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.”

MAY WROTE PAMPHLET SAYING MPs SHOULD HAVE VETO

Mrs May's hypocrisy has been made clear with the news that she and her advisor Nick Timothy wrote a detailed pamphlet in 2007 (HERE) saying ministers should gain Parliamentary approval before talks with the European Union.  This is of course quite the opposite of what she is saying now.

The pamphlet is HERE.

It heaps praise on Denmark for the way that ministers have to obtain a mandate from the Danish parliament for their negotiating position  before" they go into any kind of negotiation with the EU. The discussions are held in private but a summary is published afterwards of the items on the agenda although the specific mandate remains private.

In the pamphlet she argues it should be impossible to override parliament.