The House of Commons has voted overwhelmingly to pass the Brexit Bill without a single amendment. Opposition parties had tabled amendments including more parliamentary scrutiny of the Brexit process and securing the status of EU nationals living in the UK. PM Theresa May’s concessions on the bill number just two: the publishing of the Government’s White paper and confirmation that MP’s will have a vote on the final Brexit deal prior to the EU 27, although this will be late in the negotiating process. The bill will be debated by the peers when the House of Lords returns from recess on Monday.
The Conservative led government faced a lot less opposition in the Commons than predicted by some commentators, even from “Remain” Conservatives, and PM Theresa May continues steadfastly towards the UK exit from the European Union. Article 50 still has to be triggered and the PM no doubt will face numerous challenges when securing “a new strategic partnership with the EU”.
The City of London
The White paper suggests a new trade deal could "take in elements" of current single market arrangements and that the government will seek the "freest possible" trade in financial services between the UK and EU. It is possible the UK will leverage the City’s position as the world’s largest centre for Euro-denominated derivatives clearing (our analysis can be read here) in order to secure passporting rights for the City’s financial services firms. The EU have been dismissive of the issue, and it’s difficult to decipher whether the EU 27 gauge a hard Brexit as a real risk to the EU’s financial stability.
Article 50 of the Lisbon Treaty provides for a 2 year negotiating period beginning when a Member State provides formal notice to exit the EU. The UK’s narrative suggests the negotiation of its separation from the EU and the agreement of a new trade deal will be discussed simultaneously during the 2 year period. The EU Commission’s spokesman Margaritis Schinas however has said "First, one needs to agree on the terms for an orderly separation and then, on the basis of this, build a future new, good relationship", indicating that the EU interpret the negotiations on UK-EU separation and a new trade agreement as being mutually exclusive.
The €60bn question
The true monetary cost to the UK of leaving the EU is very difficult to forecast at this juncture but the EU are suggesting a direct “break-fee” payment of €60bn to compensate the EU for the UK’s departure. Sir Ivan Rogers, the UK’s former top diplomat to the EU, giving evidence to the Commons European Scrutiny Committee said of the EU 27 that “one thing they can all agree on is that we are the rogues who have ceased to pay our dues”. The EU’s current long term budget period is 2014-2020 and with formal negotiations due to finish up in 2019, EU officials believe the UK’s exit will leave the EU significantly out of pocket. The figure is made up of pension promises, legally binding budget commitments, structural funding and contingent liabilities. The €60bn number is clearly a high benchmark for the EU, and will, no doubt, be significantly reduced during negotiations. The PM however has the unenviable task of negotiating a monetary contribution to the EU, when parliament, particularly the “hard Brexiteers” in her own party, will staunchly oppose paying anything more into EU coffers.