THE LOTUS WEEKLY BREXIT ROUND-UP

Brexit briefing 21.10.2019

Travel

ETOA: BREXIT PREPAREDNESS SEMINAR ON 31 OCTOBER

A Brexit seminar is to be held by the European Tourism Association - ETOA on the day the UK is due to leave the EU – 31 October.

This is a free to attend event for the travel and tourism sector commissioned by the UK Government.

The seminar will provide up-to-date information, expert insight and sector preparation.

Speakers are due to include UK government officials, industry associations, destination management associations, plus legal and tax experts.

Issues to be covered include:

• Movement of people including immigration and posted workers
• Border arrangements
• Transport
• Regulation and business continuity
• Tax

To attend the event at the Barbican, register at: etoa.org/events/brexit-seminar

UPDATED GUIDANCE FROM UK TRADE BODIES

Trade bodies the Tourism Alliance and UKhospitality published updated guidance in the event of no deal last week.

This noted that the Office for Budget Responsibility forecasts a year-long recession from the end of 2019 in the event of no deal. The guidance also noted of a no‑deal exit on October 31:

• There will be no new entry requirements for UK-EU travel. But passports will need to be valid for at least six months.

• Airlines will operate to and from the UK as now.

• UK-EU coach and rail travel should “be largely unaffected”.

• There is no cut-off in the right to work for EU citizens entering Britain after October 31.

• EU citizens arriving after October 31 will have the right to remain and to apply up to December 2020.

• Mutual recognition of driving licences will end. Some EU states (France, Italy, the Netherlands) will require UK nationals have an International Driving Permit.

• European Health Insurance Cards [EHIC] will no longer be valid. Travel health insurance is recommended.

MINTEL: PACKAGE HOLIDAYS HOLD UP AS BREXIT UNCERTAINTIES CONTINUE

Market research firm Mintel has issued research and analysis around the Thomas Cook failure. It concluded that Thomas Cook’s collapse should not be confused with the demise of the package holiday market.

The volume of overseas package holidays taken by UK residents, Mintel reported, continues to grow year on year, albeit at a slower pace than pre-referendum levels. The number of overseas package holidays taken grew by 19% between 2013 and 2018, according to Office for National Statistics figures.

Mintel predicts the package-holiday market volume will grow by 1.4% in 2019, whereas the number of independently booked holidays will decline by 0.5%.

Package-holiday providers are benefitting from the financial protection offered as Brexit uncertainties instil cautious behaviour among travellers.

Gaining traveller’s trust is a key theme for the travel industry amid Brexit uncertainties, Mintel continued. 43% of holidaymakers said uncertainties around Brexit made them more cautious about booking holidays.

The domestic holiday market is also expected to prosper amid Brexit uncertainties and rising price levels.

The low value of the pound had already made more consumers decide to take a staycation in 2019 and Thomas Cook’s collapse will impact price levels until extra capacity has been added to the market.

Politics

EU SUMMIT; A NEW DEAL AND SUPER SATURDAY

Officials were locked in ‘the tunnel’ at the beginning of last week and frantic last-minute talks were held right up to the deadline day of the crucial EU summit on Thursday.

Meanwhile in the House of Lords on Monday, the Queen reopened Parliament after its longest session since the English Civil War. The speech announced 26 proposed bills spanning health, education, defence, technology, transport and crime, as well as a law to enact any deal Britain makes with the EU. Among the proposals were measures to replace free movement for EU citizens with an Australian-style points-based system after Brexit.

As journalists gathered to cover the EU summit on Thursday Jean-Claude Juncker and Boris Johnson announced that they had reached a deal.

Hopes of such an agreement had run high since a successful meeting between Boris Johnson and his Irish counterpart Leo Varadkar at the end of the previous week, which had followed gloomy predictions of a breakthrough.

The BBC said that the EU had given Boris Johnson credit for pulling off an incredible political feat – that of persuading the EU to open the withdrawal bill; dumping the backstop and also for ensuring that the EU did not cross any of their red lines – particularly that of safeguarding the Good Friday agreement and protecting the EU’s customs boarders.

Boris Johnson on the other hand has made large concessions, as while the whole of the UK will leave the EU Customs Union under the new deal, there will be a customs border between Great Britain and Northern Ireland, with goods being checked at “points of entry” in Northern Ireland.

The deal replaces the Irish backstop negotiated by former Prime Minister Theresa May.

Johnson said he was “very confident” MPs would support his deal, but it was clear that the DUP would refuse to vote in favour. Boris Johnson spent the day on Friday persuading MPs across the house to back his Brexit deal including pro-Brexit Conservative MPs that voted against May’s deal; the 23 former Tory MPs that were expelled from the party after failing to vote with the government and Labour MPs from leave consitituencies.

The Commons sat on Saturday – the first time they had sat on a Saturday since the Falklands War 37 years ago – in order for the Government to hold a ‘meaningful vote’ on the Withdrawal Bill. This didn’t happen.

Oliver Letwin – a former Tory but now independent - said that whilst he would support the Withdrawal Bill he had an amendment which would aim to close any possible loop holes to prevent a no-deal.

This amendment recommended withholding approval of the Brexit deal until legislation to implement it was in place.

Letwin’s amendment passed by 16 (322-306). This has resulted in a huge set back for the Government.

Subsequently, Boris Johnson, under a legal obligation, has had to ask the EU for an extension until 31 January 2020. However, he said to Parliament that he would refuse to negotiate with them for one.

As a result, he has sent an unsigned letter to the EU asking for an extension to the withdrawal date. Alongside this document he sent a further letter stating his and his Government’s objectives and warned against any additional delay to Brexit as it would damage UK and EU interests.

Downing Street believes the position is lawful, but legal challenges are expected.

President of the EU council Donald Tusk will now consult with EU leaders on how to react to the request for an extension.

Today, the Government will aim for another meaningful vote on the Withdrawal Agreement Bill. Speculation is that the Government has a good chance of winning it – although there are speculations that further amendments will be tabled.