Clearer Brexit path seen late 2016

Vote to leave EU must be binding: Conservative Party chairman

CHENGDU, China, July 24, (Agencies): Britain’s new finance minister Philip Hammond sought to address concerns among global finance chiefs about the uncertain path ahead for the country’s exit from the European Union, saying there could be more clarity later this year.

But Hammond also warned that volatility in financial markets was possible throughout the two-year period set out for the Brexit negotiations which Britain has yet to trigger.

“We have to be ready as government, the Bank of England has to be ready as monetary authority, throughout that period to respond to any instability created by that uncertainty and to ensure that the economy continues to operate smoothly,” he said.

Hammond, speaking after his first meeting with his fellow global finance chiefs from the Group of 20 economies, said concern about the shock result of Britain’s EU membership referendum had increased uncertainty about the global economy.

Officials from several G20 countries attending the meetings in the Chinese city of Chengdu on Saturday and Sunday said they wanted more clarity on how the Brexit process would unfold.

“What will start to reduce uncertainty is when we are able to set out more clearly the kind of arrangement we envisage going forward with the European Union,” Hammond said.

“If our European Union partners respond to such a vision positively - obviously it will be subject to negotiation - so that there is a sense perhaps later this year that we are all on the same page in terms of where we expect to be going. I think that will send a reassuring signal to the business community and to markets,” he said.

Hammond also said he did not think that a survey of British businesses published on Friday, which showed the sharpest fall on record in a purchasing managers index, was a sign that the country’s economy was in a recession after the referendum.

“What it does is underscore the hit to confidence that the uncertainty following the referendum decision has created,” he said.

Britain’s vote to leave the European Union must be binding, the chairman of Britain’s ruling Conservative Party said on Sunday, and the exit process will be started before the next general election.

Patrick McLoughlin, who was made party chairman by new Prime Minister Theresa May last week, told the BBC’s Marr Show that the vote for Brexit meant Britain must now get control of its own borders and that immigration must be reduced.

Emergency

Asked about a report in the Observer newspaper that an “emergency brake” on the free movement of people was being discussed, which would allow Britain to keep access to the European single market, McLoughlin said: “Let us see.”

“I’m quite clear that the referendum result is binding on parliament,” he said.

Although May has vowed to press ahead with Brexit, supporters of remaining in the EU contend the referendum result is only advisory.

At least seven lawsuits have been filed arguing that parliament must have the final decision on whether to invoke Article 50 of the Lisbon Treaty to start the twoyear countdown to leave the bloc. May has indicated negotiations on an exit could not start this year.

London’s High Court ruled last week that the case would be heard in midOctober and lawyers said it was highly likely it would then be heard by the Supreme Court in mid-December.

Appeal

The BBC reported on Saturday that days before the June 23 EU referendum, then-Prime Minister David Cameron telephoned German Chancellor Angela Merkel to appeal for concessions on the free movement of people, though the idea was eventually shelved.

Immigration was a core issue in the campaign to leave the bloc, with polls in the run-up to the referendum showing worries about the number of people arriving from the EU swaying the public towards supporting Brexit.

McLoughlin said Article 50 would definitely be triggered before the next national election and that it would be difficult for Britain to have an early election because of its fixed-term parliament system. The next parliamentary vote is due in 2020.

A government lawyer told Britain’s High Court earlier this week that Article 50 would not be invoked this year.

Meanwhile, British farming leaders warned Friday that post-Brexit curbs on EU immigration could be “devastating” for their sector and suggested a visa system to allow in seasonal workers to pick British crops.

“The loss of labour post-Brexit could have a devastating impact on the horticulture industry,” National Farmers Union (NFU) president Meurig Raymond said after talks with farming minister Andrea Leadsom.

Raymond said that a shortage of seasonal workers could damage the competitiveness of the sector compared to foreign imports “but could also, in the most severe cases, lead to a loss of crops”.

Ali Capper, the NFU’s horticulture board chairwoman, suggested the possibility of a visa system.

“We need to explore all the possible options in maintaining access to horticulture’s vital labour supply, which could involve some form of visa-restricted access to labour,” she said, calling for an urgent meeting with Brexit minister David Davis.

A shortage of labour in 2007-08 blamed on changes to a system in place at the time for bringing in seasonal workers -- mainly from Eastern Europe -- saw many crops unharvested and left to rot.

Farmers have warned that they will grow their crops elsewhere in the EU to avoid a similar situation.

“British farmers could decide to transfer some of their enterprises to other places in Europe where there is an ample supply and suitable land,” said Laurence Olins, the chairman of British Summer Fruits (BSF), an industry body.

Olins pointed out that the £1.2 billion (1.4 billion euros, $1.6 billion) industry relies completely on European workers because their British counterparts do not like working in the fields despite numerous government attempts to attract British workers.

Capper, an apple farmer, said she was worried the Brexit vote would impact the industry even before the formal withdrawal from the 28-nation bloc.

“It is not unusual for horticultural producers to be planning crops 10 years in advance, yet these crops cannot be produced without a good labour supply,” she said.