EU CITIZENSHIP MAY BE POSSIBLE AFTER BREXIT

Reuters (HERE) and The Independent (HERE) are both carrying stories that the EU are seriously considering offering citizenship to Britons after brexit.  I think this would be a perfect way to retain close ties with Europe until we can rejoin the bloc. However, many leave politicians are absolutely opposed to it - as usual.

UPDATE:

It seems the EU parliament will not be discussing this - for the moment - see HERE

POLLS BEGIN TO TURN

Polling from YouGov and Which (HERE) appears to show that the majority of people won't accept a brexit that leaves them worse off including half of those who voted leave in June. Only 10% of the population would accept losing up to £100 per month and these presumably are people who are so viscerally opposed to the EU they are effectively beyond persuasion.

But more importantly the poll, conducted for Open Britain also suggests that the prolonged period of uncertainty since the 23 June referendum has chipped away at the pro-Brexit majority. If a rerun of the vote were held tomorrow, remain and leave would be tied at 44% each, with 5% not voting at all and 7% undecided. Also there is an increased number of people who think they will be worse off next year because of  price rises (HERE).

So we are already at balance with all the negotiations and the economic impact to come. Things are looking up?  The Huffington Post (HERE) has an item claiming that 120,000 leave voters have already died and 126,000 young remain voters have been added since June 23rd and if you combine this with leave regretters netted off against remain regretters (amazing) there is a 52-48% majority to remain. This might be fantasy but it shows we are headed in the right direction.

NIGEL ADAMS MP AND EU EMISSIONS TRADING

Our local MP, Nigel Adams who campaigned vigorously for brexit and said that one of the main reasons for him doing so was the EU regulations that he claimed were responsible for jobs being lost at Eggborough Power Station (HERE).

Now we are told the government is said to prefer remaining a member of the EU emissions trading system after brexit (HERE) so I assume another pillar of his argument has now been removed.

By the time we reach 2020 we will be beginning to see the results of brexit across the economy and I will be very pleased to remind him and everyone else that he bears a grave responsiblity for a lot of it.

REGULATIONS AND PRODUCTIVITY

This morning there is a stark contrast in the analysis of Britain's productivity problem. The BBC (HERE) has an item about investment in R & D by British companies showing we are 152nd in an IMF league table of business investment as a percentage of national income. A newly announced innovation fund from Oxford University of £600m we are told contains nothing at all from British companies. The writer seems shocked but I am not in the least bit surprised.

On the other hand The Guardian (HERE) has a story about Gove and Whittingdale asking British companies for a list of regulations they want to scrap after Brexit. They think our poor productivity is down to stifling regulation. My guess is that they will be surprised how little of the EU regulatory
regime industry will ask to be scrapped.

John Longford, the former chair of the British Chamber of Commerce, who campaigned to leave, speaking to the Brexit Select Committee, told them that he thought the “opportunities for deregulation are legion. Some of it will be to do with employment rights. Some of it will be to do with the fact that people might not be allowed to do overtime that they wish to do,” he said, citing lorry drivers as an example.

“But the fact of the matter is also that there is a lot of regulation that is nothing to do with employment rights that causes cost to business.”

One example he mentioned was the EU ergonomics directive, which he said made small businesses keep a ledger of checks of the positioning of computer screens and chairs. As far as I can see this has never been adopted and a H & S website (HERE) claims it "bit the dust" in 2013.

So there we have it. Our poor productivity is down to regulations - the same ones that German and French companies operate under without any problems - and not working long enough hours driving HGVs. According to the leading Brexiteers is is nothing to do with lack of investment. It was good to see Carolyn Fairbairn caution the select committee about focusing on “silly” anecdotal stories about over regulation (ie John Longworth's), which she said were of less concern to her members than the threat of losing access to European markets.

MANUFACTURING OUTPUT DROPS

UK Manufacturing showed an unexpected 0.9% drop in October (HERE) compared to the anticipated 0.2% increase. This was the biggest decline since February. Industrial production fell 1.3% led by a slide in the oil and gas sector.

I think also the fall in investment that we have seen will increasingly feed through into manufacturing output figures next year.

BANKS LIKELY TO BEGIN RELOCATION NEXT YEAR

The BBC have carried out an investigation into all the talk of banks and financial institutions moving some operations into the EU in order to continue trading inside the single market. Newsnight had the report last night including an interview with the a French financial regulator.  The BBC news website has the story (HERE).

Of course this is something the brexiteers told us would never happen. Well now it seems it might.

The regulator says he is in advanced discussions with "large international banks" about moving to Paris including due diligence work. He says many other companies had made informal enquiries and he thought the same things were happening in up to eight other European financial centres. This is not to say everyone will move or even that those who do will move everything, but the sector produced £71.4 billion for the exchequer in 2015-16 (HERE) so even a 10% drop in revenues is going to be painful. 

EU CHIEF NEGOTIATOR SAYS DEAL BY OCTOBER 2018

Michel Barnier gave his first press conference (HERE) in which he said a deal needs to be reached by October 2018 in order to give time for ratification by EU member states and the parliament.

However, I think there was also an interesting point he made in answer to a French journalist's question about withdrawal and trade negotiations and whether they would be simultaneous or sequential. I think he said that the trade deal would begin when we are a third country which I took to mean we won't be able to discuss the trade deal until after we have left.

Oddly, very few journalists picked this up. The only story I can see is by James Forsyth in a Spectator blog (HERE) who says:

"But Barnier’s position is that only once this deal has been agreed, can talks move on to what the future relationship between the UK and the EU will be. In other words, no talks on trade until the exit process has been agreed".

This is all going to drag on for years and years.

ARE THE REASONS FOR BREXIT BECOMING CLEAR

Jacob Rees Mogg (HERE) is saying that after Brexit we can slash environmental and safety standards "a very long way". So it looks like the main objective for Mr Rees Mogg is to make Britain the sweatshop capital of the world and if a workers have to suffer a few accidents and ill health this is all OK.

Germany, France, Italy, Holland, Belgium are all more productive than we are inside the EU and apparently weighed down with all those expensive environmental and safety regulations. They are 20-30% more productive and instead of addressing the real problems, his answer is to try and close the gap by cutting standards. It won't work.

TAX REVENUE FROM FINANCIAL SECTOR

Reuters are reporting that the financial services sector paid £71.4 billion in taxes in 2015/16 (HERE). This is a huge amount of money and some of it at least is at risk from brexit. 

If we lose passporting rights into the EU many companies will relocate some staff to the EU and we will lose revenue.  Brexiteers think any losses will be more than made up elsewhere but it is a gamble and the Reuters report shows just how big a gamble it is.

BOJO FURIOUS!

In an article about a leaked memo warning about leaking (you could hardly make this up but it's HERE) BOJO is said to be "furious" about his comments to EU ambassadors being misrepresented. These were comments he is said to have made about his views that migration was a good thing (HERE). He has denied it.

There is a terrific irony here since Johnson has made an entire career out of misrepresenting the EU and everything it does. I hope he is beginning to learn how it feels to be on the receiving end.

NOW WE MAY STAY IN THE EUROPEAN PATENT SYSTEM

Hot on the heels of indications our position on payments into the EU and migration are beginning to soften (HERE) it has been announced that we are going to ratify plans to create a European wide patent court (HERE). Apparently, some leavers had assumed we would pull out of this but now it appears not.

Andrew Lilico, the pro-Brexit executive director of Europe Economics, said the move was “the first really concrete commitment of the Government towards Brexit, and as it stands it implies the softest of soft Brexits, much softer than has been discussed”.  Let us hope he is right.

It seems we are going to demolish our European house and painstakingly rebuild it brick by brick 10cm to the left!  The difference finally will be so small as to be almost unnoticeable.

WE NEED TO LEAVE TO BE SURE WHAT LIFE OUTSIDE THE EU IS LIKE

The Huffington Post carries a piece by someone called David Vigar (HERE) which coincides with my own thinking.  He says we must leave the EU and have a taste of life outside. This, he says, is the only way to end the argument about our future prospects.  I agree with this.

Those in denial need to have their noses rubbed in the economic faeces that brexit will cause before they will accept we are better off in the EU. Of course, many of the most extreme like Farage, Cash, Redwood, etc will never admit we are worse off even if half the population is on the breadline or eating grass.

I think given five years outside the EU (so about 2024) there will be a majority in this country to try and rejoin the EU and we remainers will have been vindicated.  It will not even be enough to say things have not got much worse given the massive disruption we are going to go through. Brexit must be an enormous success or it's nothing.

JOHN LONGWORTH

The former head of the CBI John Longworth, an enthusiastic leave campaigner has an item in the conservative home blog (HERE) where he talks about the "wreckers and Remainers" bringing "mendacious" court cases. 

He says, "Brexit provides Britain with an unparalleled opportunity to crystallise the taking-back of control of our own affairs, and then to open up the potentially huge economic benefits that will arise from a clean and early exit from the EU. Yet deeply-in-denial Remainers will stop at nothing in their attempts to at best delay or water down Brexit – and, at worst, to stop it entirely".

Racing towards the cliff edge, Mr Longworth rages against anybody whose foot might look as if it's hovering anywhere near the brakes. If anyone is in denial it is him.

NISSAN - GOVERNMENT REFUSES FOI REQUEST

The government has refused a FOI request from the Financial Times (HERE) to release the Nissan letter giving "support and reassurance" on the grounds that it is "too sensitive".  I assume the FT will now go to the Information Commissioner and ask for the decision to be reviewed.

What have they got to hide?

GISELA STUART ADMITS THERE WILL BE SACRIFICES TO BREXIT

Gisela Stuart has given an interview to The New Statesman (HERE) where she accuses journalists of exaggerating reports of racist crimes following the brexit vote - even though the 45% increase is I believe, a police statistic and not from the press.

In the interview she is asked how can she justify pushing for a full-fat Brexit, when the people who Labour is supposed to represent would be hit the hardest? Communities struggling financially, and migrants who have been victims of racism?

“You have to have a conversation and say, in the long-run, this was the right thing to do,” says Stuart of the former. “Restoring democratic accountability in a way, which makes a society resilient. It gives it that base on which you then become economically successful.”

So it is an acceptance of short-term sacrifice then? “Yeah, I think so. Yeah,” she concedes.

I cannot remember anyone on the leave side saying there would be any short-term sacrifice, in fact Digby Jones (see right) was among the majority of leavers when he said "there won't be any economic pain".  Stuart herself was on stage with BoJo when he told us we would prosper like never before.  What happens when voters realise they have been duped?

THE MIGHTY SHIP BEGINS TO TURN

With a headwind beginning to freshen and the sound of creaking timbers the mighty ship Brexit begins to turn slightly. After all the claims made in the referendum campaign and afterwards it now seems the government is setting a new course on immigration (HERE) and on payments into EU coffers (HERE) and (HERE). With a bit more realism on the horizon it is not impossible to see we might accept judgements of the ECJ on matters affecting the single market or at minimum some supranational legal body to adjudicate disputes.

On this basis, the difference between the status quo and our future relationship with the EU will be virtually zero and many people will wonder what it was all for.

The Lib-Dems won a stunning by election in Zac Goldsmith's constituency last night (HERE), overturning a 23,000 conservative majority, the candidate standing on an openly pro EU ticket and promising to vote against Brexit.  Who knows where we will end up?

BREXIT CENTRAL

Andrew R T Davies (an economist) has written a piece for Brexit Central (HERE) where he rails against all the delays in triggering Article 50. The abstract for the piece says this:

"Nobody said Brexit would be easy – the European Union was designed to be extremely difficult to pick apart".

But this is one of the remainers biggest gripes. We WERE told it would be easy.  He goes on in the article to say:

"Despite Brexit: unemployment fell again this month to 4.8% – a far lower rate than the EU average; consumer spending rose by 4.2% in September; and we now know that Britain will have the fastest growing economy in the G7 this year (although you wouldn’t necessarily know it if you had a quick scan of the Twittersphere…)".

Remember we are still in the EU, Article 50 has not been triggered and we are still burdened by all the EU regulations. It will be fascinating next year and perhaps also 2018 when the economy slows and unemployment rises, to see how Mr Davies will explain the apparent conflict of the UK doing well inside the EU and then doing much worse after Article 50 is triggered.

LEGAL CHALLENGE UPDATE

Lawyers for the claimants have lodged their written submissions at the Supreme Court ready for the case to begin next week (5th). If you're interested you can see the case for The People's Challenge (HERE) and the written arguments for Miller/De Santos (HERE).

I assume we will also get to see the legal arguments for the Scottish and Irish governments and if so I'll post then here as an update.

Update 2nd Dec:

Scottish Govt case HERE
Welsh Govt case HERE

The Supreme Court website on this particular challenge is HERE.  The government is not confident of winning and have published a short bill (HERE) that they will try to rush through parliament in the event their appeal is rejected (as I strongly suggest it will).