Latest British tactics on Brexit

Pic--Philip Hammond hit back at Macron from Davos ( AFP/Getty Images )
Political reporter(wp/es):::

Philip Hammond today singled out the French for being the “hardest” opponents still standing in the way of a Brexit deal.

The Chancellor hit back hard after Emmanuel Macron’s economic minister declared that the European Union had “nothing to give”.

Speaking from the World Economic Forum at Davos, where he has spent three days mingling with political and finance leaders, Mr Hammond revealed that many of the other 27 EU member states were indicating in private that they would “compromise” on their “red lines” for the sake of avoiding the “significant economic disruption” of Britain crashing out without a deal.

But responding to the hardline position spelled out by his French counterpart, Bruno Le Maire, he said other countries were being warmer. “I would just observe that the French have always been the hardest in this debate,” he said. In other key developments:

Mr Hammond repeatedly refused to rule out resigning from the Government if it “chose” to pursue a no-deal Brexit. But unlike Cabinet colleague Amber Rudd he said next Tuesday’s voting in the Commons was not “high noon” and that he would wish to oversee policies to mitigate the effects of  crashing out.

Theresa May echoed the Queen’s plea for politicians clashing over Brexit to show respect for each other, saying through her spokesman that “we should always show great respect for the point of view of others”. 

The pound briefly rose on reports that the Democratic Unionist Party might soften its opposition to the withdrawal agreement if the backstop was subject to a “short time limit”. The Sun report was not confirmed.

Senior members of the 1922 Committee that represents Conservative MPs, including Sir Graham Brady and Bob Blackman, tabled a new amendment offering support to Mrs May’s deal if the backstop is removed or limited.

Speaking to BBC Radio 4’s Today programme, Mr Hammond said EU leaders were discussing moving their red lines. “I don’t think the European Union is going to change its fundamental position around the backstop,” he said. 

“But what I hear from European politicians and commentators that I have talked to here in Davos is that there is a process going on, of thinking very hard about where the EU has drawn its red lines, whether they really need to be in the place where they have been drawn.”

He suggested he was gaining ground among other EU figures that it was “not reasonable” to expect Britain to commit to a permanent backstop obligation when even EU membership could be cancelled with just two years’ notice. 

He warned Tory MPs that the EU was making clear it would not remove the backstop.

And he praised the “more nuanced position” taken by some senior MPs in pressing for a time-limit or an exit mechanism. “They understand the challenge we’ve got at home, and generally, not all of them but many of them, want to help,” he said.

However, France today took an unbending approach. Mr Le Maire said the Irish border backstop issue was “done” and it was solely up to the UK to find a way out of the impasse.

“I’m afraid we have nothing to give,” he told Today from Davos. “An agreement is an agreement and the responsibility of Brexit is clearly on the shoulders of the British government, not on the shoulders of the governments of the EU member states.

“It is up to the British government to find the right way out, not us, the European governments.”

Asked again if the backstop could be changed, the finance minister replied: “It is done. It is done and I think that we have to stick to the deal.”

Responding, Mr Hammond said: “Let me just say something about my French counterpart Bruno Le Maire. Much as I respect Bruno Le Maire, I would just observe that the French have always been the hardest in this debate... I would urge you to talk to colleagues from other European [countries]. There are 27 countries involved in this discussion and they too will have to compromise to get to a position.” On his own position, Mr Hammond refused to rule out resigning in a no-deal Brexit three times on Today and another three times on Sky. “I’m not going to speculate because a lot depends on the circumstances,” he said. But he indicated he would not walk out next week when ministers are set to be whipped to vote against amendments designed to prevent a no-deal Brexit.

“The responsibility I have is to manage the economy in what is the best interests of the British people,” he said.

Home Secretary Ms Rudd has also refused to rule out resigning in a no-deal exit, as has Business Secretary Greg Clark. Mr Hammond said no deal would be irresponsible and “a very bad outcome”. “There will be very significant disruption in the short term and a very significant hit to our economy in the medium to long term.”

He said his job was to fight in government for a compromise. The Chancellor praised the Queen after she spoke at an event in Sandringham about seeking “common ground” and “never losing sight of the bigger picture”. He said: “I think there is huge wisdom in those words.”

British holidaymakers flying to Europe warned of 3-hour airport delays with no deal

Staff reporter(wp/es):::

Millions of British holidaymakers flying to Europe this summer were today warned they face chaotic queues of up to three hours at airports in countries such as Spain, Greece and Italy in the event of a no-deal Brexit.

Tom Jenkins, chief executive of the European Tourism Association (ETOA), which represents more than 900 travel operators and tourist bodies, said extra border checks required by Brussels would bring “tourism Armageddon”.

He said immigration desks at the most popular Mediterranean destinations such as Palma de Mallorca could be overwhelmed “even with Heathrow levels of investment”.

He added passengers at airports that hit capacity after two or three arrivals would face waits of several hours. He said: “As some airports have UK arrivals coming in every 10 to 20 minutes, unless something is done now, we are going to run into major difficulties.”

Delays will be caused European Commission rules issued in November that stop Britons using lanes allocated for citizens of EU or European Economic Area countries and Switzerland if the UK crashes out on March 29.

They will require immigration staff to make four extra entry checks on British travellers: the expiry date of the passport, a database confirmation of the validity of the passport, the purpose and length of stay, and whether the visitors can support themselves financially.

This will add an estimated 90 seconds per passenger to the usual 25 seconds spent at passport control. With each plane holding an average of 200 passengers, this could cause huge delays.

Portugal said earlier this week it would introduce special passport lanes for British tourists at Faro and Funchal airports. 

However Mr Jenkins said EU member states would not unilaterally be able to relax rules imposed by Brussels. 

Speaking after an emergency ETOA conference on Brexit at the Barbican this week, he warned that in the case of no deal, British airline passengers face  “a cross between the volcanic ash cloud disruption and the three-day week”.

A spokesman for industry body Airlines UK said Britain’s major carriers had been planning for extra checks. He said: “The commission has been clear UK passengers will be treated as being from a third country and this will likely mean extra checks at the border. 

“Individual EU member states will have to plan accordingly depending on their own infrastructure needs. 

The commission has told them in no uncertain terms that they should prepare their airports for no deal.”

A UK government spokesperson said: “We welcome the proposal by the European Commission to put UK citizens on a visa-free list for short trips to the EU even in the event of no deal.

“We have been clear in our proposals that we want to ensure reciprocal measures on visa-free travel for tourists and short term business visitors with the EU.”

UK residents made a record 54.6 million visits to other EU member countries in 2017.

UK employers offer staff biggest pay rises for 10 years - survey

Business reporter(wp/reuters):::

British employers have offered staff the biggest pay rises in 10 ten years in early 2019, a survey of companies suggested on Thursday, adding to signs that historically low unemployment is beginning to translate into faster wage growth.

Annual wage deals agreed this month stood at a median 2.8 percent, compared with awards of 2.0 percent in December, according to preliminary figures collected by pay data firm XpertHR.

Official data on Tuesday showed British workers’ pay grew at the fastest pace in over 10 years, up 3.4 percent, contrasting with other signs of an economic slowdown ahead of Brexit, as unemployment holds at its lowest rate since the mid-1970s.

“Despite the uncertainty surrounding Brexit outcomes, the first pay awards of 2019 are moving in a very positive direction,” XpertHR pay and benefits editor Sheila Attwood said.

XpertHR’s wage settlement data tends to show slower rates of growth than official data, which also factors in salary increases that workers receive when they change job.

The Bank of England has said it expects pay growth to improve and its chief economist Andy Haldane said in October that there were signs of a “new dawn” for wage increases.

Assuming a relatively smooth Brexit transition, the Bank of England has said it will need to raise interest rates gradually to offset inflation pressures from the labour market.

UK mortgage lending slows in December - UK Finance

Business reporter(wp/reuters):::

British banks approved fewer mortgages last month than in November and the value of lending for home purchases rose by the smallest amount since 2016, an industry survey showed on Friday.

Seasonally-adjusted data from the UK Finance industry body showed banks approved 38,779 mortgages last month. While up more than 6 percent on a year ago, this was down from 39,205 in November.

The value of net mortgage lending increased by 1.235 billion pounds, the smallest rise since August 2016.

The figures largely add to signs of a slowdown in Britain’s housing market ahead of Brexit.

Last week the Royal Institution of Chartered Surveyors said its members had the most negative outlook for house sales over the coming three months since its records began in 1999.

UK Finance also said it saw signs that businesses were building up cash reserves, particularly in the construction and retail sectors, in preparation for uncertain trading conditions.

With little time left until Britain is due to leave the EU on March 29, there is no agreement in London on how it should exit the world’s biggest trading bloc, and a growing chance of a ‘no-deal’ exit with no provision to soften the economic shock.

UK retail sales steady in Jan after weak Christmas, big picture weak - CBI

Business reporter(wp/reuters):::

British retail sales stagnated in January following a sharp fall in December, according to an industry survey on Friday that underlined tough trading conditions for retailers ahead of Brexit.

The Confederation of British Industry’s (CBI) monthly retail sales balance rose to zero from -13 in December. A Reuters poll of economists had pointed to a reading of +2.

Despite the improvement in January, the survey largely fitted with signs that consumer spending has weakened since mid-2018, when the soccer World Cup and warm weather fuelled expenditure. Brexit has also hit consumer confidence.

Despite the limited time left before Britain is due to leave the EU on March 29, there is no agreement in London on how it should exit the world’s biggest trading bloc, and a growing chance of a ‘no-deal’ exit with no provision to soften the economic shock.

The CBI said it saw signs that some wholesalers were stockpiling goods in preparation for a no-deal Brexit.

“The High Street has had another challenging month, with retail sales volumes flat and well below average for the time year,” CBI economist Rain Newton-Smith said.

“Pressures on the retail sector remain high, with consumer spending expected to remain fairly subdued and competition fierce.”

Retail sales growth in the three months to January was the slowest since the three months to May 2018.

Queen sends a Brexit message to UK politicians: end your bickering

Royal correspondent(wp/reuters):::

Queen Elizabeth has sent a delicately coded message to Britain’s factious political class over Brexit, urging MPs to seek common ground and grasp the big picture to resolve the crisis.

With the clock ticking down to March 29, the date set in law for Britain to leave the European Union, the United Kingdom is in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project it joined in 1973.

While Elizabeth, 92, did not mention Brexit explicitly in an annual speech to her local Women’s Institute in Norfolk, the monarch said every generation faced “fresh challenges and opportunities.”

“As we look for new answers in the modern age, I for one prefer the tried and tested recipes, like speaking well of each other and respecting different points of view; coming together to seek out the common ground; and never losing sight of the bigger picture,” the queen said.

Though steeped in the conventional language the queen has made her hallmark, the remarks in the context of Britain’s crisis are a signal to politicians to sort out the turmoil that has pushed the world’s fifth largest economy to the brink.

“She’s been a gold standard monarch for very nearly 67 years now and this is a particularly gilt-edged moment, I think it’s very important what she said and how she said it,” historian Peter Hennessy said.

Buckingham Palace declined to comment though the British media was clear about the significance of her remarks. The Times’ headline read: “End Brexit feud, Queen tells warring politicians”.

As head of state, the queen remains neutral on politics in public and is unable to vote, though ahead of the 2014 referendum on Scottish independence she made a delicately crafted plea for Scots to think carefully about their future.

GOLDMAN WARNING

The future of Brexit remains unpredictable with options ranging from a disorderly exit that would spook investors across the world to a new referendum that could reverse the process.

Prime Minister Theresa May is engaged in a last-ditch bid to win support for a tweaked divorce deal after parliament this month crushed the original plan in the biggest defeat in modern British history.

The Northern Irish party which props up May’s minority government has decided to back her new deal if it includes a time limit to the Irish backstop, The Sun newspaper reported.

May has been meeting MPs to discuss a range of options on how to address concerns on the backstop, an insurance policy aimed at avoiding a hard border in Ireland should the two sides fail to agree any other solution.

“The point we are at the moment is that work is ongoing, as to what we may eventually bring forward and potentially discuss with Brussels, we are not there yet,” her spokesman said.

Sterling scaled a high of $1.3140 for the first time since Nov. 8 in Asia, before edging back to trade at $1.3095, as traders bet Brexit will be delayed. Options markets indicated sterling could rise to the mid-$1.30s.

But in a sign of the turmoil at the heart of government, finance minister Philip Hammond declined to say if he would quit if Britain left the EU without a deal that he predicted would lead to significant short-term disruption and hurt the economy.

France and other European powers said they were preparing for the worst.

Goldman Sachs will invest less in the United Kingdom if there is a difficult or hard Brexit, Chief Executive Officer David Solomon said.

“Our headcount in the UK over the last couple of years has not gone down but it hasn’t gone up either - we have added head count you know on the continent,” Solomon told the BBC in Davos.

“But I would say that, over time, if this is resolved in a difficult way or a hard way, it’ll have an impact on where we invest and where we put people,” he said.