Gordon Brown Calls for a Second Referendum

 

Gordon Brown has become the latest in a string of high profile political figures in the UK to call for a second referendum on Brexit. According to the Daily Express, Brown plans to ‘re-enter the political fray next week joining senior Labour figures trying to thwart Brexit‘. This move was met with suspicion from those both within the Labour Party and those outside of it; time will tell how much of an influence it will have on policy of the Labour Party and the country.

It is no secret that the former Labour leader has been a long-time supporter of the European Union and has clashed with current leader, Jeremy Corbyn, over the issue and he has previously put pressure on Corbyn to change party policy.

There are arguments that almost two years on from the Referendum, people are more aware of the complexities of the issue and many who previously voted to leave have indeed now changed their minds. The referendum itself was never legally binding and so for many, it is vital to have a new, less binary, referendum which sets out the specific areas of EU policy such as membership of the Customs Union or Single Market. However, there is criticism that even with a more detailed referendum, the outcome may not be hugely successful. Opponents of the first referendum, and indeed referendums generally, would argue that they are confusing for an electorate and such important issues should not be put to the ordinary voter.

It is perhaps true to say that a majority of British people are at this point getting rather fed up with the constant talk of Brexit. Though it is indeed a critical issue and undeniably the most important issue to face the country for years, to start the whole process again with a second referendum may be detrimental to the cause that those in favour of it are fighting for.

There are further issues with demanding a second referendum in terms of the logistics of such a referendum. Since the 23rd June 2016, there have been significant changes in the politics of the United Kingdom and, at the very least there would be questions as to who would actually lead either side of the debate. Looking at the leaders of the two largest political parties, Theresa May and Jeremy Corbyn, who both campaigned for remain, it would be difficult to imagine them both leading the Remain campaign a second time round.

It is no secret that the Conservative Party has a considerable level of Euroscepticism within it and for Mrs May to come out and lead a campaign to remain in the European Union in 2018 could spell the end of her leadership of the Party. 

On the other side of the political spectrum, Corbyn is not the ideal candidate to lead a renewed charge back to the EU either. He and many of his vocal supporters have been Eurosceptics their entire career, and to limp back to the EU now would not suit their long-term political ambitions.

The other contender to lead the Remain side would be Liberal Democrat leader, Vince Cable. The Lib Dems are arguably the only completely pro-EU major Party in Britain and would be an obvious choice to lead the campaign to remain. However, they have enjoyed limited electoral success in recent elections and they are still facing the hangover from the coalition years. It is clear, that a second referendum would cause major splits in what is already a fragile political landscape.

Overall, it is not untrue to say that for many, the call for a second referendum coming from a previous prime minister is not something that will go down particularly well. Every time a political figure from previous years appears on the current political system, the British public tends to react with suspicion and often hostility. To call for a second referendum on the UK’s membership of the European Union is a bold move for Gordon Brown. There are endless arguments against a second referendum and in the words of Brenda from Bristol, ‘Not another one!’.

Article 127: The possible savior from a Hard Brexit

In what was clearly a campaign of misinformation, the British public was mistakingly assured that a vote to leave the EU meant leaving the Single Market, despite the promise in the Conservative manifesto stating otherwise. However, as the Brexit debacle deepens it has become clear that this was not the case. Far from it. Indeed, what Brexiteers have failed to mention is that our membership of the European Union is separate to that of the Single Market. It is not governed by Article 50, but Article 127- a different agreement altogether.

For those not aware of such a caveat, Article 127 derives from the 1994 European Economic Area Agreement. Here, the EU extended Single Market membership to three non-EU nations: Lichtenstein, Iceland, and Norway. As a result, these nations were given access to the free movement of people, goods, and services from a range of other EEA participants.  The United Kingdom, in its own right, is a signatory to this agreement and is also a member of the EU.

In recent months, much debate has surrounded whether the government actually needs to trigger Article 127 to cease membership of the EEA, or as Brexiteers have argued, withdraw automatically under Article 126 (1) of the Agreement. Unlike Article 127, under Article 126 the “Agreement shall apply to the territories to which the Treaty establishing the European Economic Community is applied and under the conditions laid down in that Treaty, and to the territories of Iceland, the Principality of Liechtenstein and the Kingdom of Norway.”

Unsurprisingly, the ambiguity of such legal jargon culminated in a dispute between the UK Government and Single Market Justice (SJM) campaign in 2017. This group has claimed that because the UK is a separate ‘contracting party’ (under Article 127), leaving the European Union does not automatically result in a cessation of EEA membership. As a result, it is viewed that because British EEA membership is enshrined in UK law through Parliament’s 1993 Agreement Act, then triggering Article 127 would require parliamentary approval.

Initially, the government seemed to accept the argument. Upon challenging the Government through the Divisional Court on the topic of Article 127, the SMJ reported that the Government accepted that Article 126 does not “give rise to the termination of the EEA Agreement ipso jure”. Yet, surprisingly, the Department for Exiting the European Union seemed to somewhat u-turn, stating that the EEA Agreement will “no longer be relevant for the UK“, “it will have no practical effect” and therefore “we do not envisage a vote”.

Taking stock of this and our constitutional arrangments, it is clear the UK is indeed a separate ‘contracting party’ to this agreement. This can be seen in the fact that EU membership is enshrined within the 1972 European Community Act, not the 1993 EEA Agreement Act- an entirely separate piece of legislation. With this in mind then enacting Article 127 must require a vote that bears no influence on or link to the Withdrawal Bill.

With the House of Lords adding amendments to keep the UK within the EEA and the desire to stay in the EEA growing due to increasing problems with economic stability and the Irish Border, the legal ramifications of Article 127 could yet keep the UK in the Single Market.

EU label Tory Brexit strategy a ‘fantasy’

Negotiations with the EU have once again hit a dead-end as the EU labelled Theresa Mays proposals a ‘fantasy’ and that her latest customs plan would halt progress. The UK is still unable to overcome the problem of the Irish Border.

A senior EU official said the UK still lacked negotiating positions on a wide variety of issues and that it was “chasing the fantasy of denying the consequences of Brexit in a given policy area”.

If talks continue like this, a Brussels official close to Brexit negotiations warns that there would be no progress by the June meeting of the European Council.

News that Theresa May wants to align the whole UK with the customs union and single market on a time-limited basis until 2023 as a backstop to solve the Irish border issue was particularly poorly received in Brussels.
People familiar with the talks confirmed that this policy had already been raised by UK negotiators and that European Commission’s negotiators have already rejected the plan before its public announcement.

It would also mean the UK would take 7 years to exit and fully implement its Brexit plan.

“The regulatory alignment option is not available on the all-UK basis because it would amount to selective participation on the single market,” the senior EU official said, adding that the backstop “cannot be time-limited”.
“A backstop that would be strictly time-limited would defeat the purpose of a backstop,” they said, before making clear that the Prime Minister’s plan for a UK-wide backstop would have to be withdrawn if progress is to be made at the June European summit.

Analysis from Iwan Doherty- Editor in Chief

The Conservatives continue to be unable to solve the Irish Border problem, the EU know they have the UK caught between ‘securing its borders’ and satisfying the Good Friday Agreement. Theresa May’s commitment to end freedom of movement is causing her headaches, that not even watering down Labour’s plan can solve.

With the Customs Partnership now rejected May may have to turn to the plan outlined by Keir Starmer in creating a customs union with the EU or stay in either the customs union or the single market. However stronger Brexiteers might now opt to move to a Canadian style trade agreement with the EU, but fitting the Good Friday Agreement into Brexit is proving very challenging. Theresa May must be thankful that Stormont remains empty and therefore unable to pick the gaping holes in her plans.

The Brexiteers in her cabinet, however, are less than useless. The architects of Brexit have yet to bring 1 idea to the table and that former Remains are now doing all the work is a testament to how ridiculous Brexit has become.

To end this dispute, put the ball in the EU’s court.  Ask what they want to do to solve the Irish Border problem. If Westminster hasn’t got any ideas maybe Brussels does. The EU doesn’t want a hard border in Ireland, and tackling the problem from that direction will come to better results.

Brexit is looking softer by the day, and with EEA membership seemingly discarded, the future of our economy seems to be slipping into an abyss whilst reclaiming nothing from the EU.

Theresa May caught lying over Brexit….. again

It has been revealed that the UK is legally bound to pay it’s £39bn Brexit divorce bill before the details of a trade deal with the EU are agreed. This is a change to Theresa May’s promise that “nothing is agreed until everything is agreed”. This statement alluded to the fact that if Britain were to not get a trade deal it would not pay it’s divorce bill, a statement that has turned out to be completely false.

MPs will be asked to authorize the payment when they vote on the withdrawal deal in Parliament later this year. With the withdrawal agreed the EU would have no obligation to pursue a trade deal. The EU will include a political declaration to pursue a trade deal within the agreement but will be no legal obligation to do so.

Most independent auditors believe the divorce bill will be higher than the estimated £39bn.

Meanwhile, The Cabinet remains divided on Theresa May’s customs partnership, that would see the UK collect tariffs on behalf of the EU and include a time-limited customs backstop, which would keep the UK aligned with the EU on customs.  However, it is rumoured that this proposal will be rejected by the EU if the backstop would cease to exist in 2020.

Analysis from Iwan Doherty- Editor in Chief

The Conservatives lying to the population is not new. In recent cases, it has been to try and help their image but time and again this government has been caught lying over Brexit, not because they need to hide the truth but because they themselves don’t know what the truth.

We have seen this administration fail to grasp the basics of negotiating with the EU. Even those who have campaigned to leave the EU all their political career do not understand its basic internal and external economic workings. This has caused them to be disappointed by the realities of Brexit, whilst being completely outmanoeuvred by the EU.

Our lead negotiator David Davis showed his complete lack of understanding of the EU single market when he stated: “a UK-German deal would include free access for their cars and industrial goods, in exchange for a deal on everything else”. This is not possible under EU law. You negotiate deals with the EU, not individual countries.

Incompetence is driving us towards a Brexit cliff with no plan for what comes after. The complete idiocy and blindness of the government when negotiating Brexit has caused us to have countless problems whilst failing to exploit the advantages Brexit could hold.

Five Questions We Should All Be Asking Brexiteers

It has been nearly two years since around 17.4 million Britons voted to leave the European Union. Yet, as The People’s Vote have indicated, each one of those 17.4 million Leavers voted for a variety of reasons. There were a number of pledges made in the Leave camp, from Boris Johnson’s lies regarding extra funding for the NHS, to greater sovereignty outside European jurisdiction.

And nearly two years on, we still have no idea where the Conservative government is leading us.

Alongside this, we have a much greater understanding of the implications of Brexit than we did in the run-up to the referendum.

Overall, any form of Brexit will have a negative impact on the country. A Hard Brexit, which Theresa May has intended to deliver, looks to be economically catastrophic.

Yet, despite this, support for May remains strong. Is this a sign that a majority of the electorate demands a Hard Brexit?

If true, it is a necessity to challenge the Hard Brexiteers. I want to ask them some simple questions concerning Brexit, and I want them to clarify their reasons for their decisions.

Do you want the economy to strengthen?

If so, then we should not implement a Hard Brexit. Though a Hard Brexit means we would leave the Customs Union and the Single Market, multiple organisations have proved that in nearly every single economic scenario, Britain shall be worse off leaving the EU.  The Office for Budget Responsibility state Brexit will make the UK economy 4.8% smaller, a hit of £100bn to our economy.  

Even if we were to stay in the Single Market and keep the Customs Union but lose control over negotiating European legislation, it is an option considerably economically stronger than a Hard Brexit. However to stay in both the customs union and the EEA and lose our seats in the European Parliament would be a strange move, and at that point Remaining within the EU should surely be back on the table.

As a member of the EU, we have been given a hugely vibrant, strong European market to trade and exchange with.

But surely we can establish new trade deals with other nations? True. However, the UK could be waiting until 2045 until deals with the USA, China, India, Australia and New Zealand can be reached.

Leaving the Single Market and Customs Union will mean food prices will rise and wages will decrease against inflation. No one wants this.

 

Do you want the UK to retain a high employment rate?

Then a Hard Brexit will certainly not guarantee retaining employment levels. It is estimated that the Single Market is linked to 3.3 million jobs in the UK. But even with a diminishing economy, many more of our jobs at risk. Jeremy Corbyn is wrong to pledge ‘jobs for many, not the few’ alongside the advocation of a Hard Brexit. He needs to enforce this, or lose the next General Election and much of his youth-driven support.

Leaving the single market would threaten 1 in 10 jobs in this country, leaving it could be a fatal stimulus dropping us into recession. The uncertainty of Brexit has already seen growth slow to a near standstill, with the UK economy growing at 0.1% in the first quarter of 2018, the economic risk of clattering out of the single market should not be underestimated.

Furthermore, with the thought that May might implement a Hard Brexit, EU immigrants who help drive our economy are less attracted to coming to the UK, decreasing the capacity of a range of sectors, from agriculture to education. More than 2,300 EU academics have resigned from UK universities because they are fearful of their future. And farmers are turning to China; there is much more demand for work in China, whereas EU immigrants who work in the agricultural sector are more concerned than ever regarding their place in the UK.

 

Do you want the UK to continue to increase its funding of the NHS? New housing? The environment?

A Hard Brexit will diminish the power to do so. Boris Johnson’s unacceptable lies during the run-up to the referendum must be accounted for – there will be no more extra NHS funding, particularly as the economy diminishes. There has also been speculation that the NHS will be part of a US-UK trade deal, increasing the price of drugs supplied by the NHS.

What we have to acknowledge is, with a diminishing economy, it also diminishes our capacity to improve housing, improve the environment, improve education. We will struggle to improve anything.

Brexit is estimated to mean a £36bn hit to tax revenue. That’s nearly equivalent to the budget for education for 5-16yr olds. Brexit will only lead to more cuts and the lengthening of austerity.

The UN has stated that environmental protections will significantly weaken post-Brexit. The construction sector has been hit with a blow in Scotland due to higher labour costs. And the UK will fall in global higher education standards after Brexit.

With a Hard Brexit, we will be unable to fund and build upon the foundations of British society which urgently need attention.

 

Do you want tighter immigration rules?

A Hard Brexit might not guarantee this. Yes, the UK will have the power to restrict its net migration levels. But India has already insisted that any trade deal post-Brexit will have to include an eased restriction on Indian-UK migration. New trade deals with other nations might also include an ease on immigration rules.

However, the biggest con the leave campaign managed to pull was on immigration. The EU, in Directive 2004/38/EC gives member states the clear right to deport migrants if they do not meet certain criteria, ie if they become a burden on the state.

What this means, is that the government recognise our level of immigration as being healthy for our country. Not only towards the economy but also due to our demographic needs.

Migrants remain a net benefit to the taxpayer, which the British native is not. EU migrants are a net benefit to the taxpayer to the tune of £20bn. Reducing immigration will mean higher taxes for the rest of us.

It is also worth noting with our ageing population we need more young working taxpayers to prop up the older generation.

Migrants are a necessity to this country.

 

Do you want to enjoy travelling on holiday to Europe?

It will be much harder to do so with a Hard Brexit. Prices for holidays have risen by 6%, according to Thomas Cook, whilst we might have to pay and apply for visas if we wish to travel to Europe post-Brexit. And it was only recently that the EU halted extra roaming charges whilst abroad.

Freedom of movement is a benefit we must cherish to explore and understand new cultures. It is a benefit which we take for granted.

 

If to any of these questions you disagree, I’d like you to think again.

Look how beneficial the EU is to Britain. Look how far we will falter if we apply a Hard Brexit. Do you want this? No. No one wanted this.

We voted to leave. But with greater knowledge of the implications of Brexit, we also have the opportunity to look again and change our minds. Would you continue to proceed the purchase of a house knowing that there were major issues with it?

Leavers are adamant that life outside the EU will provide the power to change society. But they are wrong.

Their views are based upon a major misconception surrounding the source of Britain’s issues. The referendum was a chance to provide the public with change, meaning the EU was targeted as the source of our issues. This is incorrect.

Instead of blaming the EU, let us blame the Conservative governments who have been in power. We have seen a reduced annual increase in the NHS from each Tory government. Homelessness is on the rise. Wages have gone backwards under the Conservatives.

Don’t blame the EU. This is a UK, national issue.

Yes, the EU is not perfect. But, as proven, it is hugely beneficial to our society. Let us indicate that the result of the referendum was not to do with our discontent with the EU, but our discontent with issues at home – our discontent with our own government.

We must realise that we are sovereign. We are not completely ‘held back’ by the EU. We have the power to change our society, but Tory governments have stopped us from doing so.

There is a mirage around the Conservatives. Driven by economics, they pledge prosperity – which only reaches the highest earners. Yet lower income earners continue to believe that the Tories are going to make a difference…except they never will. It is this ongoing belief that those of lower income will eventually prosper due to Tory ‘promises’ which holds the Conservatives up.

Lower income earners must understand that Tory promises are lies. A Hard Brexit will not increase low-earners’ standard of living. Standards of living will continue to decrease.

So we must all speak out against the Tories. Whatever your income level, your social status, your occupation – a Hard Brexit will be hideous for all. And this includes Labour.

Corbyn has shown he is also an advocate for Brexit. It is hardly a vote ‘for the people’. His ambiguity regarding Brexit is running thin.

He is not a man of the people if he chooses to allow a Hard Brexit.

We voted to leave. But we now must realise that leaving will not be beneficial. Let us push for a People’s Vote and reject a Hard Brexit. This will be the only route to regain control of our society and allow Britain to flourish once again.

May to add Tory peers in attempt to control Lords’ Brexit rebellions

Following numerous setbacks to Brexit in the House of Lords, Theresa May will add 10 new Tory peers to try and boost progress in the upper chamber. She will also hand 1 peerage to the DUP. The addition of new peers is designed to help the government pass more Brexit legislation without further amendments.

The Lords have been the principal opposition to Brexit having voted against the government 15 times. Most recently, they voted to guarantee equal environmental protections after Brexit as guaranteed by EU law. Other notable votes in the Lords have included guaranteeing the rights of EU citizens living in the UK, keeping the EU rights charter, and making staying in the EEA a primary negotiating target.

The government has so far reversed its defeats but the revising chamber remains a problem for Theresa May and her Brexiteers. They see these amendments as a limit to their executive power and freedom in negotiating Brexit.

The 11 Brexiteers that will be added (10 Tory and 1 DUP) will be joined by 3 Labour peers. Labour’s decision to add more peers to the chamber was criticised by Labour Remainer Lord Andrew Adonis, saying “I’m very surprised that the Labour party is playing this game by agreeing to make a small number of peers because it legitimises the actions of the Tories.”

The 11 additions are unlikely to make a huge difference. The government has been defeated by far more than 11 votes in most of its defeats. The last defeat, on environmental protections, was by a majority of 5o. The Conservatives will not hold a majority in a chamber made up of 780 peers, although full attendance is extremely rare. The move has been criticised as a desperate attempt to force through the government’s Brexit agenda and can be seen as a major flaw in the House of Lords.

Analysis from Iwan Doherty – Editor in Chief

As a socialist, it is very rare for me to support the House of Lords. However, their role as a force for good as a technocratic, yet unelected, revising chamber in the Brexit process cannot be denied. My respect for the Lords and the system has dramatically increased. It’s not perfect, as this story shows, but having a technocratic chamber to control and refine populism is something we would be worse without.

Too often, the referendum result has been bandied around as an excuse for the seizure of power from Parliament by the government. The Lords have done a good job in creating practical solutions to problems that the government has been unable or unwilling to solve.

The House of Lords have gone much further to calm the worries about Brexit than the government itself. Its attempts to guarantee human rights, environmental protections, and rights for EU citizens are what the government should have done. The fact the Conservatives have been embarrassed so many times doesn’t show the Lord’s resilience, but shows how abstract and unrealistic the government’s plans have been.

However, the fact that the Prime Minister can simply create more peers to try and get her way shows a serious flaw in the Lords. It is not only a mistake by the May to try and subvert our Parliamentary democracy like this, but it is also a mistake in the system.

The government is keen to get a free hand to negotiate Brexit. However, considering the Tory record on negotiations and political policy to date, it is wise to make sure Parliament, not Whitehall, is the ultimate power in the Brexit process, as the Leave campaign wanted.

Johnson calls May’s Brexit customs union plan crazy

Theresa May’s plan to pursue a customs union deal with the EU post-Brexit has provoked a revolt from high-level members of her cabinet. Boris Johnson has labelled the plans ‘crazy’ and stated it would create “a whole new web of bureaucracy”.

The plan, which is similar to the one outlined by Keir Starmer in Labour’s Brexit plan, has been opposed by other cabinet Brexiteers.

Despite the EU apparently being open to the arrangement and it being a solution to the Irish Border problem, the hard Brexiteers within the cabinet are not pleased with the plan. They see the attempt to make the transition out of the EU and trade with the EU easier as a bad move as it will mean the UK will not be completely separate from the EU. Despite Johnson’s criticisms the Brexiteers both in and outside the cabinet have yet to suggest a realistic solution of their own to the Irish Border problem.

Nonetheless, with the feud within the cabinet becoming public, Theresa May might see her position as PM threatened. The powerful Brexiteers may use the threat of a vote of no confidence to ensure May shelves the customs union idea.

Business secretary Greg Clark has stated anything other than a close customs arrangement would risk thousands of jobs. Chancellor Phillip Hammond is also a supporter of a customs union.

These developments follow the House of Lords arranging a vote on an amendment to the EU withdrawal bill which would keep the UK within the EEA. The Brexit committee also urged the government not to rule out EEA membership and said the UK should consider membership of EFTA after Brexit.

The goings on at Whitehall have also provoked action amongst Labour supporters. Keir Starmer has designed Labour’s Brexit policy to be just softer than the government’s. This move by Theresa May may bring the supporters of EEA membership within Labour Party finally out into the open. Stephen Kinnock MP wrote an opinion in the Guardian this morning supporting EEA membership. Many MPs and a large percentage of the membership support EEA membership and with a need to retain it’s Remain voting supporters it might now make electoral sense for Labour to back EEA membership.

However, with more socialist members of the party resistant to the single market Labour might be left with an identical Brexit policy to the government. Emily Thornberry has spoken out against EEA membership telling Labour members it will not work.  She said a “British bespoke deal” was needed instead.

Nevertheless, Labour may become increasingly tempted to back EEA membership especially with the rise in support for the Liberal Democrats in the recent local elections.

Analysis from Iwan Doherty, Editor in Chief

This is now the second time Theresa May has copied Labour’s proposals on Brexit but the PM copying Keir Starmer’s work is not a bad thing. This is another short burst of realistic thinking from the government but our negotiators have really lacked creativity and we are paying the price for that.

Johnson is right. It may well limit our freedom to trade with outside nations, if negotiated badly, and create more bureaucracy but the Brexiteers have yet to make a single realistic suggestion of how to solve the problems we face as a nation. May needs to start making practical suggestions, or they will remain on the backfoot in negotiations that the EU has dominated so far.

A customs union negoiated properly that will allow us the freedom to strike trade deals with other nations but bide us to some EU regulation could be a very attractive option, if Davis and co can grind out such a deal in Brussels.

Whether the Brexiteers will allow May to pursue a customs union is another question. Without any ideas of their own, they would be left to diffuse the bomb that is Brexit with no tools and no clue and whilst they may hate the idea of a Remainer pursuing a moderate Brexit their own political survival might be important to them.

I fully expect a large faction of Labour to start supporting EEA membership, but Labour should be careful not to alienate voters outside of London who see freedom of movement as a key reason for their vote for Brexit.

Brexit: The rocky issue of Gibraltar

During the campaign of the Brexit referendum, very little or almost nothing was debated about the consequences of leaving the EU with respect to the British Overseas Territory of Gibraltar. One might think the importance of the fate of over 30,000 British citizens is minor compared to the outcome of a whole nation, but try to tell that to the Gibraltarians who voted to remain with an overwhelming 96% choosing to stay in the EU. This massive support to the Remain campaign cannot be read as an unconditional love to the EU and its values but more likely as an attempt to protect their own status quo.

 

Gibraltar’s economy is very strong. Many bookmakers and online gaming companies operate from the Rock due to their very favourable corporate tax regime. Tourism benefits from VAT free in goods and services and a special tax treatment for international business saw the growth of private banking and other branches of financial services. There is no surprise only 4% voted to leave the EU. The Gibraltarians voted indeed with their wallet and not with their heart knowing that an exit from the EU could jeopardize their financial stability.

 

About 13,000 people, 8,000 of them Spaniards, walk into Gibraltar to work each day. It’s estimated that Gibraltar spend around €500m a year on Spanish goods and services. Their non-official language is llanito, an English-Andalusian Spanish dialect unique to Gibraltar. Such is the depth of the relation forged in the area that the local trade unions and heads of commerce have constant meetings to highlight the importance of a smooth border and “a sensible, orderly and well-managed Brexit”.

 

It’s not a surprise that the common sense seen in the locals is nowhere to be seen in both Governments. Spain could use this opportunity to try to get Gibraltar back and fulfill an obsession that has lasted for centuries and if Madrid uses its veto in the Brexit negotiations to exclude Gibraltar from any Brexit deal between the EU and the UK, Gibraltarian authorities have threatened with rescinding the rights and protections enjoyed by Spanish and other EU nationals living and working in the territory. This outcome will be an immense disaster in the region, in particular to Gibraltar’s Spanish neighbours, the town of La Línea de la Concepción, which grew up on the trade from Gibraltar.

 

As we have seen in Northern Ireland, Governments are too quick to forget recent History. Twice have the Gibraltarians voted to stay British and in both occasions (1967 and 2002) by an impressive majority. Whether their reasons are economical or patriotic the llanitos wish to remain British so any attempt from the Spanish Government to get Gibraltar back will only add more anguish to an already delicate future post Brexit. Avoiding a hard border should be a priority. Under the dictatorship of Franco the border was permanently closed in 1967. He did not like the result of their referendum. Darkness grew in the area. Families were separated on either side. Everyone remembers the images of grandmothers meeting their grandkids over the fence. The economic consequences in the region were also extremely severe. Politicians might have forgotten the pain but the resentment is still palpable in the population and so is the fear to be isolated once again. The border was only reopened to pedestrians in 1983 and fully to vehicles ahead of Spain’s entry to the EU in 1985.

 

In an ironic twist the llanos face again the uncertainty of a future they voted vastly against. Their financial paradise is in danger and only time will tell how British they will remain if their status quo is compromised. The solution is not for Spain to try and regain the Rock, but to offer Gibraltar and the British Government a new diplomatic route towards a new and adventurous bilateral status. This could give the Gibraltarians the best of both worlds. That will require a huge amount of good will and imagination. An almost impossible task against the clock but one that is needed if we are to avoid history repeating itself.

Brexit- a disaster for London’s finances

The City. The beating heart of the economy, the nation’s prized treasure – a treasure worth £124.2bn in Gross Value Added in 2017. London’s financial dominance dates back to the 19th century; from coordinating commerce and trade across the Empire, the City has managed to sustain its position at the epicentre of European finance since the opening of the Bank of England in 1694.

Yet the power of the City is under attack; Frankfurt, Dublin and Paris, keen to predate on the lucrative world of London banking, now have Brexit as their weapon for shifting the dominance to the continental mainland. Lloyd Blankfein’s tweet of the “great weather” in Frankfurt is evidence of the danger that a severing from the single market could pose; an outcome that could reshape the structure of the British economy.

Financial services play an essential role in the success of the UK economy. The City employs 454,700 people amongst 3030 financial and insurance firms, which account for 13% of London’s output. At 2013 prices, the sector has grown 50% since 1997 and London dominates the Clearing business, processing euro-denominated derivatives worth $900bn a day. A source of some of the highest skilled workers from the UK and abroad, it is also the largest contributor to the Treasury – tax receipts totalled £66bn in 2015/16. It is also the largest source of British exports – with a £18.5bn trade surplus with the EU in financial services, the loss of this sector to the continental mainland could result in further worsening of the UK’s current account deficit, alongside a further weakening of sterling.

All this, together with the collective lobbying of the financial powerhouses, suggests that the UK will make it a priority to retain the passport rights than enable UK financial services to operate across the Channel. Yet Michel Barnier’s emphatic statement that “there is not a single trade agreement that is open to financial services” is the foundation of uncertainty across the City; an uncertainty that could drive the banks to relocate abroad. At current, banks operate under a passport system – the home country of a financial institution ensures it follows the EU’s ‘single rulebook’, a centralised regulatory framework that replaced mutual recognition of national laws in the aftermath of the Financial Crisis. This allows banks residing in London to access the single market – an access that ends with Brexit.

Such could be mitigated by remaining in the EEA, whereby the UK would have access to the single market on the condition that it applied all EU financial regulation – an outcome that could provoke criticism for failing to deliver the sovereignty promised by Brexit. The UK would lose the ability to influence regulatory changes, particularly significant at current since a number of ‘review clauses’ in the post-crisis rulebook are currently being activated. Thus the UK would remain shackled to the Brussels bureaucrats and unable to impose its liberal views on the legislature – as epitomised by the EU’s consideration of a cap on bankers bonuses, fiercely opposed by the UK. For the once mighty British Empire to subserve itself to unelected European bureaucrats will likely prove a political crime that could spell the end of May’s government in the next general election; and as such, the banks have reason to fear their interest may not be preserved.

In the event of differences in regulation, navigation of the immensely complex channels of financial law will prove highly costly for the financial powerhouses. The EU’s rulebook runs for thousands of pages, a regulatory maze that provides an impetus to relocate to continental front-runners, who are eager to prey on London’s demise. Contingency plans are already being forced into action – with Standard Chartered setting up a Frankfurt subsidiary and Morgan Stanley boosting it’s Dublin office, EY has predicted 10,000 jobs could be lost immediately if no deal is agreed. Brussels’ swift rejection of a plan by a consortium of City executives for mutual regulatory recognition is sufficient evidence for banks to begin forming expectations of their place in the final Brexit deal – an expectation that will see their profits drop and markets blocked.

Yet rational banks will also consider the long-term issues arising from Brexit, particularly one that sits deep within the hearts of Brexiteers – migration. Despite having the largest concentration of financial knowledge in the EU, potential restrictions to the future labour movement in conjunction with a fall in incoming talent from constraints to university ERASMUS programmes could serve to diminish the pool of talent available to London employers, making the EU a more attractive alternative if freedom of movement is curtailed.

The financial system is the engine of the British economy, a national treasure around which domestic policy revolves. Yet analysis of the current evidence suggests that the City is a prime target for an exogenous shock by Brexit, creating a strong incentive to venture out of banking’s European home for the past two centuries and begin a new era on continental land. Whether the allures of the single market are sufficient to overcome London’s unique benefits of English language, skilled workforce and economies of agglomeration – which reduce operating costs across the financial spectrum – is dependent on the final deal agreed amongst the politicians. The banks are braced for the incoming storm; and it appears almost certain that whilst London may not lose its dominance, the Brussels shockwave will likely leave the City in a worse relative position than it has been since before the colonial era.

We should all want Keir Starmer negotiating in Brussels

Whilst it was Jeremy Corbyn who gave the speech announcing that Labour, if in power, would seek to create a Custom Union with the European Union, the man behind Labour’s Brexit policy is the Shadow Secretary of State for Exiting the European Union, Keir Starmer. A man who when appointed to this role was unlucky; he was a potential future leader who is now tasked to stand up and read out statements that most Labour party members hate to hear.

 

Thus far, Starmer has delivered a masterclass in skill, competence, and (mostly) political strategy. He has walked the tight rope of Brexit, balancing the realities of leaving the EU with the referendum result.

 

His proposal on a transition period made economic and political sense. Not only did it provide businesses with confidence and security, if the UK is going to be paying in to EU budgets until 2020 we might as well make the most of the EU’s Single Market. This was a proposal so good that it was immediately copied by the Tories.

 

Yesterday’s announcements marked more genius. A slight move towards a softer Brexit which would solve the Irish border problem that has confounded David Davis. This move was also welcomed by businesses; the CBI hailed the proposal a Brexit that put “jobs and living standards first”. Unions have seemed equally keen, UNITE general secretary Len McCluskey said: “Jeremy Corbyn has shown that people really do have a choice on Brexit.”

 

Starmer’s move is clearly perceived as a move that will help the post Brexit economy but critically not endanger the desires of many Leave voters on immigration and having EU laws enforced upon them. It marked for the first time in the Brexit process creative thinking by a major party of how to solve the key issue of the Irish border.

 

His realistic yet optimistic approach has yet again shown to be superior to that of the government when the EU rejected the government’s trade deal and reiterated that the UK “will only be a trade agreement” because Ms May has refused to stay in the Customs Union and Single Market.” The EU has stated that friction would be added to trade due to the customs checks on goods flowing in and out of the EU, but there could be no tariffs and quotas.

 

You can see the difference in thinking between the two parties. Whilst Davis is constrained by the fanatics in his own party the Labour leadership have given Starmer a free hand to find the best deal for all sections of the Labour Party, and the country.

 

But whilst Starmer has taken the problems of Brexit seriously on an economic level, it is party politics where he has truly done well. Labour are divided on Brexit, less so than the Tories in parliament but very much so in the polling booth. Around 35% of their voters in 2015 went on to vote Leave, yet the majority of their constituencies were supported Leave. Labour has had to satisfy Leavers who wanted controls on immigration alongside it’s metropolitan vote who were scared of the impact of losing membership of the Single Market. His tactic surrounding Brexit seems to have come from the London Underground. Clever at minding the gap between Labour’s position and Theresa May’s. This strategy has kept Leavers on side as he delivers the results of the referendum, whilst keeping Remainers, reluctant to defect to an untrustworthy Liberal Democrat resistance to Brexit, voting Labour. By caring about the views of those who voted Remain he has centre ground remainers previously reluctant or unwilling to vote for Labour supporting the party. Both the announcement of wanting the transitional deal and wanting a Customs Union prompted messages to be sent my way about how a friend or family member would now vote for them. It has truly been a master strategy.

 

When Theresa May lost her majority on June 8th, it was of my opinion that she should form a cross party negotiating team for handling the EU. It would have greatly increased the strength of the British negotiators and reduced parliamentary squabbling. It would also have allowed us to get a deal not decided by hard right Brexiteers. The remain vote, who seem to have been put in a box marked ‘not relevant’, would have some influence on their future outside the EU. However, it would allow for her party’s and perhaps won her survival in the long term.

 

Instead the Tories have made every mistake whilst Labour have outmanoeuvred them. If an unlikely general election were to come before the end of the Brexit process, getting Keir Starmer negotiating in Brussels would be one of huge positives of a Labour win.