CBI SIGNS OPEN LETTER ON BREXIT

The CBI has sent an open letter to the government (HERE) pleading with them to ensure we retain barrier free access to the single market and claiming a hard Brexit would do "serious and lasting" damage to the UK economy.

The EEF and ICC (International Chambers of Commerce) and TechUK a lobby group representing the technology industry in the UK also signed the letter.

GOVERNMENTS LEGAL ARGUMENT ON ARTICLE 50 PUBLISHED

The government has now published the legal basis for its argument in next week's high court hearing (HERE).  Infacts pointed out that it doesn't address at all the main point that triggering Article 50 starts a two year clock running after which we will be out of the EU come what may.

This is fundamental because it is widely accepted that the royal prerogative is not used to override statute and the European Communities Act 1972 (i.e. statute) will effectively become redundant after we exit the EU.

One of the counter arguments by anti-Brexit lawyers is that we could trigger article 50 using the royal prerogative but afterwards parliament does not pass The Great Repeal Act in which case we are out of the EU but still bound by all its laws!

MERKEL CONFIRMS AGAIN NO SPECIAL DEAL FOR UK

Angela Merkel once again reaffirmed her absolute commitment to the four freedoms of the single market (HERE).

Speaking to Germany’s BDI industry lobby in Berlin on Thursday she gave a further indication that the U.K. risks a so-called hard Brexit, whereby it gives priority to controlling migration over seeking as much access as possible to the EU single market of some 500 million people. She said there will be no "easy negotiations".

Of course, much of this is positioning before talks really begin but she has been so clear about freedom of movement it is hard to see any climbdown on this at all.

The Maltese take over the EU presidency next year and their prime minister says Britain will be treated like Greece and will face a united front from the EU27 (HERE).  None of this looks good.

FINANCE JOBS WILL GO WHATEVER THE DEAL

The UK head of U.S. bank Citi said on Monday last week that jobs in London's financial sector would move to countries inside the European Union after Britain leaves the bloc, regardless of what deal is struck on access to the EU financial services market (HERE).

This on the basis that no economic bloc is going to allow its financial services to be supplied and dominated by a third country.  No matter what the deal, the EU will want to see most financial services moved inside the bloc where they can be regulated by the bloc. It makes perfect sense to me.

WORKING CLASS WILL PAY AGAIN

May in her closing conference speech this week said the working class paid the price for the financial crash in 2008-9. The tragedy is that it is they who will pay for Brexit as well.

Many of those who voted leave seemed to believe we will somehow be better off separating ourselves from our largest export market where there are no trade barriers.  They voted (apparently) as a protest at their own lives but leaving will only make matters worse.  No one has had the courage to explain this yet and perhaps they won't be able to until economic reality arrives in a year or two.

MAY'S CONFERENCE SPEECH

Full speech is HERE. Interesting bits are :

I will never allow divisive nationalists to undermine the precious Union between the four nations of our United Kingdom.

Our laws will be made not in Brussels but in Westminster. The judges interpreting those laws will sit not in Luxembourg but in courts in this country. The authority of EU law in Britain will end. 

Existing workers’ legal rights will continue to be guaranteed in law 

We have voted to leave the European Union and become a fully-independent, sovereign country. We will do what independent, sovereign countries do. We will decide for ourselves how we control immigration.

We are not leaving the European Union only to give up control of immigration again. And we are not leaving only to return to the jurisdiction of the European Court of Justice.

Mrs May talks of nationalism but isn't this what Brexit is all about?  And as for the rest it seems she is determined to get a hard Brexit. There is no way we can get full control of our borders and laws without a complete separation.

Denis McShane (HERE) has an interesting article in The Independent about Mrs May' speech and the fact she has little foreign policy experience and sees the world through home counties conservatism lenses.  He also noted the reference to not allowing the ECJ any jurisdiction over British courts and concludes we will not have any sort of membership of the single market.

TELEGRAPHS 100 REASONS TO CHEER BREXIT

The Telegraph has published a bizarre list of reasons (HERE) why we should cheer Brexit including being able to buy extra inefficient vacuum cleaners and bent bananas. I suppose I shouldn't be surprised at the sheer silliness of it all but since the outcome is so serious for this country, I am.

POUND HITS RECORD LOW

The Telegraph (HERE) is reporting the pound trading at a record low on a trade weighted basis (against the currencies of our main trading partners). The text gives an explanation but things are getting even worse.  

Today the pound was trading at $1.22!  If interest rates have to rise to counter the slump God help us!

Amazingly the ex boss of HSBC and an enthusiastic Brexiter  Mr XXX says it's nothing to do with Brexit (HERE) and more to do with our lack of competitiveness!!  Did he think the slump in sterling on 24th June was a coincidence?  This is the shape of things to come. Brexiters are going to deny every piece of bad economic news is in any way connected with Brexit.  

He admits we haven't exported enough since 1997 (and well before this in my opinion) and the Mail reports Liam Fox (HERE) saying we need to export more to exploit glorious joy of free trade!!! It would have been wiser to address the deep seated problems of a lack of export competitiveness then go the Brexit - but no they've chosen to do it the other way round.

SUNDERLAND REGRETS

The Sunderland Echo (HERE) is reporting on comments made last week by the European CEO of Nissan on radio 4 saying new investment at Sunderland is being suspended until either the UK confirms tariff free access to the single market or compensation if tariffs are applied in future.

The Independent covers it HERE.  Some people in Sunderland are becoming concerned about the long term future of the plant which employs 7000 people directly and many more in the supply chain. Not to mention the contribution it makes to our exports.

Some more background is HERE.  This is what Sunderland voted for!!  Amazing.

UK'S RED LINES ON BREXIT

Bloomberg are reporting (HERE) sources in the government saying four red lines are developing and they are:

No budget payments
Control of immigration
No ECJ jurisdiction over the UK
Lawmaking by the UK only

If this is true we are looking at leaving the EU completely and trading under WTO rules or under a FTA taking years to negotiate.  Prosper like never before.

PARTY LIKE ATMOSPHERE AT THE MOMENT

There is no doubt at the Conservative party conference this week and in the country at large, among those who voted leave and even some reluctant remainers there is a wildly optimistic atmosphere as the economic indicators remain stubbornly good.  It reminds me of the kind of party where everyone has drunk far too much and some prankster suggests a ridiculous stunt like jumping naked off Westminster bridge. Amazingly, the party takes up the idea and it begins to seem like a tremendous thing to do.

People encourage each other and the downsides fade to nothing. At the moment this is where we are.

Soon it will be 3 o'clock in the morning, blustery and raining hard. We are standing next to the parapet looking at each other and wondering if it really is that good an idea.  The Article 50 letter is in our hands, rain sodden and stained. The cold light of reality is peeping over the eastern sky.  Are we really going to do it?

THE BANKS AND BREXIT

Last week it was reported that the government was not going to offer the banks any special protection from the impact of Brexit (HERE). After May's opening speech to the party conference which was widely understood to mean we were heading for a "hard" Brexit the pound tanked on foreign exchange markets and this morning dropped below $1.27 briefly.

Yesterday she moved to "allay fears" (HERE) that Brexit would mean British firms losing the ability to operate in the single market. These are the mixed messages that exasperate those in the EU who think we have not yet found the words to tell people we cannot have our cake and eat it.

This morning a report by Oliver Wyman, a business consultant working on behalf of The City, says the UK banking industry is worth between £190 and £205 billion to us and generates tax revenues of £60-£70 billion annually (HERE) and (HERE). The report claims up to 70,000 jobs and up to £40 billion in lost revenue are at risk.

Either the government still doesn't understand the risk or is playing the highest stakes poker game ever.  We shall see.

POUND TUMBLES AND EU NOT IMPRESSED WITH MAY

After Mrs May's speech on Sunday the money markets have given their response. The pound hit a new 31 year low (HERE) and although the IMF said we would have the fastest growing G7 economy in 2016, next year will see a hit (HERE).

What an irony this would be. Inside the EU we have the fastest growing major economy. After we leave everyone expects us to suffer. How Brexiteers will explain this will be interesting.

Europeans were also unimpressed with her tough talk (HERE). In Prague, there were some raised eyebrows at some of Mrs May's rhetoric as well as an expectation that the government will face up to reality sooner or later.  A Czech minister, Tomas Prouza, said it seemed we have still not found a way to explain to the UK population that the promises made during (and after) the referendum are completely unrealistic.  He though we wouldn't sacrifice our banking and financial sector which would lose access to the single market - but I suspect he might be wrong. Some of the Brexiteers are intent on leaving the EU at any cost to the economy and people's jobs.

Prosper like never before.

THE LEGAL CHALLENGES BEGIN

The high court in Belfast has begun to hear a legal challenge to the idea that only the government should trigger Article 50 (HERE).

Leaving the EU would undermine gains made during the peace process, a barrister told the court on the first day of a legal challenge by political leaders and human rights campaigners against the EU referendum result. Northern Ireland's Good Friday agreement has some special significance and it is being argued that it gives NI a veto over Brexit.

The outcome will be interesting and the first test of the government's legal officers opinion. Another case in the high court in London is due to start in the next few days.

TORIES BRACED FOR ALL-OUT BREXIT WAR?

Buzzfeed (HERE) are claiming the tories are heading for an all-out war over Brexit. The majority of tory MPs (185) were remainers while 138 were for leaving.  The party is split over Europe as it has been for the last 30 years or so.

Leavers are also the majority in Labour, the SNP and the Lib-Dems so altogether about 75% of the House of Commons was in favour of remaing. In the Lords it is even higher at about 85%.  

It is hard to see how the process is going to be smooth and quick when there is so much rancour and ill feeling.  Ken Clarke has openly said he would vote against triggering Article 50 if it goes to parliament and this is what Mrs May and the mad Brexiteers are worried about.  The whole thing may yet end in tears for the tories.

AUSTRIAN MINISTER SAYS WE WILL SOON BE BACK

The Austrian minister of finance says we will regret leaving and we will soon be asking to come back (HERE).  This has been my opinion all along because:

a) The young predominantly voted to remain and as older voters die there will soon be a majority to remain.

b) It is doubtful that all of the promises made by Brexiteers (the UK prosper like never before!) will come to fruition and we will get progressively poorer

c) The EU will not fail as leavers hope but will solve their current difficulties and will prosper

d) The idea of Europe uniting is a good and obvious one.  Younger people are not the insular xenophobes that some older people are and will come to see unification as a noble cause.

e) Outside of the EU and the customs union we will be the ONLY European country trading with the EU on WTO terms and this is simply insanity - as the EU realise.

TUSK REBUFS MAY'S CALL FOR INFORMAL TALKS

Things have been busy this weekend with the Conservative party conference starting in Birmingham. Mrs May gave a speech announcing the Article 50 letter would go before the end of March 2017 and saying informal talks with the EU should begin now.

Donald Tusk, president of the council, within hours tweeted (HERE) that:

“Once Article 50’s triggered, EU27 will engage to safeguard its interests.”

In other words, as the EU have made clear all along no negotiations formal or informal before Article 50 is triggered. It is as if we are totally deaf to everything the EU say and we simply keep trying the same failed approach.

BREXITEERS CRAZY ESSAYS

Ian Duncan Smith's Centre for Social Justice has published what they say is a plan for Brexit although it is titled the Brexit Essay Collection (HERE). Contributors included IDS himself and Peter Lilley but the best one is by John Redwood.  Twitter users are scathing about the whole thing describing it as laughable and blind stupidity (HERE).

It is indeed laughably stupid.  Mr Redwood's action plan for Bexit is (literally) this:

1. Offer talks on trade and tariffs if they wish to change anything, saying we are happy to offer them no change to current arrangements.

2. In other words, we stay in the Single Market as now, without freedom of movement and the contributions.

3. The advantage we have on trading is that we are happy with the status quo, so they are the ones with a problem if they wish to change it.

4. This reverses the presumption of many commentators that the UK needs to negotiate with the rest of the EU and is the supplicant.

In other words, unilaterally withdraw from freedom of movement, refuse to pay contributions then say we are now happy with the (new) status quo and if YOU refuse it will all be your fault.  This from a grown man!  It is all reminiscent of the old union barons that he used to criticise.

And they all claim to know why people voted leave, all different reasons but no one apparently voted leave to get an extra £350 million a week for the NHS - their main campaign bus slogan!