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Theresa May's Brexit plan criticised as a 'real blow' for London's finance sector

The controversial plan prompted the resignation of chief negotiator David Davis and Foreign Secretary Boris Johnson.

CORRECTION Belgium NATO Summit Source: Markus Schreiber

BRITISH PRIME MINISTER Theresa May has published the UK’s plan for future ties with the European Union after Brexit just days after it prompted high-profile resignations from her cabinet.

May wrote in a foreword to the controversial policy paper, which calls for a free trade area and common rules with the EU for goods, that reaching a Brexit agreement with Brussels “requires pragmatism and compromise from both sides”.

Although the paper was initially described as a ‘soft Brexit’, the paper does propose taking the UK out of the single market, ending free movement of people, and ending the oversight of the European Court of Justice in the UK.

It also proposes a common regulations agreement on goods, agri-food and fisheries in order to avoid a hard border on the island of Ireland.

The new Brexit secretary Dominic Raab announced the White Paper’s publication in the House of Commons just before 1pm, causing uproar among MPs who were “furious” that they hadn’t been given copies of it beforehand.

The speaker said that there was “considerable unhappiness” on both sides of the House that Raab was giving a statement on a Brexit paper that they hadn’t been given an opportunity to read yet.

He added that he won’t take points of order during the statement, but he waived a rule that would have prevented MPs who leave during the statement of asking a question.

So what does it say about Ireland?

A lot of the rhetoric used by Theresa May and most of her government in relation to Ireland and a possible border are repeated in the White Paper:

Taken together, such a partnership would see the UK and the EU meet their commitments to Northern Ireland and Ireland through the overall future relationship: preserving the constitutional and economic integrity of the UK; honouring the letter and the spirit of the Belfast (‘Good Friday’) Agreement; and ensuring that the operational legal text the UK will agree with the EU on the ‘backstop’ solution as part of the Withdrawal Agreement will not have to be used.

Brexit Former Foreign Secretary Boris Johnson previously said that the Irish border problem was a millenium bug issue. Source: Leon Neal

The paper speaks of establishing a free trade area for goods between the EU and the UK, which in theory would avoid a hard border.

It would avoid the need for a hard border between Northern Ireland and Ireland, without harming the internal market of the UK – doing so in a way that fully respects the integrity of the EU’s Single Market, Customs Union, and its rules-based framework.

This includes an agreement on agri-food and fisheries regulations, which would “remove the need to undertake additional regulatory checks at the border – avoiding the need for any physical infrastructure”.

This would, however, mean that the UK would have to adopt the EU’s rules on all goods, a proposal that most Brexiteers turn their nose up at.

The White Paper claims that the arrangement “would protect the uniquely integrated supply chains and ‘just-in-time’ processes that have developed across the UK and the EU over the last 40 years, and will remain important given our geographical proximity, and the jobs and livelihoods dependent on them”.

Although the “country of origin” principle – where a company based in one EU country can broadcast into any other member state – will no longer apply, the UK’s commitments to the provision of Irish language broadcasting in Northern Ireland by RTE and TG4, as set out in the Belfast (“Good Friday”) Agreement will be guaranteed, the White Paper said.

Broadcasting Source: The future relationship between the United Kingdom and the European Union

But the White Paper doesn’t include a shared agreement on services and investment – as London is eager to protect its valuable services industry and doesn’t want to see the EU overseeing it through an authority in which it has no input (the European Courts of Justice).

It says that a new services arrangement will provide “regulatory flexibility, recognising that the UK and the EU will not have current levels of access to each other’s markets”.

Catherine McGuinness, head of policy for the City of London Corporation, said the proposals represented a “real blow” for finance firms.

With looser trade ties to Europe, the financial and related professional services sector will be less able to create jobs, generate tax and support growth across the wider economy. It’s that simple.

Irish government’s response

Royal visit to Dublin - Day One Prince Harry and Meghan Markle visited Dublin yesterday in what was dubbed a day of 'soft-diplomacy'. Source: Joe Giddens via PA Images

The publication of the White Paper, eagerly awaited by the European Union and the Irish government, was thrown into doubt earlier this week after the UK’s chief negotiator David Davis resigned, followed shortly by Foreign Secretary and prominent Brexiteer Boris Johnson.

Reacting to the news of its publication this afternoon, a government spokesperson said:

“The government welcomes the publication of the detailed White Paper on the future EU-UK relationship. We will consult with our EU lead negotiator Michel Barnier and his team and our other EU partners.

We hope the publication of the White Paper can inject momentum into negotiations and want to see the closest possible relationship between the EU and the UK. However, time is running out.
In terms of the Withdrawal Agreement, nothing is agreed until everything is agreed, and it must contain a legally operable backstop.

“We look forward to negotiations intensifying over coming weeks. But equally, contingency preparations for all possible outcomes will intensify further.”

The British Irish Chamber of Commerce welcomed the document’s publication, adding that “there are many elements which will need refinement but the basis for a workable outcome are now on the table”.

John McGrane, its director general said:

The proposed free trade in goods is vital for all, especially our shared agri-food sector. But we cannot afford to end free trade in all services simply because some sectors might reject the EU’s rules. Services account for more jobs and are vital to enabling all trade.

Theresa May is due to meet US President Donald Trump today as he visits the UK.

Earlier, Trump seemed to criticise May’s White Paper at a press conference following a heated Nato summit:

“The people voted to break it up (Britain’s ties with the EU).

So I would imagine that’s what they will do, but maybe they will take a little bit of a different route. I don’t know (if) that is what they voted for.

- with reporting from AFP

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