The Bank of England governor has rubbished a key Boris Johnson claim for avoiding economic damage after a no-deal Brexit, in a severe blow to the Tory leadership favourite.
Mr Johnson dismissed fears about crashing out of the EU by arguing the UK could still enjoy tariff-free trade under what is known as “Gatt 24”, until a permanent agreement was struck. But Mark Carney pointed out the trade law could only be invoked if there was an agreement in place – and the central point of a no-deal Brexit was the absence of a deal.
“The Gatt rules are clear. Gatt 24 applies if you have a [withdrawal] agreement, not if you’ve decided not to have an agreement, or you have been unable to come to an agreement,” he told the BBC.
“We should be clear that not having an agreement with the European Union would mean that there are tariffs, automatically – because the Europeans have to apply the same rules to us as they apply to everyone else.”
Alistair Burt, a former minister and supporter of Jeremy Hunt, Mr Johnson’s rival, said: “You have got to be on top of the detail – no-deal would be very dangerous.”
To use Article 24 of the General Agreement on Tariffs and Trade (Gatt) – avoiding tariffs on goods – a trade agreement must be agreed in principle, rather than be an aspiration.
Its use also needs the two sides to agree, meaning the UK could not simply impose it on the EU after a crash-out departure.
During Tuesday night’s TV debate, Mr Johnson was challenged by Rory Stewart on the import taxes – and therefore border controls – that would be required on agricultural goods crossing to and from the Republic.
He replied: “There will be no tariffs, there will be no quotas, because what we want to do is get a standstill in our current arrangements under Gatt 24 – or whatever it happens to be – until such time that we have negotiated an FTA [Free Trade Agreement].”
The answer appeared to betray the former foreign secretary’s lack of detailed knowledge, a persistent criticism of his record in office.
The UK has signed a crucial free trading deal with South Korea – Asia’s fourth largest economy – that will be seen as a huge boost to morale in the Brexit camp.
International Trade Secretary Liam Fox signed the zero-tariff deal with his South Korean counterpart Yoo Myung-hee in Seoul. It marks the first post-Brexit trade deal the UK has secured in Asia and is broadly in line with the terms of the existing Korea-EU free trade agreement.
Philip Hammond, Britain’s chancellor of the exchequer, says there is a “clear majority” in Parliament which is against the U.K. leaving the European Union without a deal.
South Korean exports include cars, car parts and electronic equipment and the deal will provide stability to the UK whether or not it leaves the EU with a deal. The UK is South Korea’s 19th largest trading partner and second largest among EU members.
The UK and South Korea have signed an in principle free trade agreement (FTA) that seeks to maintain existing trade arrangements post-Brexit.
Ms Yoo said.: “The deal is significant as it eased uncertainties sparked by Brexit, amid the already challenging environment for exports on the escalating trade row between Washington and Beijing.”
So far the UK has agreed “continuity” deals with 12 countries and regions, including Israel, Norway and Iceland, Switzerland and Chile.
Jean-Claude Juncker said he was “crystal clear” there will be no renegotiation of the Brexit deal, despite claims from several candidates in the U.K. Conservative leadership race that they will reopen talks with Brussels.
The European Commission president will meet Theresa May, who will be replaced as prime minister when a new Tory leader is elected this summer, ahead of an EU summit in Brussels on Tuesday evening.
Arriving at the summit, where leaders, including May, will discuss the European election results and begin the process of choosing the next European Council and Commission presidents, Juncker said his view on Brexit and the Withdrawal Agreement was unchanged: “There will be no renegotiation.”
Meanwhile Luxembourg’s prime minister Xavier Bettel told the BBC that a renegotiation under a new British prime minister was “not how it’s going to work.”
Several contenders to succeed May have indicated they will seek to renegotiate. Brexiteer figurehead Boris Johnson has written in the Telegraph about striking “a good bargain” with Brussels, while keeping the option of no-deal on the table, while Foreign Secretary Jeremy Hunt, told BBC Radio 4’s Today program on Tuesday that he wanted to form a new negotiating team including Brexiteer MPs, and the Northern Irish Democratic Unionist Party to renegotiate the Irish backstop plan.
Former Brexit Secretary Dominic Raab, who is also planning to run for the leadership, has said he will “fight for a fairer deal in Brussels with negotiations to change the backstop arrangements.”
Arriving in Brussels, May herself said that Brexit was now “a matter for my successor” but warned that the next prime minister would have to “find a way of addressing the very strongly held views on both sides of this issue, and to do that and get a majority in parliament.” The task, she said would require “compromise,” reiterating her view that the government should strive for a deal with the EU.
Asked whether she would play a role in selecting the new European Council and Commission presidents, May said the U.K would “continue to play a constructive role during the time of this extension of Article 50.”
FILE PHOTO: The wording on a slogan is changed after letters fell away from the backdrop as Britain’s Prime Minister Theresa May addresses the Conservative Party conference in Manchester, Britain, October 4, 2017. REUTERS/Phil Noble/File Photo
Speech Theresa May delivered in London; May 21, 2019
I became Prime Minister almost three years ago – immediately after the British people voted to leave the European Union. My aim was – and is – to deliver Brexit and help our country move beyond the division of the referendum and into a better future. A country that works for everyone. Where everyone has the chance to get on in life and to go as far as their own talent and hard work can take them. That is a goal that I believe can still unite our country.
I knew that delivering Brexit was not going to be simple or straightforward. The result in 2016 was decisive, but it was close. The challenge of taking Brexit from the simplicity of the choice on the ballot paper to the complexity of resetting the country’s relationship with 27 of its nearest neighbours was always going to be huge.
While it has proved even harder than I anticipated, I continue to believe that the best way to make a success of Brexit is to negotiate a good exit deal with the EU as the basis of a new deep and special partnership for the future. That was my pitch to be leader of the Conservative Party and Prime Minister. That is what I set out in my Lancaster House speech and that was what my Party’s election manifesto said in 2017.
That is in essence what the Labour Party’s election manifesto stated too. And over 80% of the electorate backed parties which stood to deliver Brexit by leaving with a deal.
We have worked hard to deliver that – but we have not yet managed it. I have tried everything I possibly can to find a way through.
It is true that initially I wanted to achieve this predominantly on the back of Conservative and DUP votes. In our Parliamentary system, that is simply how you normally get things done. I sought the changes MPs demanded. I offered to give up the job I love earlier than I would like. And on 29th March – the day we were meant to leave the EU – if just 30 MPs had voted differently we would have passed the Withdrawal Agreement. And we would be leaving the EU. But it was not enough.
So I took the difficult decision to try to reach a cross-party deal on Brexit. Many MPs on both sides were unsettled by this. But I believe it was the right thing to do. We engaged in six weeks of serious talks with the Opposition, offering to compromise. But in the end those talks were not enough for Labour to reach an agreement with us. But I do not think that means we should give up.
The House of Commons voted to trigger Article 50. And the majority of MPs say they want to deliver the result of the referendum. So I think we need to help them find a way. And I believe there is now one last chance to do that. I have listened to concerns from across the political spectrum. I have done all I can to address them. And today I am making a serious offer to MPs across Parliament. A new Brexit deal.
As part of that deal I will continue to make the case for the Conservative Party to be united behind a policy that can deliver Brexit. 9 out of 10 Conservative MPs have already given the Withdrawal Agreement their backing and I want to reach out to every single one of my colleagues to make the very best offer I can to them. We came together around an amendment from Sir Graham Brady – and this gave rise to the work on Alternative Arrangements to the backstop.
Although it is not possible for those to replace the backstop in the Withdrawal Agreement, we can start the work now to ensure they are a viable alternative. So as part of the new Brexit deal we will place the government under a legal obligation to seek to conclude Alternative Arrangements by December 2020 so that we can avoid any need for the backstop coming into force.
I have also listened to Unionist concerns about the backstop. So the new Brexit deal goes further to address these. It will commit that, should the backstop come into force, the Government will ensure that Great Britain will stay aligned with Northern Ireland. We will prohibit the proposal that a future Government could split Northern Ireland off from the UK’s customs territory.
And we will deliver on our commitments to Northern Ireland in the December 2017 Joint Report in full. We will implement paragraph 50 of the Joint Report in law. The Northern Ireland Assembly and Executive will have to give their consent on a cross-community basis for new regulations which are added to the backstop. And we will work with our Confidence and Supply Partners on how these commitments should be entrenched in law.
This new Brexit deal contains significant further changes to protect the economic and constitutional integrity of the United Kingdom and deliver Brexit. It is a bespoke solution that answers the unique concerns of all parts of the community in Northern Ireland.
But the reality is that after three attempts to secure Parliamentary agreement, we will not leave the European Union unless we have a deal that can command wider cross-party support. That’s why I sat down with the Opposition. I have been serious about listening to views across the House throughout this process. That is why when two Labour MPs, Lisa Nandy and Gareth Snell, put forward their proposals to give Parliament a bigger say in the next phase of the negotiations I listened to them.
So the new Brexit deal will set out in law that the House of Commons will approve the UK’s objectives for the negotiations on our future relationship with the EU and they will approve the treaties governing that relationship before the Government signs them. And while the talks with the opposition did not reach a comprehensive agreement, we did make significant progress in a number of areas. Like on workers’ rights. I am absolutely committed to the UK continuing to lead the way on this issue.
But I understand people want guarantees. And I am happy to give them. So the new Brexit deal will offer new safeguards to ensure these standards are always met. We will introduce a new Workers’ Rights Bill to ensure UK workers enjoy rights that are every bit as good as, or better than, those provided for by EU rules. And we will discuss further amendments with trade unions and business.
The new Brexit deal will also guarantee there will be no change in the level of environmental protection when we leave the EU. And we will establish a new independent Office of Environmental Protection to uphold the highest environmental standards and enforce compliance.
The new Brexit deal will also place a legal duty on the Government to seek as close to frictionless trade with the EU in goods as possible, subject to being outside the Single Market and ending freedom of movement.
In order to deliver this, the UK will maintain common rules with the EU for goods and agri-food products that are relevant to checks at the border. This will be particularly important for our manufacturing firms and trade unions, protecting thousands of jobs that depend on just-in-time supply chains.
The most difficult area is the question of customs. At the heart of delivering Brexit lies a tension between the strength of our ambition to seize the new opportunities that Brexit presents – and the need to protect the jobs and prosperity that are built on an interconnected relationship with other European economies. This ambition should not be divisive. There are many people who voted to Leave who also want to retain close trading links with Europe. Just as there are many people – like myself – who voted to Remain and yet are excited by the new opportunities that Brexit presents.
Indeed I believe that one of the great opportunities of leaving the European Union is the ability to have an independent trade policy and to benefit from the new jobs and industries that can result from deepening our trade ties with partners across every continent of the world. But I have never believed that this should come at the expense of the jobs and livelihoods that are sustained by our existing trade with the EU. And to protect these, both the Government and the Opposition agree that we must have as close as possible to frictionless trade at the UK-EU border.
Now the Government has already put a proposal which delivers the benefits of a customs union but with the ability for the UK to determine its own trade and development policy. Labour are both sceptical of our ability to negotiate that and don’t believe an independent trade policy is in the national interest. They would prefer a comprehensive customs union – with a UK say in EU trade policy but with the EU negotiating on our behalf. If we are going to pass the Withdrawal Agreement Bill and deliver Brexit, we must resolve this difference.
As part of the cross-party discussions the government offered a compromise option of a temporary customs union on goods only, including a UK say in relevant EU trade policy and an ability to change the arrangement, so a future government could move it in its preferred direction. We were not able to agree this as part of our cross-party talks – so it is right that Parliament should have the opportunity to resolve this during the passage of the Bill and decide between the government’s proposal and a compromise option. And so the Government will commit in law to let Parliament decide this issue, and to reflect the outcome of this process in legislation.
I have also listened carefully to those who have been arguing for a Second Referendum. I have made my own view clear on this many times. I do not believe this is a route that we should take, because I think we should be implementing the result of the first referendum, not asking the British people to vote in a second one. But I recognise the genuine and sincere strength of feeling across the House on this important issue. The Government will therefore include in the Withdrawal Agreement Bill at introduction a requirement to vote on whether to hold a second referendum. This must take place before the Withdrawal Agreement can be ratified.
And if the House of Commons were to vote for a referendum, it would be requiring the Government to make provisions for such a referendum – including legislation if it wanted to ratify the Withdrawal Agreement. So to those MPs who want a second referendum to confirm the deal: you need a deal and therefore a Withdrawal Agreement Bill to make it happen. So let it have its Second Reading and then make your case to Parliament.
Finally, we cannot expect MPs to vote on the same two documents they previously rejected. So we will seek changes to the political declaration to reflect this new deal.
So our New Brexit Deal makes a ten-point offer to everyone in Parliament who wants to deliver the result of the referendum.
One – the Government will seek to conclude Alternative Arrangements to replace the backstop by December 2020, so that it never needs to be used.
Two – a commitment that, should the backstop come into force, the Government will ensure that Great Britain will stay aligned with Northern Ireland.
Three – the negotiating objectives and final treaties for our future relationship with the EU will have to be approved by MPs.
Four – a new Workers’ Rights Bill that guarantees workers’ rights will be no less favourable than in the EU.
Five – there will be no change in the level of environmental protection when we leave the EU.
Six – the UK will seek as close to frictionless trade in goods with the EU as possible while outside the single market and ending free movement.
Seven – we will keep up to date with EU rules for goods and agri-food products that are relevant to checks at border protecting the thousands of jobs that depend on just-in-time supply chains.
Eight – the Government will bring forward a customs compromise for MPs to decide on to break the deadlock.
Nine – there will be a vote for MPs on whether the deal should be subject to a referendum.
And ten – there will be a legal duty to secure changes to the political declaration to reflect this new deal.
All of these commitments will be guaranteed in law – so they will endure at least for this Parliament.
The revised deal will deliver on the result of the referendum. And only by voting for the Withdrawal Agreement Bill at Second Reading, can MPs provide the vehicle Parliament needs to determine how we leave the EU. So if MPs vote against the Second Reading of this Bill – they are voting to stop Brexit. If they do so, the consequences could hardly be greater.
Reject this deal and leaving the EU with a negotiated deal any time soon will be dead in the water. And what would we do then? Some suggest leaving without a deal. But whatever you think of that outcome – Parliament has been clear it will do all it can to stop it.
If not no deal, then it would have to be a General Election or a second referendum that could lead to revocation – and no Brexit at all. Who believes that a General Election at this moment – when we have still not yet delivered on what people instructed us to do – is in the national interest? I do not. And my views on second referendum are well known.
Look at what this debate is doing to our politics. Extending it for months more – perhaps indefinitely – risks opening the door to a nightmare future of permanently polarised politics. Look around the world and consider the health of liberal democratic politics. And look across the United Kingdom and consider the impact of failing to deliver on the clear instruction of the British people in a lawful referendum. We do not have to take that path. Instead, we can deliver Brexit.
All the changes I have set out today have the simple aim of building support in Parliament to do that. I believe there is a majority to be won for a Brexit deal in the House of Commons. And by passing a deal we can actually get Brexit done – and move our country forwards. If we can do so, I passionately believe that we can seize the opportunities that I know lie ahead.
The world is changing fast. Our young people will enjoy opportunities in the future that my generation could have never dreamed of. This is a great time to be alive. A great future awaits the United Kingdom. And we have all we need as a nation to make a success of the 2020s and the 2030s. But we will not do so as long as our politics remains stuck in an endless debate on Brexit.
We all have to take some responsibility for the fact that we are in this impasse – and we all have a responsibility to do what we can to get out of it. The biggest problem with Britain today is its politics. And we can fix that. With the right Brexit deal, we can end this corrosive debate. We can get out of the EU political structures – the Parliament, the Commission, the Council of Ministers that are remote from our lives – and put our own Parliament back in sovereign control of our destiny.
We can stop British laws being enforced by a European court and instead make our own Supreme Court is genuinely supreme. We can end free movement and design an immigration system based around skills that work for our economy and society. We can stop making vast annual payments to the EU budget and instead spend our own money on our own priorities like the NHS. We can get out of the Common Fisheries Policy and the Common Agricultural Policy, and design our own systems around our own needs and resources. We can do all of these things.
And by leaving with a deal we can do so much more besides. By reaching an agreement with our EU trading partners we can keep tariff barriers down and goods flowing friction-free across borders. Protecting jobs, and setting our firms up for future success. We can guarantee workers’ rights and environmental protections. With a deal we can keep our close security partnerships – and keep working together to keep people safe. We can ensure that the challenge of the land border between Northern Ireland and Ireland is met in a way that works for people on both sides.
This is a huge opportunity for the United Kingdom. Out of the EU, out of ever closer union, free to do things differently. And doing so in a way that protects jobs, protects our security, maintains a close relationship with our friends and works for the whole United Kingdom. It is practical. It is responsible. It is deliverable. And right now, it is slipping away from us.
We risk losing a great opportunity. This deal is not the final word on our future relationship with the EU – it is a stepping stone to reach that future. A future where the people of the UK determine the road ahead for the country we all love. This deal lays the groundwork – and settles many of the core issues.
But in the years ahead, Parliament will be able to debate, decide and refine the exact nature of our relationship with the EU. Some will want us to draw closer, others will want us to become more distant. Both sides can make their case in the months and years ahead.
The key thing is, decisions will be made not by MEPs or Commissioners or the EU Council – but by the United Kingdom Parliament, elected by the British people. That is what being an independent nation state is all about. Those debates, those decisions, are for the future. What matters now is honouring the result of the referendum and seizing the opportunity that is right before us. So we are making a new offer to find common ground in Parliament. That is now the only way to deliver Brexit.
Over the next two weeks the government will be making the case for this deal in Parliament, in the media and in the country. On what is best and right for our country now and in the future. And on what the majority of British people of all political persuasions want to see happen.
Tomorrow I will make a statement to the House of Commons. And there will opportunities throughout the Bill for MPs on all sides to have their say. But I say with conviction to every MP of every party – I have compromised. Now I ask you to compromise too.
We have been given a clear instruction by the people we are supposed to represent. So help me find a way to honour that instruction, move our country and our politics forward, and build the better future that all of us want to see.
Labour leader Jeremy Corbyn and shadow home secretary Diane Abbott chatted to youngsters using a climbing wall Credit: Danny Lawson/PA
Labour Deputy Leader Tom Watson believes the key to Labour’s vote holding up on May 23rd is portraying the election as a choice between the “nasty nationalism of the Farage Brexit Party” and “the tolerant, compassionate outward-looking patriotism of the Labour Party”/Sienna @siennamarla
Cross-party Brexit talks resumed Monday… again.
More than five weeks after the negotiations first began, you might have assumed they would only be ongoing because at least one participant thought progress was being made. But that’s not the case.
I believe there has been a genuine desire on both sides to come to an agreement, yet – as I’ve said before in this email – both leaders have been constrained by their parties.
While Brexiteers were naturally always opposed to the idea of softening of Brexit to win Labour votes, Theresa May has now also been advised by more Remain-y cabinet ministers previously supportive of the talks to pull the plug according to The Times. Philip Hammond, Amber Rudd, et al. reckon it is now time for government-sponsored indicative votes. (Whether the Prime Minister goes down that route or launches directly into the riskier withdrawal agreement bill process remains to be seen. The latter could be more successful as explained here.)
On the Labour side, Keir Starmer has gone public with his view that no Brexit deal can get through the Commons without a referendum attached, as this is a red line for so many Labour MPs. And describing Labour as the “remain and reform party” (a characterisation not recognised by multiple frontbenchers, nor the leader), Tom Watson repeated the Shadow Brexit Secretary’s estimated parliamentary arithmetic this morning. The government was never going to grant the wish of a public vote, so the notion of a Labour-Tory deal has been successfully quashed by PVers.
Labour’s deputy leader has been stepping up his calls for the party to shift on Brexit in the run-up to the European elections taking place in just 10 days. Last week, we reported on the second Future Britain Group meeting, which saw Watson set out a campaign strategy and express concerns about the possibility that Remain-supporting Labour voters will abstain on May 23rd. Today, he will deliver much the same message at a memorial lecture for the late former leader John Smith.
“If John was alive today… I have no doubt that he would have taken a stand very similar to that of his deputy, Margaret Beckett, and backed a People’s Vote as a way out of this destructive mess,” Watson will say at the Fabian event.
He believes the key to Labour’s vote holding up on May 23rd is portraying the election as a choice between the “nasty nationalism of the Farage Brexit Party” and “the tolerant, compassionate outward-looking patriotism of the Labour Party”.
The hope is that this approach also plays into the ‘Farage paradox‘. The latest poll shows the Brexit Party getting more votes than Labour and the Tories combined, however.
