Politico: Boris Johnson loses Brexit bite in Biarritz

The Sunday Times reported that U.K. government lawyers put the financial obligation in the event of no deal at between £7 billion and £10 billion, but following the Tusk meeting, Downing Street declined to put a figure on it. [...]

There was also a sense of anti-climax about Johnson’s challenge to Donald Trump on trade. The prime minister had positioned himself before the summit as a defender of the principles of free trade and open economies. But in comments to the press ahead of his one-hour meeting with the U.S. president, amid bellicose rhetoric from Trump on China, Johnson mustered only what he admitted was a “faint, sheep-like note of our view on the trade war.” [...]

In a reminder of the battle waiting for him at home, former Chancellor Philip Hammond sent a strongly worded letter on Sunday demanding Downing Street withdraw anonymous briefings that last week suggested a former minister was responsible for leaking documents that painted a bleak picture of the potential impact of a no-deal Brexit. Hammond has fallen under suspicion for the leak, something his team has denied.

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TLDR News: What Johnson's Cabinet Reshuffle Mean For Brexit

On Thursday night, Boris Johnson selected his new cabinet in the biggest reshuffle in recent memory. Cabinet selections really indicate what kind of people the Prime Minister wants to surround themselves with, what kind of strategies they will be using. So in this video, we will be discussing who Johnson chose, and what this might indicate about his Brexit plans.

The Guardian: It is absurd to question whether we can afford to keep our planet liveable

If the question sounds absurd, that’s because it is. If we fail to move to a low-carbon economy, the consequences will be dire. According to the Intergovernmental Panel on Climate Change, the body of the world’s leading climate scientists convened by the UN, we must drastically reduce our emissions in the next decade to avoid a catastrophic situation in which droughts, floods, heatwaves and extreme weather across the globe devastate lives, destroy agriculture, lay waste to wildlife and force millions to flee.

Set against that, the costs – of £50bn a year in investment, according to the Committee on Climate Change (CCC), which set out the case last month for a target of net-zero emissions by 2050, or £70bn a year, according to the Department for Business, Energy and Industrial Strategy – of maintaining our current lifestyles and orderly existences are trivial. The UK’s economy is worth roughly £2tn a year at present, so Hammond’s estimate of a £1tn cumulative cost by 2050 amounts to less than half of one year’s GDP in three decades. [...]

He added: “If reports of the letter are correct, Hammond has not understood the urgency of the challenge and the immense costs of climate change, and has failed to understand the capabilities of the UK. The UK is in an enormously powerful position to take leadership, with its strengths in research and development, in innovation, in finance in the City, with our skills in city planning – there is enormous potential here.”

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Politico: UK worse off under all Brexit scenarios

The government analysis was echoed later in the day by a separate report from the Bank of England, which warned economic output in the U.K. could drop by as much as 8 percent if Britain drops out of the EU without a deal in place, compared to expectations had the U.K. stayed in. That compares to a 6.25 drop during the 2008 financial crisis. [...]

Brexit-supporting MPs were also quick to dismiss the Bank’s analysis, recalling its (so far incorrect) pre-referendum warning that a Leave vote could result in a recession — a prediction that was linked by Brexiteers to an anti-Brexit campaign by the David Cameron government that they branded “Project Fear.” [...]

Likewise, the opposition Labour Party was quick to attack the government. John McDonnell, the Labour party’s shadow chancellor, said: “The Bank has confirmed what other independent reports this week have been telling us: a no-deal Brexit could be even worse than the financial crisis of 10 years ago, and the country would be much worse under Theresa May’s deal. Instead of plowing on with this discredited deal the government should set new priorities that would protect jobs and the economy.”[...]

Regionally, the northeast of England would be the hardest hit economically in a no-deal or Canada-style free-trade agreement scenario, according to the document. Under no deal, the region’s growth would be more than 10 points lower than it would have been inside the EU.

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Politico: Berlin’s Brexit déjà vu

This week the Spectator’s James Kirkup documented how David Cameron misread Merkel from the beginning. “Cake was never on her menu, either before or after the referendum,” he wrote.

It seems the more Merkel resisted Downing Street’s overtures, the more convinced the Conservative Party became it was all just part of an elaborate negotiating ritual, as if Germans had suddenly become masters of subtlety.

Instead of acknowledging that Germany’s commitment to the EU’s four freedoms is its raison d’état, Tory expectations that “Mutti” Merkel would come to the rescue with a workaround, Mary Poppins-like, only intensified.[...]

To complete that déjà vu feeling, look for breathless predictions that Friedrich Merz, a leading candidate to replace Merkel with a long history of mandates for investment firms, gets why Europe needs to cut the U.K. some slack.

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The Spectator: All by herself: Theresa May and the politics of isolation Inbox x

Her current policy — to threaten to walk away from talks if the EU doesn’t accept her Chequers plan — is not taken seriously in Brussels. EU leaders can see that the UK is hopelessly unprepared for no deal, and reason that she’d be stopped by her cabinet, parliament or both if she tried it. May’s colleagues worry that she is in denial, and so they are making their own plans. One of those intimately involved in the government’s contingency planning tells me, ‘No deal cannot be our only Plan B.’ [...]

Even the handful who still defend Chequers in private, as well as in public, admit that things are now more difficult. One cabinet minister concedes that the EU’s approach at Salzburg was a ‘very successful negotiating tactic’. Another cabinet member says the Chequers plan has done its job: to show the government had made an effort, in good faith, to negotiate as close an economic relationship with the EU as possible. ‘You’ve got to be able to say to the Remainers that we tried.’

There are some in the cabinet who still loathe Brexit and regard Chequers as the UK’s opening offer. Philip Hammond, the Chancellor, is expected to push to stay in the customs union and makes no attempt to disguise his concerns about Brexit. In cabinet meetings this week, he complained that a restaurant in his Surrey constituency can’t hire enough staff to wait all the tables — proof, he said, that the UK needed low-skilled immigration. But as one exasperated cabinet minister put it to me afterwards, it didn’t seem to have occurred to the Chancellor that maybe the restaurant should just pay its staff more. And that the balance of power between workers and low-wage businesses might be precisely why so many voted for Brexit in the first place.

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openDemocracy: When is the UK at war?

However, a long-awaited response to a Freedom of Information request that the Remote Warfare Programme submitted to the Ministry of Defence earlier this year has revealed that the government does not actually have working definitions of combat or non-combat. This suggests that the decision on whether a mission is combat or non-combat is left in the hands of political decision-makers who may have an incentive to avoid the enhanced scrutiny and approval that a combat designation would bring, even if it means wrongly defining the mission at hand.

In the UK, Parliament has increasingly secured the right to a vote on the deployment of British troops on combat missions through the War Powers Convention (WPC). This was established when Tony Blair invited the House of Commons to vote on British military intervention in Iraq, and it was strengthened in 2013, when David Cameron respected parliaments’ rejection of a deployment to Syria. [...]

While the UK is not unique in its lack of a definition – NATO, the EU, and allies such as Denmark all fail to define the term – the political repercussions of designating missions as combat or non-combat are hugely significant in the British system as described above, and make the designation particularly relevant for the UK.

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The New Yorker: Theresa May’s Impossible Choice

As a result, it is hard to sense what May is thinking or to predict what she will do next. “No one knows where they are at any point in time when they are working for Theresa May,” one of her former staffers said. May rejects the inevitable comparisons to Margaret Thatcher, Britain’s first female Prime Minister, because Thatcher had an agenda that was overtly ideological. May, unlike Thatcher, would not enjoy being photographed driving a tank. Her definition of politics is “doing something, not being someone.” People say that she would have made a fine lawyer or judge. But she happens to be the leader of the United Kingdom—a divided nation of sixty-five million people, Europe’s second-largest economy, and America’s closest ally—as it chooses how it wants to proceed in the world. This summer, that choice, which is frankly overwhelming, came to rest with May. Britain waited and watched. May made her call, and then her government more or less exploded. And that was before Donald Trump showed up. [...]

Since the referendum, the central task in British politics has been to try to square two conflicting demands: to respect the democratic impulse of Brexit while limiting the economic consequences. It is a version of the challenge posed by populist anger everywhere. How far should governments go in tearing up systems that people say they dislike—the alienating structures of global capitalism and multilateral government—when the alternatives risk making populations poorer, and therefore presumably more furious than before? [...]

And that’s Brexit, in a way. “Every single element in this is connected,” the senior official told me. The mightiest riddles, such as the customs union, have dominated the political conversation, but the truth is that it’s nitty-gritty all the way down. During its forty-five years in the E.U., Britain has imported around nineteen thousand European laws and regulations. The fabric of the acquis, as the legal framework is known, is the fabric of political life. E.U. articles and directives govern everything from equal pay for men and women to the international trade of the hairy-vetch seed. Two days before I went to Dover, a fourteen-page update from the Brexit negotiations included progress on the status of staff employed on British military bases in Cyprus, the ownership of fissile nuclear materials, and the future administration of sales taxes. One of the reasons that people voted to leave the E.U. is its totalizing nature, and the sense that it had penetrated too far into British life. But the years of membership, the weaving of the acquis, have constructed a reality that is hard to change—and even harder to imagine a life outside.  [...]

One of the central difficulties of coming to an agreement is the different way that the two sides imagine politics. The Lisbon Treaty, which serves as the E.U.’s constitution, is two hundred and seventy-one pages long; the U.K. has no such thing. In Westminster, no situation is completely unfixable; the rules can be made to bend. For this reason, Brexiteers have always believed that Britain’s economic and military importance to the E.U. would prompt it—or, rather, its German car manufacturers, or its Dutch oil refiners—to offer the nation a singularly advantageous deal. (May often talks about a “bespoke” Brexit.) But, since the vote in 2016, the E.U. has maintained that Britain can choose only from a menu of trading relationships that already exist. “I explained that to May,” Verhofstadt said. “I said, You have a problem, you try to solve it. We on the Continent are different. We need first a concept. If we have a concept, then we are going to try and put every problem that we have inside that concept.”

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Jacobin Magazine: Divided They Fall

Steve Baker, the junior of resigned Brexit Secretary David Davis, interprets the White Paper as a stitch-up from the top. He argues that the Brexit office was a Potemkin village designed to distract people while the Cabinet Office’s Europe Unit got on with developing a soft Brexit plan. This is congruent with long-standing Brexit complaints that the higher civil service is an anti-Brexit fifth column. Indeed, they have long complained that effective control of the process of withdrawal has been ceded to this treacherous group. [...]

Most businesses want to be tied down by EU rules, and Brexiteers just don’t see why. If middle-class “free market” ideology had minimal descriptive accuracy, that shouldn’t happen. Businesses should be queueing up for tax cuts and deregulation.

And if British capitalism is as globally important as the Brexit Right think, then China and India ought to have been eager to offer British businesses access to expanding export markets — as was necessary to support domestic austerity and wage cuts. In fact, India seemed mildly embarrassed by the approach, while China was politely indifferent.

Part of the problem is that British capitalism no longer exists in the way it once did. Earlier this year, businesses in the European Round Table of Industry threatened Theresa May with what amounts to an investment strike if she failed to secure a frictionless customs union. The fact that they could make such a threat demonstrates just how much the British economy is imbricated with the rest of Europe. [...]

The EU seems to have understood this. For all that it has worried about “unfair competition” from UK tax cuts, it is also concerned about the “distortive effects of subsidies on investment, trade and competition.” Thus, the steel cage of special sanctions being devised for the United Kingdom in any future trade deal is intended to uphold “state aid” rules as much as anything else. One of the reasons why pro-EU Tories are so incandescently angry with Brexiteers is that they risk unintentionally creating opportunities for a future Corbyn government.

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Bloomberg: Theresa the Delayer: May's Secret to Surviving in Brexit Britain

The minister’s colleague was more sanguine. May has survived so long by avoiding confrontation and would continue by finding a compromise that enables both sides to declare victory.

At least part of May’s strategy appears to be more procrastination: An inner cabinet meeting was canceled Thursday, and another scheduled on Tuesday is now uncertain. Meanwhile, lawmakers wonder when they’ll get the chance to vote on key pieces of Brexit legislation. Two have been on pause since February, and May has now put her flagship EU withdrawal bill on ice. [...]

Debates in the House of Commons on May’s Brexit laws, when they come, are likely to expose her predicament even further -- she’s stuck between a likely majority for a customs union, and the more than 60 lawmakers in her Conservative Party threatening to derail her government if she goes for one. [...]

Delaying to apply pressure would anger her lawmakers, but this is where May’s capacity for long-suffering helps. With the Conservatives divided on Brexit, neither wing of the party is keen to remove her in case they like her replacement even less. Surrounded by critics and undermined by her Cabinet, May stays for as long as she can stand it.

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Independent: The EU is ready to reap the profits from our financial services and there's nothing we can do

Phillip Hammond reckons it is in everyone’s “mutual interests” to include financial services in the deal but it most certainly is not. Now the UK is leaving, the EU has no incentive to ensure London’s financial district continues to thrive, which is why Europe has repeatedly rejected any suggestions of London having access to the single market. [...]

The City of London is an integral part of the UK economy. More than one million people work in finance-related jobs and estimates put the sector’s contribution to the UK economy at £124.2bn in gross value. These jobs and this contribution are now in serious jeopardy and a number of major banks are quite openly making plans to move to the continent. JP Morgan has warned of 4,000 UK job cuts, Goldman Sachs has started to move people abroad, taking up space in Paris and Frankfurt, and Swiss investment bank UBS said the bank “will definitely” be moving people out of London. [...]

During the eurozone crisis, having euro clearing taking place in London proved to be a major difficulty for the ECB as it tried to mitigate and control the crisis. There will soon be nothing stopping Europe from enforcing a policy like this and it works massively in their interests to pursue it. Manfred Weber, the head of the European People’s Party, the largest group in the European Parliament and a political ally of German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker, has openly said that it was not conceivable that euro-denominated business could remain in London.

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The New York Review of Books: Brexit: ‘Take Back Control’?

But right after announcing these two departures, and in the very same speech, May turned on a dime. She told the assembled EU ambassadors that, following Brexit, she wanted to propel strategic sectors of the UK economy right back into the single market and the customs union, but with one big difference she called her “bespoke” deal. While Britain would still enjoy most of the benefits of membership—“frictionless trade,” in her words—the UK would be largely free of its obligations. So, no free movement of labor between the UK and the EU, no British jurisdiction for the Europe Court of Justice, and no multibillion-pound annual payments by the UK into the EU budget.  [...]

May put together her approach with only a couple of advisers in Downing Street, and without significant consultation with either her cabinet or British business leaders. But May’s fall has blown open the politics of Brexit within her cabinet. In her year of power, the contradictions of her Brexit diplomacy could be taken as evidence that she needed to make a choice between them, a choice that was hers to make. The weakness of her position now means that these contradictions have been exposed and are harnessed to rival cabinet factions fighting for supremacy, with May caught in the crossfire and powerless to control them. The most significant development in this opening-up of the politics of Brexit has been the emergence of a cabinet faction led by the Chancellor of the Exchequer, Philip Hammond. [...]

But May did not fire Johnson because he has maneuvered himself into becoming the champion of the nationalist insurgency in the Conservative Party and of those voters who see Brexit as a moment of liberation. Johnson enjoys support not only among grassroots party members but also in May’s cabinet, from ministers like Davis, Fox, and the Environment Secretary Michael Gove, along with the militant core of Conservative members of parliament for whom Brexit has been a lifelong cause. Their cause is also cheered by the pro-Brexit national press led by The Daily Telegraph and The Daily Mail. With a gravely weakened prime minister caught between these warring cabinet factions, it is hard to see how their conflicts will be resolved.

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Politico: UK’s empty Brexit threats

In the heady days of a comfortable (if not generous) House of Commons Tory majority and an opposition in disarray, Hammond said that if the EU gave the U.K. a bad Brexit deal, “we could be forced to change our economic model and we will have to change our model to regain competitiveness.” It evoked images of a Singapore-style low regulation, low-tax economy on Europe’s doorstep. [...]

The tough talking has been replaced with a far more emollient tone. “I often hear it said that the U.K. is considering participating in unfair competition in regulation and tax,” he told Le Monde, innocently. “That is neither our plan nor our vision for the future.” [...]

And the Grenfell Tower disaster, in which more than 80 people died in a social housing tower block fire (the final death toll may not be known for months), has changed the political mood further. Any appetite for the tearing up of red tape dissipated in the wake of the disaster, which appears to have been caused by a catastrophic regulatory failure.

The opposition has also landed some punches on Hammond’s Singapore vision. Labour’s position on the EU single market and customs union may be even more confused than that of the government, but Corbyn’s oft repeated claim that the Tory Brexit deal threatens to create a “bargain basement economy” gained traction in the election campaign and spooked his opponents.

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The Guardian: One by one, Brexit’s ‘salvations’ are seen to be illusory

From Boris Johnson and Michael Gove in the Leave campaign, through to Iain Duncan Smith and David Davis today, they convinced 17 million or so voters that BMW would ensure we could have our cake and eat it too. “The first calling point of the UK’s negotiator immediately after #Brexit will not be Brussels, it will be Berlin, to strike a deal,” announced Davis in May 2016. German car manufacturers would want access to the British market. The German government would listen and grant us privileged access to the single market in return.

As it has turned out, economics has not trumped politics. And although I am instinctively a materialist, I have to admit it rarely does. Try to find an economic explanation for nationalism or religious fanaticism, or for middle-class professionals supporting left-wing parties or working-class voters support for rightwing parties, and your arguments rapidly lose conviction. Economics did not trump politics when Britain voted to leave the EU. It does not trump politics now that 27 countries are determined to preserve the union. And not only as a defence against a return of fascism and communism.

Other countries have their national interests too. The supposedly omnipotent German car manufacturers did not stop Angela Merkel imposing sanctions on Russia after the invasion of Ukraine, even though sanctions hurt sales. Germany, like the rest of Europe, like Britain itself, had an interest in stopping the rebirth of Russian imperialism and that came first. In any case, defending the single market will have long-term economic benefits for every large company in Europe, their workers and the old, the sick and the young who rely on their tax revenues. As German industrialists make clear, they would rather lose British sales than see the world’s richest market undermined.

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Financial Times: Why Theresa May is here to stay