BOJO "SUPPORTS FREE MOVEMENT"

BoJo, in yet another gaffe, has apparently told a number of EU ambassadors that he personally supports the free movement of people (HERE) in Europe. This will come as no surprise to anyone who listened to him before the vote but Mrs May might be a bit miffed since it is of course totally opposite to government policy and even a red line in the forthcoming negotiations.

But then again, who believes a word that comes out of Bojo's mouth?

He is also facing criticism over an official visit to Serbia where he spent time promoting his own book in a Belgade book store and signing copies of it (HERE). 

How long can the fool last?

LEGAL CHALLENGE LATEST

The Supreme Court sits next week to hear the government's appeal against the divisional court's findings October. There is an update on the People's Challenge website (HERE) and it seems god news. The government has "doubled down" and is not really present any new arguments but it remains to be seen what happens.

Meanwhile one legal expert thinks the government might lose 11-0 in the Supreme Court (HERE).

And in a note at the end of the update, lawyers acting for Gina Miller says the government is also likely to lose any legal challenge to the fact they don't intend to trigger Article 127 of the EEA Agreement and believe that leaving the EU automatically means we leave the EEA. If they're wrong and parliament is involved, they may not be able to get a majority to take us out of the single market.

What a mess it all is.

NISSAN AND THE UK CAR INDUSTRY

Last week, the OBR confirmed that The Treasury had declined to say if there were any costs to be considered against the still secret Nissan deal with Mrs May (HERE).  The EU have also confirmed they are yet to receive details of the arrangement. It will be interesting to see if we ever provide any details.

The SMMT (Society of Motor Manufacturers and Traders) says tariffs could add £1500 to the average price of each imported car (HERE).

Now Ford are saying today that for them securing free trade between the EU and the UK is a "top priority" (HERE).  The car industry is becoming a key player in brexit and if David Davis does not get a free trade deal or a transitional arrangement after we exit the single market it could end up costing us a fortune in support and lost jobs, sales and exports.

PEOPLE ARE BARGAINING CHIPS

On Monday, a cross-party group of 80 MPs wrote to Donald Tusk, President of the European Council urging him to reach an early agreement about the plight of EU nationals living here and UK nationals living in the EU.

Not surprisingly, he has written back (HERE) saying the uncertainty is not the fault of the EU but the people who voted for brexit. He also says until we leave the EU the rights of all citizens is guaranteed by treaty.  I particularly like this from Mr Tusk:

"Would you not agree that the only source of anxiety and uncertainty is rather the decision on Brexit? And that the only way to dispel the fears and doubts of all the citizens concerned is the quickest possible start of the negotiations based on Art. 50 of the Treaty?"

I am not sure why anyone is surprised since this is the position of Mrs Merkel as reported after a meeting with Theresa May on November 18th (HERE).

Tusk knows that once Article 50 is triggered everything is stacked against us.  Oh well, prosper like never before!

BREXIT POLLYANNAS

Nick Cohen has a good piece in The Spectator (HERE). Ian Dunt has written a book - Brexit:What the hell do we do now, and in it mentions what civil servants tell businessmen waiting to meet David Davis. Apparently, they are warned not to say they are worried about leaving the single market but to appear enthusiastic about the “opportunities” that Brexit brings.

I have met people like this. No matter how ridiculous their plan, it is virtually impossible to point to any potential problems. Anyone with the temerity to suggest an obstacle is pronounced to have negative thoughts and ignored or cast out. It is all reminiscent of a communist mindset where even those who could see disaster looming say nothing or become cheerleaders for certain catastrophe.

None of this bodes well for Brexit. 

It follows reports (HERE) of an aide leaving Davis' department carrying hand written notes that seemed to show the government’s negotiating position. This is apparently to “Have cake and eat it”. I think this just about sums up the government's position after five months of careful consideration!

ANOTHER LEGAL HEADACHE FOR DAVID DAVIS

A new development today. Lawyers for British Influence , a pro EEA think tank, are suggesting that the UK is a member of the EEA in its own right and will need to withdraw from this area separately using article 127 of the EEA agreement (HERE). This is not difficult since it seems only to involve giving notification 12 months in advance, although I'm sure there is more to it than that. Having looked at the agreement it is clear that we (the UK) are listed as one of the contracting parties, separately to the EU, so I can see a legal challenge succeeding on this.

The government’s problem is that they may not have a majority in parliament to withdraw from the EEA. This would cause an enormous row with brexiteers but I am not sure what they would be able to do about it.

Stunningly, on the BBC Today programme this morning, neither Nick Robinson or the person he was interviewing from British Influence seemed to know Switzerland is not in the EEA! They referred to the Swiss referendum on freedom of movement breaching EEA rules without mentioning or realising that the Swiss relationship is governed by a bilateral agreement and NOT the EEA rules. Amazing!

I assume this will play in to the Article 50 court case since if the government wins this they will argue the EEA treaty can be abrogated by royal prerogative without any parliamentary vote at all?

THE PROBLEMS PILE UP

First, the Irish PM Enda Kenny warns that two years is nowhere near long enough to negotiate a trade deal and there will need to be a transitional arrangement (HERE) dashing hopes of a "quickie divorce" beloved of the leave campaign.

Then Charles Grant, director at the think tank Centre for European Reform (HERE), said seeking a transition deal could delay key aims of May’s Brexit negotiations such as immigration controls and freedom from European court of justice rulings.

“May now understands the need for a transitional deal to cover the period between when the UK leaves the EU and when a new free trade agreement comes into effect, several years later,” he said.

“But reaching agreement on a transitional deal will be fiendishly difficult: the EU will insist that the UK accept free movement and European court of justice rulings during the transition, but that may be politically unacceptable for May. Some Brussels officials therefore think the talks may break down without agreement on a transitional deal.”

One senior Tory MP also told the Guardian that a transitional arrangement could prove politically very difficult to sell if it meant continuation of free movement into 2020 going into the next election.

The view about the difficulty of an interim deal was echoed in Germany, where officials have warned that agreeing on a transitional agreement may be as complicated and laborious as agreeing on a final Brexit deal.

THE £32 BILLION BREXIT DIVIDEND IS A MYTH - BBC

The BBC (HERE) have comprehensively debunked the suggestion from Change Britain - a Leave campaign pressure group - that there is a £32 billion "dividend" in the autumn statement.  There won't be any dividend and in 2019-20 instead of having an extra £13 billion we will need to borrow £14.7 billion MORE.

Of course, leavers will only see the headline and think it's true.  We really are in a post-truth world.

BORIS - A FOOL FOR OUR TIMES

A journalist from the EU, Jean Quatremer, has a hard hitting piece in The Guardian about Boris Johnson (HERE) who is described as a buffoon and one that has damaged irreparably what little goodwill we had left in Europe and made the negotiations far more difficult.

BoJo is taken to task for being a political clown and the writer also refers to another article about Johnson (HERE) describing the lies he wrote as a Telegraph correspondent in Brussels. It is almost impossible to overstate what Johnson has done to us, making himself and the nation a laughing stock across Europe.

What an idiot this man is.

WILL IT ALL BE WORTH IT?

The Spectator blog has an item about the OBR forecast and what the implications are for immigration. The OBR say this is likely to be reduced by 80,000 per year and Fraser Nelson says Brexiteers will be delighted bu this (HERE).  But hang on, the OBR also says this will cost the economy £16 billion a year by 2020 and the overall additional borrowing due to brexit is put at nearly £60 billion.

Think about this. 80,000 is about 0.12% of the population, a tiny number but the cost is £60 billion. In other words we are apparently happy to borrow about £750,000 for each immigrant who does NOT come to the UK. This is insanity given the immigration will probably taper off as time goes on in any case but we will be permanently poorer.  Will it be worth it?  I don't think so.

NISSAN - GOVT WILL NOT SAY WHAT THE COST MIGHT BE

Buzzfeed has noticed in the OBR report for the autumn statement (HERE) that government was specifically asked if there were cost implications in the deal with Nissan for the economy that the OBR needed to take account of in preparing their forecasts.

Apparently, rather than saying there were no cost effects the treasury "declined to comment". This is a bit different to the official position. I note also the EU is still waiting for details of the Nissan deal.

LEAVING THE EU - AN ACT OF FAITH?

To many leavers there is almost an evangelical faith in the benefits of life outside the EU. Criticise them or their lack of any kind of plan and expect a vitriolic attack on you and your patriotism. They are not completely unlike some religious fundamentalists who take the mildest criticism as a personal attack on them. 

The fact the economy is resilient is taken to mean there will be no problems at all - ever.  Ask about "prospering like never before" and they will point out we haven't left yet. In other words their vision will take some time while any downsides, if not immediately apparent, are taken as a huge positive and don't you try to claim otherwise.

Martin Kettle has written a thoughtful piece on exactly this topic in The Guardian (HERE) and it makes very interesting if slightly frightening reading. It's subtitled "Brexiteers will trash anyone who gets in their way".

EU STRATEGY BECOMES CLEARER

It is being reported (HERE) that the EU's chief negotiator has said they will negotiate in three tiers. Firstly the withdrawal agreement including the money to be paid to settle ongoing commitments and our share of the budget and assets. Secondly, the transitional agreement that follows our exit. And finally, the future trading relationship between us.

Unfortunately for David Davis, M Barnier says the first two can be conducted simultaneously but the final trade agreement cannot be negotiated until the first two have been agreed. This will delay our signing any other trade deals outside the EU and put a lot of pressure on our negotiators to get a good transitional arrangement.

Ben Wright the BBC Europe correspondent has a piece (HERE) explaining how difficult it might be to reach any amicable agreement. 

The Maltese PM speaking to the BBC (HERE) says the EU27 are united in holding the four freedoms as vital and saying we should not forget the EU parliament has a veto on any agreement.

BREXIT PROGRESS REPORT

After five months we are not really any closer to knowing what Brexit means in spite of Mrs May telling us over and over again. The nation is still completely divided. Remainers are in despair and leavers are angry, fearing betrayal. 

At least, if nothing else, with each passing week it becomes clearer how difficult Brexit is going to be. 

The difficulties are not made easier by the attitude of some of the high profile leavers. They began on June 24th stepping back from many of the promises made in the campaign which all proved worthless. As time went on and the whole economy didn't immediately tank, they criticised those who predicted Brexit would create huge economic problems, even though Article 50 had not and still has not been triggered. Then they attacked the legal challengers to the use of the prerogative and then the high court judges who agreed with the claimants. 

Recently, after the autumn statement, they attacked the OBR for giving too gloomy an assessment of the economic outlook and splits are beginning to appear in the conservative party (HERE)

One wonders what it is about the UK that leavers like – if anything?

RYANAIR

Michael O'Leary, the colourful CEO of Ryanair (HERE) addressed the Airport Operator's Annual Conference and lambasted the government for having no idea how to exit the EU. He told the  conference: “Britain has no negotiation position whatsoever. You file the Article 50 in March, you walk off a cliff in two years’ time".

He particularly single out Johnson, Fox and Davis, saying “If their IQ was one point lower they’d be plants”.

How true!

LEAVERS MOUNT A THIN PROTEST

Reuters reported earlier this week that protesters had gathered outside parliament to urge Mrs May to "get on with it" - the triggering of Article 50 - (HERE) and giving a figure of about 200 people. 

Now, we learn from The Independent (HERE) that organisers had invited 15,000 and of that number, 2000 had said they would attend but in the final analysis, The Independent say fewer than 100 turned up.  What a lot of enthusiasm!

AUTUMN STATEMENT REACTION

Phillip Hammond's Autumn statement brought a mixed reaction.  Prominent leavers have dismissed the OBR forecasts as far too pessimistic while anti-brexit newspapers all focus on the £122Bn of extra borrowing over the next few years, £59Bn of which is said to have been caused directly by brexit (see The Independent's take HERE).

Alastair Darling in The Guardian says Mr Hammon has failed to set out a clear direction (HERE). John Longworth, former head of the CBI says the opposite (HERE). Infacts has take a leaf out of the leave campaign's playbook and used a weekly figure for the extra amount we will need to borrow to fund brexit - the £59Bn is shown as being £226 million a week (HERE).  How will Vote Leave react to that?

POOR LEAVE VOTERS WILL SUFFER

The World Bank's Chief Economist for Europe, Hans Timmer, says brexit is not going to help the poorer section of the community who voted for it overwhelmingly (HERE).

He also warned a lack of ideas on how to assist these voters creates the risk they’ll adopt more extreme views in the future. He said, “The changes that are in the making at the moment will not help these people. They haven’t lost their jobs because of immigration – or otherwise these jobs will still be there – but because of technology and globalisation, which the UK will still continue because they still want to be a part of the global trading system.”

I wonder what this section of the electorate will do when they realise they were conned?

NIGEL FARAGE AND "THE PEOPLE"

Sky News (HERE), The Guardian (HERE) and The Huffington Post (HERE) all cover Nigel Farage's bash at The Ritz with Aaron Banks, The Barclay brothers, Richard Littlejohn and all the wealthy brexit brigade celebrating Nigel's 20 years in politics and his stunning "success" in 2016. They all compare the expensive party with today's Autumn Statement spelling out the cost of brexit (£60Bn over 5 years) and the fact that it will be the poorest in society who will bear most of the costs.

Doesn't it make you sick?

BREXIT UNCERTAINTY AND GERMAN CARS

The chief of Germany's Automotive Industry Association (HERE) says uncertainty surrounding brexit could do damage to German investment in the UK where they have about 100 plants.  The BBC story about it is HERE.

Warning that the government was at a crossroads and had to decide soon which direction to take, Wissmann told the BBC: “We need, relatively soon, a clear answer … Will we have tariff and non-tariff barriers between Britain on the one hand and the European Union?”

Trade barriers would mean “a long period of uncertainties that will block future investments in Britain, and that makes me really concerned”, he said. “I hope that the British government … decides to go for the single market and not for any other regime which would need years to discuss and negotiate.”

WHO WOULD BE CHANCELLOR?

One has to feel some sympathy with Phillip Hammond. He has the autumn statement to make tomorrow and appeared on the political shows this weekend warning of the "eye watering" levels of debt (HERE) which I think is quite obvious.

In response he is attacked for his relentless negativity (HERE) by those leavers who are blind to every problem and will only accept a sudden, abrupt and damaging exit from the EU and any bad news is still seen as scaremongering. The OBR forecasts on Wednesday will show what the government think the cost of brexit will be - but knowing the brexiteers they will all say the OBR is wrong!

Prosper like never before.

SELECT COMMITTEE

The Commons Select Committee that is overlooking the brexit process had a sitting last week that I caiught on BBC Parliament yesterday. What was absolutely amazing was the lack of knowledge on what brexit meant, how long it would take, the implications for our economy and so on.

Facing the committee was Sir Simon Fraser, a former Permanent Under Secretary at the FCO, Professor Catherine Barnard for Cambridge and a lady from the Institute for Government. All extremely capable and knowledgeable but even they were unsure about many things.

Leavers like Michael Gove, Peter Lilley, Dominic Raab and Craig McKinley all tried to minimise every problem and essentially accused the witnesses of making the whole thing far more difficult than it needed to be.  Mr Raab was shocked when it was suggested we would need more civil servants after brexit than before. Sir Simon gently pointed out that if we check all visitors from the EU to control immigration, more border control personnel will be needed. This is to say nothing of the dozens of EU agencies we rely on (see HERE) which will need to be duplicated or replaced with something else.

Gove asked how long a "quickie" divorce would take to negotiate after the witnesses had explained how vast and complex the withdrawal agreement would be.  It all seemed as if they were unable or unwilling to acknowledge what everyone has been telling them for months.  The fact that after five months we are still no closer to knowing what brexit means is enough to tell us how fraught the whole exercise will be (see The Telegraph HERE)

SUPREME COURT HEARING

The appeal to the challenge to the government's plan to invoke Article 50 using the royal prerogative is due in the Supreme Court in December but the challengers, in the form of Mr John Halford of Bindmans LLP have published a quick note (HERE) to update everyone on the latest position.

There are a couple of points to note. Firstly, the government, contrary to what some commentators were saying, will not argue that Article 50 can be revoked. This might have been difficult for Mrs May to have to admit because the more prominent leavers might have had apoplexy!.

More interestingly, Lawyers for Britain have asked if they can join the case (HERE) and help the government. This seems amazing to me since it was the attorney general himself who presented the case in the high court. It is not at all clear why they think they can help and what they will argue differently to the government. The court has not yet made a decision on this.

I note also, the Supreme Court hearing will be broadcast live.

BREXIT PROBLEMS COMING

Richard Corbet, a Labour MEP, has written a piece for The Staggers (HERE) about problems arising from brexit that are coming down the line. He calls it the nightmare we will soon be unable to ignore.

The questions he raises are about regulating stuff. He says we rely on all kinds of EU bodies to produce and monitor all sorts of activities and he lists a few of them. European Marine Safety Agency (EMSA), European Air Safety Agency, European Chemicals Agency, European Union Intellectual Property Office and the Patent office and court and the European Global Navigation Satellite Systems Agency.

He asks if we are going to continue to rely on these agencies (and others) or do we create our own at great expense. And do we copy EU regulation changes or plough our own furrow so that as time goes on we become further and further away from our European friends.  Put in the way Mr Corbet does, it is easy to see the folly of leaving.

MOST VOTERS WANT TO STAY IN THE SINGLE MARKET

A social research organisation called NatCen has published the result of some detailed polling about voters attitude to the EU after the brexit vote.  It makes fascinating reading (HERE).

The headline is that most voters want to remain in the single market, including 90% of those who voted to leave compared to 94% of remainers. However, at the same time as many as seven in ten (70%) think the UK should be able to limit the number of people from the EU who come here to live and work. Indeed, almost three-quarters (74%) believe that potential EU migrants should have to apply to come here in the same way non-EU migrants have to do.

Professor John Curtice, Senior Research Fellow at NatCen, said, “Irrespective of how they voted, voters in Britain do not feel that the UK’s exit from the EU should necessarily be a choice between a ‘hard’ or a ‘soft’ withdrawal. Rather, many back options on both menus. Consequently, the kind of deal that is most likely to prove electorally popular is one that maintains free trade but permits at least some limits on EU migration.

“That, of course, is the deal that many in the EU insist will not be possible. In those circumstances, the UK government will be faced with a tough choice. But given that most Leave voters – and, indeed, a majority of Conservative voters – prioritise limits on immigration over keeping free trade, perhaps we should not be surprised if that would be the choice that, if necessary, it will be inclined to make.”

I think this is all down to politicians like BoJo who have allowed people to believe they can have their cake and eat it. What will happen when reality intrudes?

UK INVESTMENT IN TECHNOLOGY AND TRANSPORT AMONG WORLD'S WORST

A report by the OECD (HERE) claims UK spending on transport equipment and technology is among the lowest in the world. In fact, in transport equipment we are actually 34th out of 34 countries surveyed. 

And for spending on the latest technology and industrial kit we are 20th out of 21 countries for whom data is available.  This is part of the reason for our appalling productivity record but withdrawing from the EU is not the answer, if anything it will make matters worse.  I wouldn't mind betting that what investment we do make is mostly by foreign owned companies who may even consider relocating after brexit.

BOJO EMBARRASSES AGAIN

After last week where Liam Fox was accused of threatening EU members that South Korea might sue them (not us) because the EU will be smaller after brexit, Boris Johnson is now accused of insulting Italians by telling them if trade barriers are put in place they will not sell as much Prosecco (HERE).

Carlo Calenda, former Italian envoy to Brussels says Britain was in "chaos" over its position ahead of Brexit negotiations and said it was unacceptable for the European Union to be held to ransom over "an internal UK debate". He went on: "Somebody needs to tell us something, and it needs to be something that makes sense.

"You can’t say that it’s sensible to say we want access to the single market but no free circulation of people. It’s obvious that doesn’t make any sense whatsoever"

The Guardian claim BoJo was "ridiculed" (HERE) by Dutch finance minister and Eurogroup president, Jeroen Dijsselbloem, who said Johnson’s aims of leaving the customs union at the same time as securing immigration controls and maintaining access to the single market were not achievable.

Dijsselbloem told the BBC’s Newsnight: “I think he’s offering to the British people options that are really not available. For example, to say we could be inside the internal market but be outside the customs union, this is impossible, it just doesn’t exist. The opposite does exist. We have a customs union with Turkey but Turkey is not part of the internal market.

“He’s saying things that are intellectually impossible, politically unavailable, so I think he’s not offering the British people a fair view of what is available and what can be achieved in these negotiations.”

UNEMPLOYMENT DROPS AGAIN

This week's unemployment figures show another fall, defying predictions that it would begin to rise (HERE) but the ONS warns that the growth in employment is slowing and there was actually a rise in the number of people claiming job seekers allowance.

Reuters take on it is HERE

TOURISM SLUMPS

Oddly, after a brief boost when the pound dropped, tourism is now suffering a post brexit slump (HERE) with hotel rooms empty and business travellers and tourists turning their back on London.

Preliminary figures from the global hotel data firm STR, analysed by The Independent, show that the number of empty hotel beds in the capital increased by more than one-third in October compared with a year earlier. Average rates fell by 7.7 per cent to below £150.

Oh well, Prosper like never before.

IRISH LEAK REVEALS DUBLIN'S THINKING

A leaked memo from inside the Irish government has revealed what looks a bit like frustration with the UK and it says brexit is like a divorce where one side is trying to keep all the assets (HERE).

This was followed today with an article in The Guardian (HERE) which tries to bring a bit of reality into the issue and claims that some EU countries, particularly those facing elections next year, such as France, Germany and Holland will almost certainly make things as difficult for us as possible in order to show their electorates that a break up of the EU is only going to be painful.

I think it is clear we won't be allowed to keep all the assets and we may be lucky to keep any of them!

FIRST BOMBSHELL

The BBC have obtained a memo written by a consultant inside government and warning that there are 500 uncoordinated projects running to determine the negotiating stance and the possible impact of brexit on government and the country including business, security, the arts and so on (HERE).

The author says there is no plan and there is unlikely to be one for six months. The BBC political correspondent Chris Mason - who has seen the memo - says the document shows how "complex, fraught and challenging delivering Brexit will be".

The memo also suggests the government does not have enough officials to implement Brexit quickly, while departments are developing individual plans resulting in "well over 500 projects".  It estimates an additional 30,000 extra civil servants could be required to meet the workload. However, the BBC correspondent says money to pay for the extra staff will not be provided in next week's Autumn Statement.

The document also says big businesses could soon "point a gun at the government's head" to secure what they need to maintain jobs and investment.

I think this is the first of many "bombshell" revelations that we are likely to see more of in the coming months and this may at last begin to show how stupid, difficult and costly brexit is going to be.

BANKS PREPARING TO MOVE OUT OF UK

U.S. bank Citi is preparing to move up to 900 jobs from London to Dublin as part of its contingency plans for Britain's exit from the European Union, the Sunday Times reported (HERE). This should come as no surprise given the lack of clarity in government planning.

At the same time the RBS chairman, Sir Howard Davies, is pleading for some sort of transitional arrangement after we leave (HERE) and says banks are not going to wait to see the government's full negotiating position and will mover before this happens.

And of course, we won't even know if a transitional deal is on offer until after Article 50 is triggered. This would be like jumping out of an aircraft without knowing for sure if you have a parachute.

BREXITEERS RUSH TO DISTANCE BREXIT FROM TRUMP

Danial Hannan is the latest brexiteer to claim that Trump's victory in the US and brexit are not at all connected (HERE) when it is obvious they are inextricably linked.

Both were driven by people who are unhappy with their lot but cannot accept it is anything to do with them. Brexiteers blame the EU and immigrants while Trump blamed immigrants, Mexicans, the Chinese and virtually everybody except the people of the USA.

They, like us, have problems but they are all home made and we shouldn't think anyone else is responsible.  This is exactly what happened in Germany in the 1930s. Sooner or later, on both sides of the Atlantic, people will see the solutions are all in their own hands and always were.

Also they think Trump will be good for brexit but others doubt an isolationist can be anything but disastrous for world trade (HERE) and everything else.  Crispin Blunt says it will help in the negotiations because we have the largest armed forces in Europe - as if we would survice 5 minutes against Russia.

J P MORGAN NOW IN DOWNING STREET

One of Wall Street's top bankers has urged ‎Philip Hammond to ensure a long transition period for the UK's exit from the European Union amid warnings about "cliff-edge" disruption to financial markets (HERE).

Sky News has revealed that Jamie Dimon, the chairman and chief executive of JP Morgan, met ‎the Chancellor in Downing Street on Thursday, months after warning that Brexit could force him to move up to 4,000 jobs out of the UK. One wonders which company is going to be next for support and reassurance!

A HARD BREXIT AWAITS US

According to Standard & Poor, the most likely outcome for the UK is a hard brexit outside the EEA and the customs union (see Reuters HERE).

S & P said that it appeared that Britain's government had not yet accepted that the EU was unlikely to yield on the indivisibility of its four freedoms - the free movement of people, capital, goods, and services.  Eventually perhaps, the penny will drop for the brexiteers.

The EU chief negotiator Michel Barnier said the talks will be neither aggressive or naive (HERE).

NEW EUROPEAN ON THE ELECTORATE

The New European printed a report (I can't put a link to it because I buy the paper copy only) about the electorate last week. A professor at a university has looked at the voting figures and he said 75% of the 18-34 age group voted to remain, while the figure for the 65+ was just 35%.

He claims, and I think this is right, that 750,000 people join the 18-34 group each year while a similar number leaves the 65+ group, by dying.  On this mathematical basis and assuming no one changes their mind, each year the remain side will add 300,000 to their total while the leave total will reduce the the same amount.

Thus, by 2020-1 the result will be in balance and there will then be an ever growing majority to remain in the EU.  Also, in October the government announce plans to allow ex pats who have lived overseas for 15 years or more to vote. This could add between 1 and 5 million to the electorate, the majority of whom would be expected to vote remain.

And if we assume the economy is going to take a big hit soon, it would not be a surprise if some of the leavers, confronted with all the complex legal and constitutional issues, changed their mind.  

It is not that hard to foresee Mrs May going to Brussels to sign the withdrawal treaty with pro Europe newspaper publishing regular polls showing a clear majority to remain. What would the PM do in these circumstances?

LOSS OF EURO CLEARING WILL COST BANKS $77 BILLION

The CEO of the London Stock Exchange has said banks will have to find an extra $77 Billion in additional collateral (HERE) if Euro clearing is lost as seems almost certain to happen. 

Xavier Rolet said, “It will never come back to London, if the clearing operations are removed, what is most likely is that it will be New York that will benefit the most". 

TRADE DEALS AND INDIA

Theresa May visited India this week, apparently to discuss trade deals but was met with a blunt response about allowing many more Indians to come here to study.

The BBC are reporting this but the more interesting stuff is in the analysis by Simon Jack (HERE) below the main news item. Trade deals with India are going to be extraordinarily difficult. The EU has been trying for years but India is just as protectionist behind its tariff barriers as the EU is and if the EU with 500 million customers can't persuade India to be more open it's hard to see how we will do it.

One of the problems is that no one knows what our future trading relationship with Europe is likely to be and for all Liam Fox's attempts the EU are still standing by the position that no trade talks can even start before we have left (see HERE).  Compare this with Chris Grayling's promise that:

“We would immediately be able to start negotiating new trade deals… which could enter into force immediately after the UK leaves the EU” – (HERE)

PUBLIC FINANCES BEGIN TO DETERIORATE

The IFS has published their latest data showing the state of the economy (HERE). They are now forecasting that the £10bn surplus that George Osbourne had planned for 2019-20 will now be a £15bn deficit.  In other words we will be £25bn worse off by 2020.

I seen to remember the government had said before the vote we would be £40bn worse off, so the IFS thinks we will be slightly better than this but I think it is the beginning of the vindication for the Treasury and other forecaster who all said we will be unable to finance even the reduced £100m per week the leavers said we would have. In fact, what the new figures show is that the NHS will be worse off by £500m per week - assuming the government chose to cut spending by the same amount.

I don't see this number being painted on the side of many buses.

DOMINIC GRIEVE SPEAKS UP FOR THE JUDGES

Dominic Grieve, the former Attorney General and a man who fearlessly speaks his mind, has written a piece in the Staggers (HERE).

He says:

Our membership of the EU is underpinned by statute law. Brexiters may dislike the fact that this ever happened, but this was sanctioned by the sovereign will of Parliament when it enacted the European Communities Act in 1972. It is for Parliament to undo it and even if the government had won the case it could not carry out its task without parliamentary support.

And also:

This episode illustrates the fact that the growing violence of language and paranoia that now seems to characterise so much of the discourse of supporters of Brexit has other roots. It is difficult to escape the conclusion that its prevalence is a reflection of the insecurity which is inherent when a referendum victory is in part based, to the knowledge of some of the victors, on a prospectus supported by deliberate untruths.

The shadow Brexit Secretary, Keir Starmer, a former DPP has spoke up for the judges (HERE).

SCOTS TO JOIN LEGAL ACTION

The Scottish government has announced it will join Miller et al in the challenge to Article 50 (HERE). The appeal is to be heard on 5th December (HERE).

However, The Telegraph reports (HERE) that Euro sceptic Conservative MPs are trying to organise a quick vote in Parliament to try and get around the appeal court hearing.  They seem to think a short motion authorising the government to invoke Article 50 at any time up to the end of march next year will be enough.  It will be interesting to see if this gets the support of the majority. I am sure the opposition will vote against and it only needs a few Conservative Europhiles to vote against to defeat it.

It will give some idea of the feeling inside the HoC.

David Davis has said he will share his thinking with the devolved governments (HERE) as some sort of sop.

MORE LEGAL ACTION POSSIBLE

The CPS is apparently considering a complaint that voters were misled by the Vote Leave and Leave.EU campaigns, in contravention of electoral law (HERE). The Electoral Administration Act of 2006, which made an attempt to mislead voters an offence of “undue influence” – although it has not been tested by the courts so far.

It looks like another headache for the leavers and a potential flashpoint.

DAVIS AND THE ROYAL PREROGATIVE

It has been revealed today in parliament that David Davis once tried to get a bill through the house which was called The Parliamentary Control of the Executive Act 1999 (HERE).

The purpose was as follows:

The following powers of Ministers of the Crown, relating to or entailing the use of the Crown prerogative, shall not be exercised on any occasion unless the assent of the House of Commons has first been obtained in accordance with section 2-

And it goes on to list virtually every possible occasion when the royal prerogative might be used.  It was never enacted but Mr Davis, asked about it in parliament this afternoon, refused to give any answer about whether or not he still supported it. He seemed to suggest it was only to be used to stop the PM going to war but it is clear in 1999 he had a much wider reach in mind.  Nowadays he is in favour of using the same royal prerogative that he was so peeved about in 1999.

What a hypocrite.

THE SLOW DEATH OF THE CAR INDUSTRY

The UK car industry is facing death by a thousand cuts according to The Guardian (HERE).

The UK industry faces the threat of gradual decline should foreign carmakers overlook the UK when choosing where to build a new model or factory according to Mike Hawes, chief executive of the trade body the Society of Motor Manufacturers and Traders.

He said the recent decision by Japanese carmaker Nissan to invest more in its Sunderland plant was encouraging for the broader industry, but said the UK was in a constant battle to attract and retain investment. He told a House of Lords select committee that any impact on the UK car industry from Brexit would be slow-burning.

“It’s never going to be immediate. You wouldn’t wake up on 24 June [the day after the referendum] and say ‘OK, that’s the end of Sunderland’. But what you would see is a gradual reduction,” 

TRUMP SECURES THE PRESIDENCY

Amazingly, Donald Trump has won the US presidency against all the polling data. It was a total shock but as David Hannay (HERE) says, almost everything he said during the campaign was contrary to the UK government's policies and the British National interest.

He closes with the ironic thought that it would be odd if we were to find ourselves working more closely with the rest of Europe than we have ever done before, when we are all set to leave.

FRANCE AFTER OUR JOBS

Bloomberg is reporting that France has set up a "one stop shop" for UK companies wanting to relocate to France (HERE).

The initiative is the latest push by Britain’s neighbor, ally and historic rival to compete for jobs and investment in the wake of the U.K. referendum. French Prime Minister Manuel Valls, flanked Thursday by Paris region head Valerie Pecresse, Paris Mayor Anne Hidalgo and Safran SA Chairman Ross McInnes, sought to counter France’s reputation for high taxes and heavy regulation.

“France is changing,” Valls said at a press conference in the French capital, adding that the corporate tax rate will fall to the European average of 28 percent by 2020 and vaunting the payroll tax credits introduced under President Francois Hollande. “I’m convinced that we’re moving in the right direction,” he said.

The Independent has a similar story (HERE)

THE HIGH COURT'S DECISION

The High Court's ruling last week is continuing to cause waves. 

The PM writing in The Telegraph , has said,”Parliament voted to put the decision about our membership of the EU in the hands of the British people”. But this is wrong. The referendum was advisory only as was made perfectly clear beforehand but more importantly, as the government has already conceded in court! 

Compare Mrs May's words with these taken from the court transcripts - 

“His counsel [David Davis, Secretary of State] made clear that (the SO’s) does not contend that the referendum Act 2015 supplies a statutory authority for the crown to give notice under Article 50”

But members of the government have continued to claim the decision has been made. Meanwhile Tory MPs were demanding the PM takes action against the newspapers (HERE) but when finally Liz Truss (Lord Chancellor) and then Theresa May spoke out (HERE) it was a bland statement offering no condemnation of the papers and actually supporting a free press!  The Bar Council are outraged (HERE).

Others say the judges are absolutely correct (HERE) and some people think the press has lost touch with reality (HERE) and I think they are right.  Nigel Farage is reported to be arranging a march of 100,000 people on the Supreme Court when it hears the appeal in December. We are entering dangerous times for our democracy.

Incidentally, Sky News are reporting the government is already drafting up a bill - presumably as an insurance policy in case their appeal to the supreme court fails (as I am sure it will) - see HERE

INFLATION BECKONS

After the Marmitegate fiasco and Morrisons increasing the price by 12%, we now have news of other multi-nationals wanting to raise prices by 10% (HERE).  Walkers Crisps and Birds Eye Foods are both pressing for big price increases citing increased costs of raw materials brought in from abroad.

These increases will impact inflation sooner or later and CPI is expected to reach 4% next year according to BoE forecasts.

J P MORGAN NOW IN DOWNING STREET

One of Wall Street's top bankers has urged ‎Philip Hammond to ensure a long transition period for the UK's exit from the European Union amid warnings about "cliff-edge" disruption to financial markets (HERE).

Sky News has revealed that Jamie Dimon, the chairman and chief executive of JP Morgan, met ‎the Chancellor in Downing Street on Thursday (10th November) months after warning that Brexit could force him to move up to 4,000 jobs out of the UK.

One wonders which company is next!

NISSAN DEAL TO BE EXAMINED BY THE EU

It has been announced that the Nissan deal is to be examined by the EU (HERE) to see if it breaches rules on state support for industries and manufacturers.  The commission have asked for details so they can check it.

I think it is entirely possible that details will become public and we will be able to see what the PM and Greg Clarke agreed to.  What an irony it will be if the EU block it!

UPDATE 11th Nov. The Japanese ambassador has said the PM's intervention was "remarkable" (HERE) when he appeared before a House of Lords committee. He also said it was prime minister’s decision to invite the firm’s boss, Carlos Ghosn, to Downing Street for talks last month. Nissan didn't ask - the PM invited them. Amazing!

BORIS'S TITANIC SUCCESS

Boris Johnson has accidentally (freudian perhaps) made a rather telling slip and declared we will make a "Titanic" success of Brexit (HERE), a phrase which saw the PM with her head in her hands.

I have used the same analogy myself several times on this blog so it was no surprise to hear a member of the government use it.  We have not yet struck the iceberg but we are steaming full speed at it and a collision is expected around March 2017.

There will then be a period where the economy takes on water.  Captain May will reassure everybody that it is only a temporary difficulty and not to worry. This will be true - in the sense that when the ship finally sinks her problems will be over.

THE BREXIT NEWSPAPERS

There is a lot of vitriol and xxxxx reserved to those who won the High Court case, especially from the right wing press and the fervent Brexiteers.  Jacob Rees Mogg has finally flipped and says even if it takes a new election, a "purge" of Europhiles and a thousand new peers (HERE) brexit will be achieved!

The Telegraph says it is judges against the people (HERE). The Daily Mail talks about the "fury" over "out of touch" judges (HERE). The Sun says Mrs May must not let down 17m voters (HERE) - apparently the other 16m and the 14m or so who didn't vote can go to hell.  UKIP were warning about riots and a revolution (HERE) while Nigel Farage talks of betrayal (HERE).  Other talk of remoaners "last throw of the dice" (HERE).  Suzanne Evans and Douglas Carswell think the judges should be locked up or dismissed - like they do in Turkey or Zimbabwe and North Korea.

All of this is utterly disgraceful but horribly predictable. But there are voices of reason out there. Someone (HERE) says the supremacy of parliament is the whole idea of brexit! Elsewhere another writer says if you think the courts are interfering in democracy you don't understand how Britain works (HERE).  Will Gore in The Independent says the pro-brexit media has finally lost touch with reality (HERE).

Liz Truss the Lord Chancellor has finally come out in support of the judges after two days of silence and Mrs May is urged to do the same although she has said nothing yet (HERE).

And finally if brexiteers think this is the last throw of the dice I am afraid they are very much mistaken - it is only the first!

LAWYERS FOR BRITAIN

After last week's High Court ruling there has been a flurry of comment, mainly from outraged brexiteers about the courts "interfering" in a political process. Brexit Central posted a link to a website called lawyersforbritain (HERE) which criticised the judgement.

However, lawyers for Britain are wrong on at least two fundamental points. Firstly, they say the referendum result was binding  and that the royal prerogative is used in the Council of Ministers of the EU to vote for Regulations which then alter domestic law (HERE).  But I think last week's judgement answers both points.

It was common ground that the referendum was NOT binding with even the government conceding the vote had no statutory power at all.  And Regulations become effective in UK law after the use of the royal prerogative only because parliament has so willed it.

They also argue there is nothing in the 2008 European Union (Amendment) Act to say the prerogative could not be used but it did bring under parliamentary control any further changes to EU law. But last week the High Court accepted that parliament could not have intended to "switch on" EU law but leave it to the executive using an ancient prerogative to switch it off.  And a similar argument was used by the Attorney General that in the absence of a specific part of the original 1972 Act preventing the use of the prerogative, the government should be permitted to use it.

But the court decided that in domestic law (i.e. the 1972 Act), where it is not clear, it must be presumed only parliament retains the power to confer or deprive people of rights. Only in International law, which does not impact domestic law is the crown free to act using the prerogative.

SERVICES GROW BUT BIG JUMP IN COSTS

The service sector grew in the last month (HERE) but input costs rose at the fastest rate for 20 years and this does not bode well for future inflation.

When the effects of Brexit appear in the pockets of the public perhaps many of the leave voters will not be quite so gung-ho to get out of the EU.

LEGAL MISUNDERSTANDINGS

There is a lot of misunderstanding of yesterday's legal decision and a lot of vitriol towards the judges in the Mail (they are described as enemies of the people - very dangerous stuff).  David Davis and IDS were both on TV decrying the High Court and saying the people had made a decision.

But this is fundamentally wrong. The people were asked in an advisory referendum. No decision has been made yet and the whole purpose of the case was to decide who gets to make the decision. Is it parliament or is it the executive?  The court decided, quite rightly it must be parliament.

It would be a surprise if the Supreme Court were to disagree with the judgement.  Only parliament can take away rights give to us by parliament. If it were otherwise parliament itself would be irrelevant.

LEGAL BATTLE - FIRST HURDLE CLEARED

There was a spectacular victory at the High Court in London today (HERE) and (HERE) when the court agreed that parliament must give the approval before the government can trigger Article 50. BBC described it as a hammer blow against Theresa May's Brexit plan.

The government has said they will appeal the verdict, leapfrogging the Appeal Court and going directly to the Supreme Court in December (the 8th I think). If we succeed again, parliament must then be asked to provide a mandate to allow Article 50 to be started.  Brexiteers are protesting like mad but they (in their own words) should accept it and get on with it!  The Telegraph carry an article this afternoon saying the case should not have been brought (HERE) and even Daniel Hannan, usually such a campaigner for the sovereignty of parliament is talking about the "pomposity" of it.

It is hard for them to argue against it since it is simply making parliament sovereign, something they have all argued for - but only when parliament agrees with them!  I would say if they cannot accept it then they must accept the reverse position. If the government can take us out of Europe without parliament, then a future government can take us back in - without parliament.

It's a great day for democracy and the first time I can smile since June 24th. It is like El Alamein all over again, before it only defeats, afterwards only victories!

Prosper like never before.

Update:  David Davis and Theresa May both now seem to accept the decision (If the Supreme Court agrees) will mean primary legislation pass both houses. Baroness Wheatcroft was on Radio 4 this morning saying the March deadline is all but impossible now.  Mrs May has apparently already said the schedule remains as planned.

IRISH BORDER PROBLEM

This week there has been a conference in Ireland to look at cross border issues that are inveitably going to arise after brexit (HERE). Enda Kenny warned that the negotiation could get vicious but I was interested in one contribution, presumably from a businessman, about the movement of labour.

If the UK government introduces a points style system for allowing workers in this would be intended to allow highly skilled individuals in but not labourers or those with no skills.  But if there is no hard border between north and south in Ireland controlling this would be impossible. And how then would the EU look at this.  They would surely not be happy to see a rule applying to all other EU citizens being ignored for anyone coming from the republic. This would be discrimination writ large and anathema to the EU.

DISPOSABLE INCOMES TO BE CUT BY BREXIT

The NIESR has produced a report (HERE) suggesting that disposable incomes will be cut next year for the first time in four years.  Inflation is apparently going to rise to 4%.

This will impact the families that Mrs May warned were just managing and reinforces an earlier report by The Resolution Foundation (HERE).  These are the very people the Conservatives are trying to help and probably those who voted heavily to leave the EU. How ironic.

It will be interesting to see how the Brexiteers argue this one, presumably it will be jam sometime later.

MORE SPECIAL PLEADING

In a new report by a think tank headed up by Stephen Dorrel the former health secretary (HERE) they claim we will suffer post brexit because we will be waiting longer for new drugs to be approved and UK life sciences will lose £144bn of sales by 2020.  They want us to retain close ties with the European Medicines Agency.

Today we are told the UK must align its banking rules with those of the EU in order to retain access to the single market for our financial services sector (HERE).

From the outside it must look as if we are trying to rejoin with all the benefits except the two that really matter - the free movement of people and the ECJ - to the Europeans. It is as I have said before, an attempt to get what Cameron tried last year but starting from the opposite direction.

THE CHALLENGES OF BREXIT

The UK in a Changing Europe (see sidebar on the right) has produced an interesting pamphlet about what they call "the immense legal, constitutional and bureaucratic challenges involved in the Brexit process". Download it HERE.

It argues one of the first steps in the negotiations will be to decide if both a withdrawal and a trade agreement can be conducted in parallel.  This in itself must eat into the two year time frame.

They also see that a second referendum under the 2011 Act may be needed to approve any new treaty unless this Act is repealed - and I am not sure how parliament would be able to explain this away.

We will, according to them, have to reapply for WTO membership and other countries may drive a hard bargain for this.  And it may even be possible to unilaterally revoke article 50 but there may be troubling legal implications if we do.

I did not realise that there are some shared competences between the EU and the devolved administrations which don't pass through Westminster.  This will need to be revised but political problems are forecast if the devolved administrations seem to be losing power to Westminster.  There is much more in the pamphlet but in the conclusions are some important points:

In voting to leave the EU, the British people have unleashed a process potentially as complex as it is unpredictable.

The Brexit process will test the UK’s constitutional and legal frameworks and bureaucratic capacities to their limits - and possibly beyond

NISSAN DEAL WON'T PERSUADE OTHERS

According to Bloomberg today an official in Angela Merkel's government says she is relaxed about the "support and reassurances" given to Nissan. But pointedly, the unnamed official says "it reflects the British fear about the consequences of Brexit" and I think this is true.

Meanwhile on Newsnight last night a Japanese business strategist was on (see HERE) and said the Nissan decision was a "minor one" meaning that there was little new investment and he thought the company had already made the decision before June 23rd anyway. He said he would advise against any new investment until the shape of the UK (Scotand and Ireland) and its relationship with Europe was clearer.

He added that if you were thinking on investing in Europe in future you would tend to prefer the larger bloc of 27 rather than the UK. 

All of this should act as a warning about the decisions being made at the moment and until brexit actually happens, many of which will impact our economy - and not for the better.

AL JAZEERA AND A HARD BREXIT

It sometimes takes a complete outsider to put things into perspective. Al Jazeera, the Islamic broadcaster has a website where a British journalist has written an article which might make sobering reading for passionate Brexiteers (HERE).

Alastair Sloan says we should be aware of the political power of the European People's Party, the EPP and it's capacity for spite. Merkel and Tusk are members of the group and the EU's chief negotiator Michel Barnier is the EPP's vice president. The EPP is passionate about the political aims of the EU and were upset when Cameron flounced out of the centre right grouping in 2009. Trade is much less important to them than it is to brexiteers and Mr Sloan thinks we should forget about the forthcoming negotiations being about trade, it will be political and they will decide what to do with the UK without us having any real influence at all.

JAPANESE CONCERNS

According to The Guardian, (HERE) the head of the Japanese chamber of commerce has said that Japanese companies have already received approaches from European countries about relocating factories into the EU. He said this at a reception in parliament with, among others, David Davis who in reply said Britain after Brexit would be an open trading nation and it would have a comprehensive trade agreement with the EU.

I am not sure this cut any ice with Mr Hayashi who said they needed more than assurances and still felt remaining in the EU was the best solution even though they accepted the result of the referendum.

This does not surprise me. Trade deals with other countries won't necessarily help Japanese companies here. Why would Nissan build a factory in Sunderland to serve South America for example? And to say we will have a comprehensive deal with Europe is a bit rich since this is what we have now and we aren't in control of what will happen in the negotiations.

Haruki Hayashi, also the European regional CEO of Mitsubishi, hammered the point home. “More than general reassurances are called for at this stage to ensure the Japanese investment presence in 
the U.K. is not diminished for lack of consultation and information sharing.”

“Of course Japan will not sit at the negotiating table when the U.K. negotiates with the EU,” Koji Tsuruoka the Japanese ambassador told Mr Davis, “But we are friends, we are also a very major stakeholder, the Japanese economic presence in the U.K. is quite significant. Therefore this important presence will of course have an impact on how the negotiations should be conducted.”