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UK parliament very likely to consider new #Brexit referendum - Hammond

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The idea of a second Brexit referendum is very likely to be put before Britain’s parliament again although the government remains opposed to any new plebiscite, the British finance minister said on Friday (12 April), writes David Milliken.

Philip Hammond (pictured) said he hoped parliament would break the Brexit impasse by passing a deal by the end of June, potentially ending the calls for a new referendum, and there was a “good chance” of a breakthrough in talks with the opposition Labour Party.

“I remain optimistic that over the next couple of months we will get a deal done,” he told reporters in Washington where he is attending meetings at the International Monetary Fund.

But a second referendum could not be ruled out.

“It’s a proposition that could and, on all the evidence, is very likely to be put to parliament at some stage,” Hammond said.

Prime Minister Theresa May has so far failed to get her own Conservative Party behind the Brexit divorce deal she agreed with other European Union leaders last year, forcing her to ask the bloc for a delay and to start talks with Labour about how to break the impasse in parliament.

Many Labour lawmakers are pressing their leader Jeremy Corbyn to demand a new referendum in talks with the government.

Hammond said that while the government was opposed to a new public vote, other Labour demands - such as a customs union with the EU - were up for debate.

Hammond said about six months would be needed to hold a referendum, so if parliament voted in a couple of months’ time to make one a condition of approving a Brexit deal, there would be no time before Britain is due to leave the EU on Oct. 31.

One of May’s most pro-EU ministers, Hammond has faced criticism from Brexit supporters for saying Britain should stay close to the bloc. He angered them again recently by describing another Brexit referendum as a “perfectly credible proposition”.

“(A second referendum) in the end is an issue about parliament and parliamentary numbers, and where the Labour Party ends up on this, as the Labour Party itself is deeply divided on this issue and at some point will have to decide on where it stands,” Hammond said.

Parliament has previously rejected the idea of a new referendum and other possible solutions the Brexit impasse.

 

Hammond said the risk of a no-deal Brexit had been reduced but not averted by this week’s delay of Britain’s exit and such an outcome would be felt in the global economy.

Ending the uncertainty would “unleash the very large stock of potential investment that is hanging over the UK economy in suspended animation,” he said.

Bank of England Governor Mark Carney said on Thursday (11 Aptil) that Brexit had pushed business uncertainty “through the roof”.

Carney is due to step down at the end of January, having delayed his departure twice to help Brexit preparations.

Hammond said Brexit could put off some qualified candidates in the search for the next BoE governor which was now underway.

“There may be some candidates who might be deterred from an application because of the political debate around Brexit, which inevitably the governor of the Bank of England can’t avoid being part of,” he said.

 

Supporters of Brexit have often accused Carney of giving over-gloomy assessments of the costs of leaving the EU.

Hammond also said the Brexit delay was hampering government efforts to improve economic productivity and could throw off course a planned multi-year budget for government departments due late this year.

Brexit

EU tells UK to say how long it will align with EU financial rules

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Britain must spell out how far it wants to diverge from European Union rules if it wants access to the bloc’s financial market from January, a top European Commission official said on Tuesday (27 October), writes

Britain has left the EU and access under transition arrangements ends on 31 December. Future access for the City of London hinges on UK financial rules staying aligned or “equivalent” to regulation in the bloc.

John Berrigan, head of the European Commission’s financial services unit, said Brussels has asked London for more clarification on Britain’s intentions to work out what is an “acceptable level” of divergence.

“We are almost ready,” Berrigan told the European Parliament.

“There will be divergence... but we have to get some mutual understanding of how much divergence is likely to happen, and is that going to be sufficient to allow us to maintain an equivalence arrangement.”

Brussels has granted temporary access for UK clearing houses, but chunks of stock and derivatives trading would move from London to the bloc without equivalence.

Separately, Britain and the EU are discussing a trade deal which would contain only limited references to financial services to avoid tying the bloc’s hands, Berrigan said.

“We see our regulatory co-operation in the financial services field outside the agreement,” he said.

It would consist of a “forum” similar to what the bloc has with the United States to assess potential divergence in rules ahead of time, he said.

“What we don’t want is an equivalence regime that is constantly under threat,” he said.

“We will need at the outset the direction of travel the UK want to go... so we don’t have to keep talking in emergencies about whether equivalence can be maintained or not.”

Britain has said that while it won’t weaken its high regulatory standards, it won’t be a “rule taker” or copy every EU regulation word-for-word to obtain market access.

Berrigan said market participants are generally ready for the “unavoidably fragmenting event” that full Brexit will be in January.

No trade deal would make future cooperation in financial services far more challenging, he added.

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UK will not back down on fisheries policy in EU talks: Gove

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Britain will not back down on its demands to the European Union over fisheries, minister Michael Gove said in a 26 October letter sent to a minister in the devolved Welsh government, writes William James.

Responding to concerns set out by Jeremy Miles, Wales’s Minister for European Transition, Gove wrote: “I am afraid we strongly disagree with your premise that we should ‘back down’ on fisheries.

“The UK government’s view is that in all circumstances, the UK must be an independent coastal state, no longer be bound by the Common Fisheries Policy.”

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Brexit decision entirely separate from US election outcome says PM Johnson

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Britain’s decision on whether to agree a Brexit deal with the European Union is entirely separate to the outcome of the US election next month, Prime Minister Boris Johnson said on Monday (26 October), writes William James.

“The two things are entirely separate,” Johnson said, when asked about an Observer newspaper report that he was waiting to see the US result before making a Brexit decision, and whether he was concerned about the prospect of a Joe Biden presidency.

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