Brexiteer Tory MPs back European Research Group demands in letter to Theresa May
Comment of the Day

February 21 2018

Commentary by Eoin Treacy

Brexiteer Tory MPs back European Research Group demands in letter to Theresa May

This article by Aubrey Allegretti for may be of interest to subscribers. Here is a section: 

In it, the MPs say Mrs May "must" ensure Britain can change its laws without authorisation from Brussels from the moment it leaves the bloc in March 2019.

And they demand the UK be "free to start its own trade negotiations" from day one of the transition period.

Ministers have also been urged to fight back harder against the EU setting a timetable for negotiations and to "take control" of tariff schedules - in other words the customs union.

The letter was signed off by MP John Penrose "on behalf of ERG officers" and sent to Mrs May on Friday, with a copy leaked to Sky News on Tuesday.

The requests do not necessarily defy Government policy on Brexit but come at a crucial time in negotiations within the Conservative Party about what type of divorce to pursue.

Eoin Treacy's view

Here is a link to the full letter which is now on Twitter.

Theresa May is sandwiched between those who are willing to renounce negotiations and revert to WTO rules of trade with the EU, and the rest of the party who want to see as little disruption to the economy as possible. However, as she attempts to tread a path between these opposing groups, she also has to keep Northern Ireland’s Democratic Unionist Party on side.  

As if negotiating trade was not difficult enough, the question of the border between the UK and the EU remains a sticking point. The handy solution would be to make a case for Northern Ireland to stay within the customs union. That would place the border in the Irish Sea. Policing it would then become a moot point but border controls between the rest of the UK and Northern Ireland would be a real possibility. That is a red line for the DUP since their raison d’etre is to ensure union with the UK. Any whiff of a move towards a united Ireland is going to be opposed. Since May’s government relies on them for support, following her disastrous play for more power last year, she has little choice but to listen to their point of view. On the other hand, Dublin is going to do everything it can to avoid a border.
This issue has the potential to collapse Theresa’s May’s government so the question is really only whether the Brexit camp is willing to risk a potentially divisive leadership battle and/or general election if the DUP cannot be kept onside. Against that background Jeremy Corbyn obviously smells blood in the water with his angling toward the middle ground on Brexit over the last couple days. Could this be an attempt to look more electable? 

Meanwhile the Pound continues to be the primary arbiter of the market’s perspective on the likelihood of a favourable outcome to negotiations with the EU. The fact it has been so inert against the Euro for the last five months is a testament to how finely balanced the arguments are. A sustained move above €1.14 will be required to confirm a return to Pound demand dominance. 

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