outsourcing or prevent employers being able to import cheap agency labour from abroad to undercut existing pay and conditions.”

It comes after Shadow Brexit Secretary Sir Keir Starmer suggested that Labour would join forces with Tory rebels to force Ms May to put membership of the customs union back on the table.

The Labour leader will also promise to use funds returned from Brussels after Brexit “to invest in our public services and jobs of the future, not tax cuts for the richest”.

His speech is likely to disappoint those in the party who favour a softer Brexit, as a group of more than 80 MPs, peers and union leaders told Mr Corbyn that Labour would “never be forgiven” if it backed leaving the single market.

The alliance, including prominent Labour figures such as Chuka Umunna and Lord Kinnock, warned that the move would risk a “multi-billion pound hit to the public finances” and make the party’s manifesto plans for schools, hospitals and social care unaffordable.

Responding to the speech, Mr Umunna welcomed moves to put “clear red water” between Labour and the Tories but warned that the only way to retain the benefits of the single market and the customs union – and to avoid a hard Irish border – was to stay in both agreements.

He added: “It is the best anti-austerity policy too because it avoids a huge negative impact on revenues to the Exchequer if we Brexit.”

Liberal Democrat Brexit spokesperson Tom Brake said Labour’s plans to protect jobs were a “meaningless and totally undeliverable soundbite” if Britain leaves the single market and urged Labour to change course.

He said: “If Jeremy Corbyn carries on down this path of ‘having your cake and eating it’, it would be another betrayal to those who believe that strong public services have to be underpinned by a strong economy, and Britain staying in the single market and customs union is crucial to that.”

Ms May faces a challenging week, ahead of a major Brexit speech on Friday where she is expected to outline long-awaited plans for Britain’s future relationship with the EU.

She will also host a special Cabinet meeting on Thursday to ensure her top team are behind the plans, following months of in-fighting between Eurosceptics led by Boris Johnson and Michael Gove, and Philip Hammond’s pro-EU allies.

It comes amid reports several senior ministers have warned her that Tory rebels could bring down the Government if they joined forces with Labour to block her plans to take Britain out of the customs union.

However, Ms May struck an upbeat note, saying: “Delivering the best Brexit is about our national future, part of the way we improve the lives of people all over the country.

“If we get them right, Brexit will be the beginning of a bright new chapter in our national story, and our best days really do lie ahead of us.”


UK ideas on post-Brexit ties are ‘pure illusion’, EU’s Tusk says

February 23, 2018


Image may contain: 1 person

European Council President Donald Tusk

BRUSSELS (Reuters) – European Council President Donald Tusk on Friday dismissed as “pure illusion” the ideas floated by Britain so far on what sort of relationship it would want with the European Union after it leaves the bloc.

Tusk said he hoped to get more clarity when he meets Theresa May next Thursday, a day before the British prime minister is due to deliver a speech to outline London’s vision of its future ties with the EU.

“I am glad that the UK government seems to be moving towards a more detailed position,” Tusk told journalists after 27 EU leaders – all apart from May – met in Brussels on Friday.

“However … I am afraid that the UK position today is based on pure illusion. It seems like the ‘cake’ philosophy is still alive. From the very start it has been a key clear principle of the EU 27 that there can be no cherry-picking and no single market ‘a la carte’.”

British Foreign Secretary Boris Johnson has said he wants Britain to get the best of both worlds – to “have its cake and eat it”.

EU leaders have long been asking May for details of London’s vision for future relations, but she has been hampered by divisions within her ruling Conservative Party, with some backing close trading ties and others seeking a “clean break”.

Tusk said the remaining 27 EU states would adopt their joint stance on that in March, whether London provided input or not. Tusk said the bloc would be “extremely realistic in our assessment of possible new proposals”.

Dutch Prime Minister Mark Rutte, who saw May this week, echoed those comments in talking to reporters separately after the Brussels meeting.

“I made it clear to Theresa May that I believe it is crucial for the UK to set out its position on the transition, on issues like the Irish border, and particularly on the future relationship,” he said.

“We don’t like cherry-picking, so it will be difficult to come to a bespoke deal along the lines that some in the UK are suggesting.”

Additional reporting by Samantha Koester and Philip Blenkinsop; Editing by Kevin Liffey


Theresa May expected to set out Brexit plan Friday after Cabinet agreement at Chequers

February 23, 2018


© AFP/File / by Alice RITCHIE | British Prime Minister Theresa May is under pressure to set out more details of her position before talks get underway on the future partnership in April, with Brussels warning Britain cannot have everything it wants
LONDON (AFP) – Prime Minister Theresa May will make a speech next Friday on Britain’s relationship with the EU following Brexit after her cabinet agreed a plan at a marathon meeting, her spokesman said.One minister who was not present said they had agreed Britain would seek to align itself with European Union rules in certain sectors of the economy, but will retain the right to diverge.

May is under pressure to set out more details of her position before talks get underway on the future partnership in April, with Brussels warning Britain cannot have everything it wants.

The prime minister gathered around a dozen of her senior Cabinet colleagues for eight hours of talks at her country retreat Chequers on Thursday, in a bid to thrash out their considerable differences.

Foreign Secretary Boris Johnson, who has called for a clean break with Brussels, and Finance Minister Philip Hammond, who favours closer ties, were among those present.

“It was a very positive meeting and a step forward, agreeing a basis of the prime minister’s speech on our future relationship,” the spokesman said.

“The prime minister will be setting out more detail of the government’s position on Friday,” he added on her upcoming address.

Health Secretary Jeremy Hunt, who did not attend the gathering, said Britain would not be part of a customs union with the EU because it wanted to be able to agree trade deals beyond the bloc.

“It’s one way of getting frictionless trade but it’s not the only way,” he told BBC radio.

He acknowledged “divergent views” among ministers, but said: “The central common understanding is that there will be areas and sectors of industry where we agree to align our regulations with European regulations.

“The automotive industry is perhaps an obvious example because of supply chains that are integrated.

“But it will be on a voluntary basis, we will as a sovereign power have the right to choose to diverge, and what we won’t be doing is accepting changes in rules because the EU unilaterally chooses to make those changes.”

– Labour sets out plan –

The full Cabinet will discuss the plans, likely at their regular weekly meeting on Tuesday, before May makes her speech.

The address is expected to take place somewhere in Britain, after recent big Brexit speeches in Munich, Germany, and Florence in Italy.

A few days before, on Monday, opposition Labour leader Jeremy Corbyn is expected to set out his party’s vision for Brexit, with growing speculation he could call for maintaining some kind of customs union with the EU.

Any deal agreed with Brussels would have to be passed by the House of Commons, where May’s Conservatives have only a slender majority.

The prime minister has pledged to leave the EU’s single market and customs union, as she seeks to end free movement of migrants and the jurisdiction of the European Court of Justice.

But EU chief negotiator Michel Barnier has warned that these freedoms will come at a cost of “unavoidable” barriers to trade.

Members of the EU’s customs union — the bloc’s 28 states plus Turkey, Andorra, Monaco and San Marino — agree common customs duties, import quotas and other rules in return for allowing goods to move freely through the area.

Remaining in a customs union would resolve concerns about the return of checks on the border between EU member Ireland and Northern Ireland, part of Britain.

But members of the customs union are precluded from signing their own independent trade deals, something many eurosceptics in Britain highlight as a crucial benefit of Brexit.

by Alice RITCHIE



UK bid to agree Brexit line faces EU scepticism

February 23, 2018


May’s aim for cabinet unity around ‘Canada plus’ model unlikely to impress Brussels

The UK prime minister faces a fundamental dilemma: avoiding flare-ups at home may only store up trouble in Brussels © FT Montage/AFP/Getty

By Alex Barker and Jim Brunsden in Brussels and George Parker in London
Financial Times (FT)

Theresa May on Thursday night hammered out a British strategy for future ties with the EU — but was warned by a fellow European leader over the way ahead even before a Brexit Cabinet meeting had begun.

Meeting the British prime minister in Downing Street on Wednesday, 24 hours before the Chequers summit, Mark Rutte, Mrs May’s Dutch opposite number, urged her to ditch the idea of a “three baskets” trade deal.

This idea, floated by Mrs May in the past, seeks to divide a post-Brexit order into three areas; one where the UK maintains the same regulation as the EU; another where it uses rules of its own for the same outcomes; and a third where the UK takes a fundamentally different approach.

“It would be better to say nothing at all,” Mr Rutte said, according to officials familiar with Wednesday’s meeting.

His blunt assessment captures the fundamental dilemma facing Mrs May as she seeks to unify her government around a common line: avoiding flare-ups at home may only store up trouble in Brussels.

For Mr Rutte and other EU27 leaders, the onus is on Mrs May to set out a credible plan that is “clear” and free from hybrid constructions that mask an unwillingness to make choices.

“One has to accept the costs [of different models],” said one senior EU diplomat. “There is a tendency in the UK for politicians to mention lots of different specifics they would like. What we want is coherence, realism. I’m not saying it is easy.”

A senior French official said: “We don’t need lots of details. The issue is: can the UK government simply say they want a free-trade agreement?”

Some British ministers also favour a more conventional free-trade deal rather than a broader accord with Brussels.

On Wednesday the European Commission circulated a 58-page document to EU27 member states making it plain that whatever compromise were agreed at Chequers, it was unlikely to fly.

Preserving the integrity of the single market excludes sector-by-sector participation

It includes a “staircase” chart that shows how, if Mrs May sticks to her negotiating red lines, the only option available is a traditional, unvarnished free-trade agreement along the lines of the EU deals with Canada and South Korea.

More worrying for British officials, it also suggests that even bending the UK’s position on respecting the rulings of European courts would not alone be enough to secure privileged single-market style access in areas such as aviation.

That requires the full EU’s full regulatory “ecosystem”: the institutions enforcing and supervising compliance and developing law. Meeting high regulatory standards is necessary but not sufficient.

The paper reinforces the strong view that Britain cannot cherry-pick single market membership in certain sectors. It says: “Preserving the integrity of the single market excludes sector-by-sector participation.”

Michel Barnier, the EU chief negotiator, has also pointed out that no trade deal in the world has a big section on the financial services sector.

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Brexit negotiator Tim Barrow will give a taste of how the EU might respond to Britain’s demands © Reuters

For the Remain faction in Mrs May’s Brexit negotiation cabinet committee, led by Philip Hammond, the chancellor, an agreement based on the Canada trade agreement is not ambitious enough and he will continue fighting for a better deal.

Parliament will have a much bigger voice in the final outcome than some people think

Pro-Remain minister

Mr Hammond argues that Britain must have a much closer relationship, including some kind of customs union with the EU. “Hammond always says in cabinet it’s the only way we can start to address the Irish border question,” says one minister.

While many EU countries would be eager to maintain a customs union with Britain, Mrs May will find it difficult to keep the option open without enraging Brexiters.

Jacob Rees-Mogg, the leading Tory Brexiter, wrote in The Daily Telegraph on Thursday that Northern Ireland was “an imaginary problem” being presented by Remainers as to an “impassable obstacle to a genuine Brexit”.

However, Remainers believe that even if the Irish border question does not propel Mrs May towards a softer Brexit, she may be forced to do so by parliament, with pro-European Tories and Labour privately working together to keep Britain in a customs union.

“Parliament will have a much bigger voice in the final outcome than some people think,” said one pro-Remain minister.

By the time the ministerial cars headed down the Chequers driveway on Thursday night, Mrs May had cobbled together a delicate cabinet position on Brexit; whether it can survive contact with the reality of Westminster and Brussels politics is a much bigger question.

Bank of England Signals Faster Rate Rises, Boosting Sterling

February 8, 2018

Central bank keeps rate unchanged

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LONDON—The Bank of England said Thursday that it expects to raise interest rates in the U.K. at a swifter pace than it anticipated last year, responding to stronger growth in the global economy.

The BOE’s message comes as investors worry that more rapid growth could fuel higher inflation and a more aggressive response from global central banks. Those worries have helped prompt selloffs in world financial markets this week.
BBC News

Bank of England hints at earlier and larger rate rises

Bank of England Governor Mark Carney

The Bank of England has indicated that the pace of interest rate increases could accelerate if the economy remains on its current track.

Bank policymakers voted unanimously to keep interest rates on hold at 0.5% at their latest meeting.

However, they said rates would need to rise “earlier” and by a “somewhat greater extent” than they thought at their last review in November.

Economists think the next rate rise could come as soon as May.

The value of the pound initially jumped almost 1% against the dollar, but fell back to about 0.5%.

Higher interest rates have an important effect on households and the economy.

Around 8.1 million UK households have a mortgage, and of those almost half are on either a standard variable rate or a tracker rate.

Interest rates on those types of mortgages would be likely to match any increase in official rates made by the Bank of England.

But for savers a move higher by the Bank of England could be a bonus, as High Street banks generally have to raise their rates of interest.

UK interest rate graphic

In November, the Bank raised the cost of borrowing for the first time in more than 10 years – from 0.25% to 0.5%.

Its forecasts at the time indicated there could be two more increases of 0.25% over three years.

But it now appears there could be a third increase and those rises could be sooner than expected.

“The Committee judges that… monetary policy would need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than anticipated at the time of the November report,” minutes from the Monetary Policy Committee’s (MPC) meeting said.

The Bank noted that the global economy was expanding at the fastest pace in seven years and that the UK was benefiting from that growth.

It also thinks that UK wage growth will start to pick-up, giving the economy a further boost.

As a result, the Bank has raised its growth forecast for the UK economy to 1.7% this year, from its previous forecast of 1.5% made in November.

But it says its forecasts are based on a “smooth” adjustment to Britain’s departure from the European Union.

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Analysis: Kamal Ahmed, BBC economics editor

Today the Bank signalled that the old conventions of increasing interest rates when inflation is above target would return.

The cost of mortgages is likely to rise and savers at last will see returns improve.

The economy is stronger, the Bank has made clear today.

But not everything in the garden is rosy.

It points out that the UK economic engine still “remains restrained by Brexit-related uncertainty” which is “the most significant influence on the economic outlook”.

We are driving along with the hand brake half on.

Growth is modest by historic standards and the UK has gone from the fastest growing economy among the G7 largest global economies to the slowest.

Read Kamal’s blog in full

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Perkier economy

Official figures last month showed that the economy grew 0.5% in the last three months of 2017, which was faster than economists had been expecting.

Unemployment remains low at 4.3% and inflation edged lower in December to 3%.

The Bank also released the letter sent by governor Mark Carney to the Chancellor of the Exchequer, Philip Hammond, to explain why inflation had breached the target rate of 3% in November.

In the letter, Mr Carney said that higher inflation was “almost entirely” due to the effects of a rise in the prices of imports, caused by the fall in the pound’s value after Britain voted to leave the European Union.

The chancellor replied by stressing the importance of boosting UK productivity and the government’s efforts to make that happen.