Daily Brexit Update

September 4, 2018

• U27 to offer Theresa May a ‘carrot and stick’ approach to Brexit: The EU27 are planning a “carrot and stick” approach to Brexit at an upcoming summit, offering Theresa May warm words on the Chequers plans to take to the Conservative conference alongside a sharp warning that they need a plan for Northern Ireland within weeks. The twin statements from the EU leaders at the meeting in Salzburg later this month would seek to give the British prime minister some evidence of progress in negotiations on the future trade deal as she seeks to fight off the threat of rebelling MPs. However, under the plans being discussed among the 27, a shot would be fired across May’s bows on the issue of a backstop for Northern Ireland. May committed to agree on a plan for avoiding a hard border between Ireland and Northern Ireland. This would come into force if a trade deal or bespoke technological solution that could do the same job was not available by the end of the transition period, on 31 December 2020. The EU27 fear the British are seeking to push back the resolution of this issue into the transition period, after the UK has left the EU on 29 March 2019. Tempers have flared in recent negotiations over the issue and member states want to send a clear warning that they are not willing to let the issue remain unresolved. However, it is believed that the “zero tariffs, zero quota” offer made by Donald Tusk in March, along with fresh thinking on how to facilitate customs checks to reduce friction at the border, could be developed and packaged as a substantive counter-offer. (The Guardian)
• Concerns raised over 59-page handbook on Brexit ‘settled status’ scheme: The Home Office has issued 59 pages of guidance notes to help staff register EU citizens for a post-Brexit scheme that the former home secretary Amber Rudd said would be as easy to apply for as an online account with the clothes retailer LK Bennett. But case workers will have to read through to page 56 to discover that they should not apply the government’s hostile environment policy in their assessments. When the government unveiled details of the “settled status” programme this summer, Rudd’s successor as home secretary, Sajid Javid, said the default position would be to grant rather than refuse applications. But the government’s track record of errors in immigration enforcement and the lack of communication between the Home Office and applicants has raised concerns among lawyers who have read the guidance notes. The case worker guidance has been issued as part of a live trial of the settled status registration scheme. It started last week with the Home Office seeking to recruit 4,000 EU citizens to test the process at three Liverpool universities and 12 NHS trusts in the north-west of England. After Brexit all EU citizens will be required to sign up for settled status so as to continue working and receive benefits, including healthcare, in the UK. (The Guardian)
• New Brexit referendum backed by GMB union: The GMB union has called for a fresh Brexit referendum because the promises made during the first vote are “not the reality we are facing”. Britain’s third biggest union delivered a huge boost to the campaign for a public vote on Theresa May’s exit terms by throwing its weight behind the push. It will pile pressure on Jeremy Corbyn to switch Labour’s official policy in favour of a further referendum, ahead of an expected showdown at the party’s annual conference this month. Mr Roache, the GMB’s general secretary, said people had “voted for change”, but added: “They did not vote for economic chaos or to put jobs and hard won rights on the line. The GMB, which has 620,000 members, backed remaining in the EU at the referendum, although it admitted its members were divided. It is one of the three big unions – alongside Unite and Unison – that hold influence over Labour, not least because of its significant funding to the party. It is the first of the three to explicitly back a further referendum, although the Royal College of Nursing, Community and the transport workers’ union, the TSSA, also support one. (Independent)
• Brexit could drive up energy bills, say power firms: EDF, multinational Unilever and the UK’s energy industry body urged politicians to avoid imposing tariffs or barriers on energy trading across borders. In a letter to Jean-Claude Juncker and Theresa May, they said imposing costs on the use of interconnectors – electricity and gas cables between the UK and its European neighbours – would hit consumers and set back the battle against global warming. The free flow of energy across interconnectors was necessary to keep “a level playing field that keeps costs down for consumers and ensures decarbonisation and security of supply,” the groups said. Interconnectors currently account for 6% of British power supplies, but that share is soon expected to rise to a fifth. The letter also voiced concerns that any impact on interconnectors could hit the fight against global warming, because they are seen as useful for balancing energy supplies by guaranteeing a source of power when wind or solar power are not available. Imposition of cross-border electricity tariffs also poses a possible existential risk to the Irish single electricity market between Ireland and Northern Ireland, the letter said. Whitehall has drawn up plans to send electricity generators on barges to Northern Ireland should the market collapse as a result of the UK crashing out of the EU without a deal. Millions of UK consumers have already been hit by two rounds of price hikes this year caused by rising wholesale electricity and gas costs, so any further costs would put serious pressure on household budgets. (The Guardian)
• UK’s biggest insulin manufacturer building up four-month stockpile in case of no-deal Brexit:Britain’s biggest insulin supplier has said it is building up a four-month stockpile to ensure that diabetic patients are not left without vital medications in the event of a no-deal Brexit. Danish Novo Nordisk supplies just over half of the UK’s insulin and says it is “significantly” increasing reserves as the prospect of crashing out of the EU without a deal draws closer. Diabetes charities have warned lives could be put at risk without reliable supplies of insulin as the UK imports all its stocks of the medications. The government announced last month that it had advised companies to build up a six-week stockpile of medications against the event of no deal being reach, despite claiming this was an “unlikely” prospect. However, Novo Nordisk’s statement indicates firms are going well beyond these minimums. The firm’s 16-week stockpile will double its seven-week reserves and should be in place from January in advance of the UK’s scheduled departure date on 29 March 2019. Fellow insulin manufacturer French firm Sanofi has already pledged to hold a 14-week stockpile, increasing reserves by nearly a third. (Independent)