03
September
2019
|
10:37
Europe/London

THE LOTUS WEEKLY BREXIT ROUND-UP

Given that the weekend gets busy for Brexit, I thought it was probably best to update you on the last two full weeks!

August was always going to be busy for Boris Johnson, given the short timeline between him taking on the premiership and the 31 October deadline given by the EU.

The month has turned out to be been jam packed with major international meetings and political drama, which drove Brexit correspondents to leave their beach loungers earlier than hoped.

Ahead of the G7 summit in Biarritz, Boris Johnson met with the German Chancellor and French President and during the G7 he shared breakfast and bantz with the US President.

All these meetings were aimed to convince EU leaders that he is genuinely committed to reaching a new deal – but equally determined to press ahead with no deal on 31 October unless Brussels ditches the Irish backstop plan.

Angela Merkel meeting

In his first trip overseas as PM, Boris Johnson met with Angela Merkel in Germany on Wednesday 21 August

  • The meeting produced a friendly press conference
  • In what has been deemed by the BBC Brexitcast team as another example of misinterpretation of the two sides’ different stances, Angela Merkel talked about the possibility of a 30-day deadline for a new deal. Boris Johnson acknowledged it was now up to the UK to come up with a solution.
  • Angela Merkel was clear however, that a deal would be possible only if there was an immediate and workable alternative to the backstop.
  • The 30 day deadline refers to the fact that elements need to be decided well ahead of the EU summit of 17 October.

Meeting with Emmanuel Macron

  • The French President ruled out making concessions ahead of talks
  • But during a press conference, Macron said for the first time that the Withdrawal Agreement could be amended to allow the UK to leave the European Union with a deal.
  • He said that the deal could be amended as long as the peace process is not jeopardised and the integrity of the single market remains.

Meeting with US President at the G7

Boris Johnson met Donald Trump for the first time in his premiership at the G7 summit where they both said that they hoped to agree to a trade deal post-Brexit. The president said a ‘very big trade deal, bigger than we’ve ever had’ will be agreed before

He and Mr Johnson directed officials to launch a ‘special relationship economic working group (SREWG)’.

Trump said that Boris Johnson was the right man to deliver Brexit and Boris Johnson said that the NHS is off the table when it comes to a trade deal with the US.

Mr Johnson has warned that a trade deal with the US will not be ‘plain sailing’ and has raised a series of areas where he wants concessions from Washington.’

G7 meeting

The i newspaper said that discussions at the Biarritz summit saw Mr Johnson going out of his way to stress Britain’s common ground with Europe rather than the US including climate change, opposing trade barriers with China and rebuilding relations with Iran.

The BBC says that the EU had been concerned that Boris Johnson would agree with all of Donald Trump’s foreign policies at the G7 – but he did not do this. Instead the PM tried to keep everyone on side. All are aware that there are very big issues other than those around the pure logistics of Brexit. Germany is certainly concerned about the 100,000 jobs that are at risk if a no-deal comes to pass, but with the history of fascism in the last century looming large in collective memories, all the major leaders in the EU want to ensure that the UK is on the EU’s side for the big geo-political issues. Johnson delivered this, and with this his credibility in the eyes of the EU has been strengthened.

However, a no-deal Brexit is still very much on the cards.

The EU leaders – as well as Boris Johnson – will go ahead with that if they feel they feel they have no other political alternative.

Katya Alder, the BBC Europe editor say the EU leaders are not taking Boris Johnson seriously when he says get rid of the backstop. The EU are currently ignoring this message because:

  1. Even if they were to get rid of the backstop he doesn’t have a majority to get a new Brexit deal through
  2. They would never agree to get rid of the backstop because to do this they would be abandoning member state Ireland.
  3. They would be risking the NI peace agreement
  4. They would be voluntarily exposing their single market and when it comes to making deals with other countries or other groups of countries they would be losing face and they would be worse off than if they had a no-deal. The above might all still happen, but a no-deal means that they could point the finger of blame at the UK.

In reality, they are no further forward on the backstop issue.

Proroguing Parliament and outrage from MPs

Following an agreement amongst a cross-party group on Tuesday of this week to seize control of the Commons’ agenda to pass a brief piece of legislation blocking no deal, the PM announced on Wednesday 28 August, that he was going to prorogue – or suspend Parliament.

Three of the PM’s privy councillors went to see the Queen at her summer residence in Balmoral to gain agreement.

The Prime Minister said that he was suspending Parliament to “Bring forward a new legislative programme on crime, hospitals, education and there will be ample time on both sides of the crucial EU Summit 17 October to debate in Parliament, the EU, Brexit and all other issues.”

As a result of this, there has been a huge backlash from the opposition – the leader of the house and a number of Conservative MPs. The suspicion is that the suspension is really to make it harder for MPs to stop the Prime Minister from doing what he pleases on Brexit which is maybe taking the UK out of the EU without any formal arrangements.

Jeremy Corbyn asked the Queen for an audience to overturn her agreement on doing this, but the Palace has ignored his and others’ requests. MPs are looking to lawyers to challenge the government on this.

However, despite accusations of being a tinpot dictator, the BBC described the move as constitutionally within the rules, but politically quite extraordinary and provocative.

The BBC went on to say that there is nothing unusual for a new PM to prorogue Parliament in the autumn to come forward with a Queen’s speech to provide a menu of what they would like to do. Channel 4 reports that government prorogues parliament pretty frequently – and it normally happens on an annual basis or before a general election. It seems clear that Boris Johnson will use this time to create an election manifesto.

This particular suspension takes in three weeks of party conference season – and could be as little as an extra four days - the timing at the moment is vague – but could be as much as five weeks in total – a very ‘unusual’ amount of time says Channel 4.

The BBC’s Brexit cast team believe the proroguing will certainly make it harder for MPs on the remain side to pass a new law to try to remove any possibility to leave without a deal, although Ministers will return in the first week of September, and they do have some time to come up with alternatives to thwart the Government if they can find a united front.

But the opposition and remainers, while possibly having a larger majority in the country right now, are divided.

The BBC team also say that a new agreement will be very difficult from the UK’s point fo view, because Boris Johnson has no majority in parliament – so he’s pushing for an election – possibly in time for him to go to the EU meeting on 17 October with a majority – and then he could see if there’s a compromise. But he would need an extension to do that.

There has also been a lot of talk about the fact that proroguing signals the death of democracy, but as the BBC points out, it really depends on what your ‘version of democracy is’. Many Brexiteers believe stopping Brexit is anti-democratic and the referendum vote needs to be respected.

The move is a clear signal to the EU that it may not rely on UK MPs to stop no deal.

Ruth Davidson, leader of the Tory party in Scotland resigns siting family reasons

Without a doubt, the first move advantage of the prorogue announcement was mitigated by remainer Ruth Davidson resigning as leader of the Conservative party in Scotland. Davidson gave birth to a son in October, but her statement made clear that she was dreading the prospect of facing another election in the autumn. She had been touted as being a potential first minister for Scotland but remains as an MSP.

Business

In the meantime the UK and EU businesses with close links to the UK are more concerned than ever about a no-deal, as uncertainty continues. However, the biggest business lobby in Germany – the BDI is 100% behind Merkel and EU leaders and are not pushing them to change their minds or position in relation to the UK.

Has anything changed for travel?

Recent political developments have not made a huge difference to travel at this point. Summer 2019 has performed well, although it is likely that bookings for half term and Christmas might be impacted. Operation Yellowhammer has said that there might be delays in EU airports, while it is clear that further contingency plans are needed for Dover.

As previously reported, the pound is currently low against other currencies including the Euro and is negatively affected by the prospects of a no deal and rises with the prospects of a deal. This is likely to impact tour operators who haven’t hedged currency and holiday prices for consumers.

Office of National Statistics

Travel Weekly has reported on figures from the Office of National Statistics that the number of trips overseas from the UK fell in April by 4% and remained the same in May as last year. Inbound visits dropped in both months despite the weak pound. Spending rose by 11% in April with overall spending dropped by 3% in May.

The proportion of trips to countries outside Europe and North America fell by 4% to 2.7 million in the quarter.

Travel to the US and Canada plunged by 21% year-on-year to 800,000 while visits to European countries rose by 2% to 13.6 million.

Those taking holidays in the quarter increased by 2% to 11.2 million, business trips declined by 11% to 1.5 million, while visits to friends and relatives was pegged at 4.1 million.

A no-deal Brexit could lead to a 5% fall in overseas travel and tourism from British residents next year, according to research by Oxford Economics, The Times reported.

Meanwhile, the UK attracted 8% fewer visitors at 3.1 million in April and 6% less in May at 3.3million.

Spending in April was down by 14% at 1.6 billion and was 1% less in May at £2.1 billion.

This contributed to a 5% drop in overseas arrivals to the UK to 9.4 million in the March to May period. They spent 7% less at £5.3 billion.

Visits from North America grew by 10% to 1.2 million but numbers from other European countries fell by 6% to 6.9 million and arrivals from other countries was down by 7% to 1.2 million.

Long haul bookings up says Not Just Travel

Travel Weekly has reported that long haul bookings are up for agencies Not Just Travel and The Travel Franchise, who both saw commission records broken five times in July with long haul sales up for Australia, US, Canada and the Maldives.

Tui chief calls for European airline consolidation

Overcapacity, a challenging market and competition in the European airline market means that airlines will have to consolidate says the Chief Executive of Tui Fritz Joussen to avoid failures, and he said that they were preparing for a no-deal Brexit.

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If you have any queries or comments contact Frances Tuke; frances@wearelotus.co.uk