Brexit

Boris Johnson and Ursula von der Leyen pictured on Wednesday night in BrusselsDowning Street has refused to confirm whether it will agree to the EU’s newly unveiled no deal contingency plans, which were published earlier today, but has said it will “look closely” at the proposals. Boris Johnson’s spokesman did, however, signal that the prime minister would not accept the fisheries proposal put forward by the European Commission. When asked if the UK would agree to the measures – which involve the EU continuing to have access to UK waters – he told reporters the PM would not “accept arrangements … which are incompatible with our status as an independent coastal state”. “I think as we’ve said throughout the negotiations, once we leave the end of the transition period, we will take back control of our waters,” the spokesman said.It comes after the EU announced new measures today in the event that a trade agreement is not reached by the end of the weekend, and a no-deal Brexit becomes more likely than ever. Ursula von der Leyen, EU Commission president, unveiled the plans via her Twitter account, explaining negotiations were “still ongoing” but that “the end of the transition is near”.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayShow latest update
1607612029The last supper: A look at history’s most important political mealsBoris Johnson’s three-course meal with EU Commission boss, Ursula von der Leyen, last night could amount to a historic “last supper” – the final, fateful moment it became clear a Brexit trade deal was destined to die.The pair tucked into pumpkin soup with scallops, then steamed turbot and mashed potatoes, followed by pavlova with exotic fruit for pudding. The fish starter and fish main course were painfully ironic – since neither side have been able to digest the other’s demands on fishing rights.  But they left no room for compromise, with both sides sounding extremely downbeat on the chances of an agreement afterwards.Naturally, my colleague, Adam Forrest, has rounded up some of the most significant meals in political history:Sam Hancock10 December 2020 14:531607611619PM’s audience with Queen postponed due to trade talksBoris Johnson’s audience with the Queen was postponed this week to allow the prime minister to focus on the post-Brexit trade deal talks, as he tries desperately to get a trade deal through before Sunday.While Mr Johnson usually telephones the monarch every Wednesday evening to update her on Government matters, there was no record of the audience in the Court Circular this week. Buckingham Palace confirmed the Queen would speak with the PM next week, with a Palace spokesman telling the PA news agency: “The audience was postponed due to the prime minister’s busy diary. One is planned for next week.”Sam Hancock10 December 2020 14:461607610927Fishing disputes could be the deal breaker, source saysThe UK could never accept arrangements on fishing with the European Union which do not fit with its status as an independent coastal state, Sky News reported a British source as saying in response to EU no-deal Brexit contingency plans.“We would never accept arrangements and access to UK fishing waters and which are incompatible with our future status as an independent coastal state,” the unnamed government source said, Sky reported.Earlier, the European Commission proposed that Britain and the EU continue to offer reciprocal access to their fishing waters for up to a year, potentially easing tension around one of the most emotive sticking points in the trade negotiations.Read more about the EU’s contigency plans here:Zoe Tidman10 December 2020 14:351607610147CBI boss says Brexit ‘progress relies on political leadership’Back in the UK, the Confederation of British Industry’s deputy director-general has urged both sides to put people’s “jobs and livelihoods above politics”.“Shifting deadlines are already costing companies,” Josh Hardie said. “So getting a deal is vital to protect businesses, jobs and living standards across Europe already under strain from the pandemic.”He added: “Progress relies on political leadership, which is needed now more than ever to avoid a costly, damaging and divisive no-deal scenario.”Additional reporting by PAZoe Tidman10 December 2020 14:221607609637EU summit: Images show leaders arrivingOver in Brussels today, EU leaders are gathering for a summit – but they are not expected to devote lots of time to Brexit. “We will not have a long debate on Brexit,” summit chair Charles Michel said, adding he expected the European Commission to update leaders on the status of talks towards a new trade deal.Here’s some pictures from the summit so far: More

The European Commission has brought forward new contingency plans for a Brexit no-deal,  warning that the risk of an agreement not being reached is now “significant”.The move comes after talks between Commission president Ursula von der Leyen and Boris Johnson in Brussels last night ended with little sign of a breakthrough.The package contains regulations to ensure flights can continue between the UK and EU, as well as “basic road connectivity”, with an initial six month duration.But it also includes a plan to allow continued “reciprocal access” for fishing fleet operate in British and European waters, that is likely to prove more controversial with Brexiteers.The inclusion of the fishing clause, which calls for “continued reciprocal access by EU and UK vessels to each other’s waters after 31 December 2020” in the light of “the importance of fisheries for the economic livelihood of many communities”, raises the prospect that side-deals with the UK to mitigate the most damaging aspects of a no-deal could be dependent on continued access for fishing.Some of the regulations would also be dependent on the UK maintaining a level playing field and not undercutting the EU in sectors like road haulage.“Disruption will happen with or without an agreement between the EU and the UK on their future relationship,” the Commission said in a statement.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekday”This is the natural consequence of the United Kingdom’s decision to leave the Union and to no longer participate in the EU single market and customs union.”Britain is leaving the single market and customs union at the end of the year and the disruption to trade this will cause is expected to be significantly more acute without a free trade agreement to replace it.The UK has the option of extending the transition period until July, but Boris Johnson declined to do so, a decision also backed by Labour.Ms von der Leyen said: “Negotiations are still ongoing. However, given that the end of the transition is very near, there is no guarantee that if and when an agreement is found, it can enter into force on time. “Our responsibility is to be prepared for all eventualities, including not having a deal in place with the UK on 1 January 2021. That is why we are coming forward with these measures today.”Negotiators are reconvening in Brussels on Thursday for last-ditch talks, with both sides having agreed to decide on Sunday whether they are worth continuing further. Speaking in the Commons on Thursday morning, Cabinet Office minister Penny Mordaunt indicated that the end of the week was not however a hard deadline for a Brexit trade deal.Asked by eurosceptic MP Peter Bone whether 13 December was the final deadline for talks, Ms Mordaunt told the House of Commons: “There is a very, very firm deadline which is the end of this year.“We will carry on negotiating until there is no hope left. The statement made yesterday would indicate that Sunday, unless there is progress made, may well be that deadline.”
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The UK is poised to crash out of the EU’s single market and customs union at the end of December 2020, unless a free trade deal agreement can be forged in the next couple of days.  The Brexit negotiating teams have been telling us for months that fishing rights remain one of the biggest sticking points. So what’s at stake for both sides? And could a trade deal really break down because of fish?What do both sides want when it comes to fish?The UK is widely regarded to have been given a raw deal under the previously EU common fisheries policy, and Boris Johnson’s government has been agitating for a new settlement to rectify this and symbolise post-Brexit new “sovereignty”.No 10 negotiator David Frost is thought to have been pushing for up to 80 per cent of the stock EU fleets have been entitled to catch in British waters to be handed over to British fleets – but is said to have lowered its demand to between 50 to 60 per cent in recent days.
But Brussels negotiator Michel Barnier reportedly offered the UK only 15 to 18 of the bloc’s fishing rights in British waters at the end of November. Downing Street sources described the proposed figures as “derisory”, dealing a blow to those who hoped the issue could be sorted out in early December.What about a transition period for fishing rights, so everyone can adjust?Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayThe UK is believed to have offered a three-year “phase-in” to give EU fishing fleets more time to adjust to some level of reduction in their catch in British waters.
The EU has been keen to see a much longer period of adjustment for European vessels, with Brussels said to have demanded 10 years of “total access” to British waters last week.
There have been reports in recent days that the UK is prepared to allow a phase-in period of up to five years access – but Brussels would have to hand back at least 50 per cent of its current access (much more than the 15 to 18 per cent said to have been offered). More

For most Britons, the impact of the UK’s transition to Brexit will first be noticed when they go to the supermarket to stock up on food and drink after the festive break.With or without a deal, departure from the EU’s single market and customs union is likely to mean stores having to raise prices and may leave them with gaps on the shelves as supplies of certain foods run short.The UK imports around 45 per cent of its food, with 26 per cent coming from the EU and the remainder from the rest of the world. European imports come mainly from the Netherlands (14 per cent of the total value of EU goods), Germany (11 per cent), Ireland (10 per cent) and France (10 per cent).That makes Britain vulnerable to the disruption in the flow of traffic from the continent which the government admits is likely due to the additional red tape resulting from Brexit, including more than 200 million extra customs declarations annually.If no free trade agreement is secured and ratified by 31 December, tariffs averaging 18 per cent will be imposed on food and drink imported from the continent, with retailers likely to pass some if not all of this additional cost onto consumers. An 18 per cent hike on products making up around a quarter of the typical shopping basket would push the UK’s average £45-a-head weekly spend on food and drink up by around £2.At the same time, no-deal would mean additional costs averaging 23 per cent on sales to the EU, making UK food and drink exporters less competitive and eating into their profits.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayThe Food and Drink Federation’s head of international trade Dominic Goudie described a no-deal outcome as “catastrophic” for UK supply chains, and said it was “highly likely” that any additional financial burdens would have to be passed on to consumers.But even if Boris Johnson gets a deal with Brussels, there will still be a big financial burden on importers and exporters from extra red tape, including customs declarations, health certification and rules of origin checks. If passed on to customers, this alone could push prices up by 3 per cent.Any rise in food prices will hit the poorest hardest, as food purchases make up the largest proportion of their spending.And with or without a deal, delays are expected at key ports like Dover and Folkestone, with the government’s own worst-case planning scenario suggesting traffic across the straits could be reduced to 60-80 per cent of normal levels, with waits of as much as two days.UK authorities have deferred the full implementation of new paperwork to July, and can be expected to wave food deliveries through where possible. So initially at least, queues of lorries are more likely to be seen on the Kent side of the Channel than in France.However, any delays will put consignments of perishable goods like seafood and salads at risk. And there are fears that a proportion of EU-based hauliers will be discouraged by the additional friction from making the trip to the UK at all, cutting the total amount of produce arriving from Europe.While no one expects an overall food shortage, it is possible that particular products will be harder to find. Britain relies on European trade for most of its onions, mushrooms, tomatoes and salad, and for a critical portion of many other vegetables and fruits. Meanwhile, failure to resolve issues relating to organic produce could mean UK suppliers being frozen out of the EU and Northern Ireland markets.Mr Goudie said that delays are “inevitable” and warned that stockpiles of produce in the UK are currently low as a result of the coronavirus outbreak.“While our industry has demonstrated remarkable resilience during the Covid-19 pandemic, many businesses have used up stockpiles that had been built for a no-deal Brexit to cope with increased demand,” he said. “Staff have also been redeployed to respond to the Covid-19 crisis and as a result many businesses have fewer available resources to dedicate to preparing for the end of the transition period.“While we are working closely with the UK government to highlight the issues at stake for food and drink, we are deeply concerned that even a thin Brexit deal will mean impossible deadlines for UK manufacturers that depend on highly integrated UK-EU just-in-time supply chains.”The FDF is calling for an amnesty period following the formal transition to post-Brexit arrangements on 31 December, to allow companies time to make changes in areas like food labelling and new border requirements. “Failure to do this will undermine choice and value for UK shoppers,” said Mr Goudie.“We anticipate impacts on product availability and on prices but it is hard to predict what that will look like as the added trade friction is likely to lead to a mixture of over and under-supply which will be equally damaging for manufacturers.”Uncertainty is greatest in Northern Ireland, with goods traveling from the British mainland subject to new customs and health checks on arrival.Under the terms of the Northern Ireland Protocol signed by Mr Johnson in 2019, these measures are required for any goods which could enter the EU by crossing the border into the Republic.The UK government has claimed the EU could use the protocol to impose an effective blockade on food supplies to the North, and has threatened to breach international law to prevent this happening. 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On 31 December the post-Brexit transition period ends and, with or without a free trade deal with the European Union, the UK will start life outside the EU’s single market and customs union.That will, pretty much all economists tell us, have a substantial economic impact on our lives.  But what exactly will those impacts be – and how will ordinary people experience them?
Below we describe how the two varieties of Brexit are likely to impact house prices and mortgages – two areas which people commonly equate with their wealth and personal finances.Leaving the EU with a free trade deal would, according to the Treasury’s independent Office for Budget Responsibility be a long-term drag on the economy, reducing economic output by around 4 per cent relative to otherwise.
But it would mean any short-term disruption, above and beyond the huge coronavirus impact, would be avoided.
Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayDuring the lockdown earlier this year the housing market largely ground to a halt, with the number of transactions collapsing in April.But the traded price of the average house hasn’t collapsed this year. And the market has been bolstered by a stamp duty holiday from the chancellor announced in the summer, which lasts until March 2021.All this suggests that leaving the EU with a successful trade deal probably won’t have a short-term negative impact on house prices.
In the longer term, the price of housing will be determined by the balance of supply of new housing and the demand for it and also interest rates. Moving from EU membership to a free-trade deal with the bloc is unlikely to directly influence these major structural determinants.As for mortgages, most borrowers’ repayments are indirectly determined by the main national interest rate set by the Bank of England. Leaving the EU with a trade deal would be a more benign economic scenario from the point of view of the Bank’s rate setting committee.It might bring forward the date at which the Bank raises rates, relative to a no-deal scenario on 31 December. And that could push up mortgage repayments for many households.Yet the Bank is mindful of the overall economy, which is still in the grip of the coronavirus emergency, and financial markets are not expecting significant rate rises from the Bank any time soon, whether there is a Brexit deal or not.Some surveyors are nervous about the impact of a no-deal Brexit on the UK housing market.  Several cite it, alongside the impact of Covid, in the latest survey by the Royal Institution of Chartered Surveyors (RICS) as a potential dampener on the market.  If unemployment rises sharply next year because of the coronavirus crisis and a no-deal Brexit that’s unlikely to be positive for house prices.Yet it’s hard to say with any confidence that house prices would fall in the event of a no-deal Brexit, especially as they have held up extraordinarily well in the face of the coronavirus crisis, which has seen the biggest shock to the UK economy in some three hundred years.
As for mortgages, financial markets are currently pricing in the Bank of England cutting interest rates below zero in the coming months to help support the economy. Many analysts think a no-deal Brexit could be the factor that pushes the Bank to take such a plunge into negative territory for the first time.While negative interest rates probably wouldn’t result in a fall in average mortgage repayments from their current ultra-low levels, it would ensure they didn’t rise.  This could help cushion the financial blow of a no-deal Brexit for some households. But for those who work in sectors such as manufacturing, which are especially exposed to the shock of a no-deal Brexit, the bigger threat to their livelihoods would probably be redundancy than rising mortgage repayments. More

Dominic Raab has dismissed supermarket warnings of food price hikes and potential shortages if there is a no-deal Brexit as “bumps along the road”.
Tesco has predicted average rises of 5 per cent – with much bigger increases feared on some meats – and is stockpiling non-fresh food, to prepare for disruptions to supplies.But Mr Raab said he was “not concerned” about the impact on shoppers, arguing higher tariffs were “a very minor proportion of what goes into food prices” and 50 per cent of supplies were domestic.
Any price hikes would be “very much at the margin” and other future free trade deals would create “opportunities in other areas to reduce food prices over the medium term”, the Foreign Secretary argued.
“We’ve got quite diverse food supply food supply chains,” Mr Raab told BBC Breakfast, adding: “I’m not concerned about either the supermarket cupboards running bare, or the cost of food prices.  “Equally, there will be some bumps along the road if we don’t get the free trade deal – that’s the inevitable consequence of change – but we’ll be well braced and well prepared to deal with those.”On Tesco’s warning of 5 per cent price hikes, he said: “I don’t think that’s the figure that we recognise” – but failed to provide a different one.
Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayMr Raab also hinted the trade talks with the EU could continue past Sunday, despite Boris Johnson and Ursula von der Leyen, setting the latest deadline after their Wednesday night summit.
Carrying on into next week – with deadline of 31 December for crashing out of the transition period then little more than two weeks away – was “unlikely, but I can’t rule anything out”.Later, in a separate interview, the Foreign Secretary called Sunday “a moment of finality”, but denied it was a firm cut-off date – adding one could “never say never”.
He also revealed he had not spoken to the prime minister since he returned from the Brussels dinner, despite being his deputy and being sent out for morning interviews.The talks remained mired in deep disagreements over fair competition rules, fishing rights and how to police any deal, despite months of negotiations.
Ms von der Leyen said the two sides were still “far apart”, while Downing Street said “very large gaps remain”.
Talks between the UK’s chief negotiator David Frost and the Michel Barnier, his EU equivalent, will resume in Brussels on Thursday, but with little apparent hope of progress.
In no-compromise comments, Mr Raab vowed the UK would not “sacrifice” its ability to control fishing waters and laws on standards to achieve a trade deal with the EU.
“No other country would accept that and nor would the EU in terms of its dealings with third countries,” he said – insisting the UK had shown “pragmatism” during the negotiations.
“On the fisheries, we’ve accepted that there needs to be some sort of transitional period but we must be able to control access to our own waters,” Mr Raab said.
Insisting the UK was “not going to be treated…in a way that no other country would accept,” he added: “It’s about some basic respect for democratic principles.” More