Divorce bill warning as EU27 give go-ahead for Brexit trade talks
THERESA May’s goal of securing a Brexit deal edged forward yesterday when it was announced that the 27 other member states will start internal discussions about future trading arrangements with the UK.
Full-on trade negotiations with the UK will not begin until more progress is made on a series of thorny issues, such as the divorce bill, ahead of a crunch summit in December but the move is a boost for the PM, who says she is “optimistic”.
However, our exclusive poll reveals that a mere 13% of people in Wales believe they will be better off financially after Brexit. A third of people expect to be worse off as a result of the UK leaving the EU.
EU leaders have made it clear they want more concessions on Britain’s exit payment, with French President Emmanuel Macron suggesting that the bill could top €40bn.
Warning that more progress must be made before trade talks can begin, he said: “We are not halfway there.”
ONLY 13% of people in Wales believe they will be better off financially after Brexit, an exclusive poll for the Western Mail has revealed.
A survey carried out by Beaufort Research showed that two and a half times as many – 33% – thought they would be worse off financially, while 45% thought Brexit would make little difference to their finances and 9% didn’t know.
There were variations in the survey results according to gender, age, geography and social class but no group had more than 18% thinking they would be better off after the UK leaves the EU.
The 18% figure represented people living in the west south Wales region of the country, covering Swansea, Neath Port Talbot and Bridgend, as well as those belonging to the C2 skilled manual social category.
Only 7% of those working in AB professional and senior management occupations believe they will be better of financially after Brexit, with six times as many (42%) thinking they will be financially worse off.
Meanwhile, 12% in the DE social category of semi-skilled and unskilled manual occupations, plus the unemployed and those in the lowest grade occupations think they will be better off, with more than double in the category (27%) believing they will be worse off.
Men (16%) were marginally more likely to think they will be better off (16%) than women (10%).
In regional terms people living in north Wales (9%) were the least likely to believe they would be better off financially after Brexit, while in terms of age, only 7% of 16 to 24-year-olds believe they will be better off against 17% of those aged over 65.
The highest proportion of those thinking they will be worse off (42%) are in the AB social class, while the lowest proportion taking that view (27%) are DEs or living in west south Wales.
Responding to the poll results, a Welsh Labour spokeswoman said: “This is not at all surprising and exactly why Welsh Labour have consistently said a ‘no deal’ Brexit scenario is not an option and would be a disaster for Wales. Since the UK voted to leave the EU we have consistently sought to secure the best possible Brexit for Wales. That includes a detailed position paper in January as well as securing substantive changes to the UK Government’s approach to issues like the need for the fullest access to the Single Market and a transition deal.”
A Conservative spokeswoman said: “We are building a country that works for everyone and that means getting the best Brexit deal for our country. That’s why our Prime Minister has been in Brussels meeting the European Council to negotiate our exit from the European Union – one that benefits families across the UK by delivering control over our borders, laws and money with the greatest possible access to European markets.
“We want to be leading on the world stage with trade deals and tackling injustices and problems like climate change and global poverty. We know that road will not always be easy but together we can deliver a better future and a country that truly works for everyone.”
A spokesman for Ukip Wales said: “The real headline should be that 68% of Welsh people believe that their finances will remain roughly the same, or that they will be better off. The 33% who believe they will be worse off is significantly lower than the percentage who voted remain in Wales (47.5%). Clearly, Project Fear 2.0 isn’t working; even on those who voted to remain in the European Union.”
William Powell, president of the Welsh Liberal Democrats and a member of the Welsh Government’s EU Advisory Group, said: “In the year or so following the referendum, public opinion and optimism levels remained remarkably constant, sometimes in defiance of the facts.
“I have, however, detected a marked shift in recent months. I believe this poll reflects this. In sectors as diverse as farming and automotive, from commuters to hardpressed weekly shoppers and in both urban and rural Wales, the unadvertised consequences of Brexit are beginning to bite. Just last week, the issue of Brexit was raised in terms of its capacity to blow out of the water the financial assumptions around which the Swansea Bay City Deal is predicated.
“A London School of Economics (LSE) report on Brexit predicts a serious fall off in GVA for the region as a result of the UK leaving the EU. In the case of ‘soft Brexit,’ the LSE foresees a shortfall of more than £134m in the economies of the City Deal local authorities and Ceredigion.
“In the increasingly likely scenario of a ‘hard Brexit’ the immediate downward effect on GVA is estimated to be nearly £240m.
“These figures are well researched and, if they are borne out as a result of UK Government policy, potentially cataclysmic.
“No-one is questioning the outcome of the referendum, as a statement of opinion and maybe an outbreak of despair, when both Leave and Remain campaigns failed comprehensively to engage with the facts. “The Welsh Liberal Democrats have long called for there to be an opportunity to validate last year’s outcome, with a final ratification referendum on the facts.
“It would be outrageous for Wales and the rest of the UK to be ripped out of the Single Market and Customs Union without the people explicitly having the right to decide.”
Beaufort Research carried out most of the fieldwork between September 18 and October 1, with the remainder conducted the following week. A total of 1,008 interviews were completed and analysed.
EU leaders have made clear to Theresa May that she must make more concessions on Britain’s Brexit divorce payment in order to unlock talks on a future trading relationship.
And French President Emmanuel Macron suggested that the bill could top €40bn (£36bn), saying that earlier indications that the UK could offer around €20bn (£18bn) to ensure its EU partners were not left out of pocket due to Brexit did not go halfway to what was required.
The Prime Minister repeatedly dodged questions at the European Council summit in Brussels over how much the UK is ready to pay, insisting that the size of a “full and final settlement” will not emerge until agreement is reached on all aspects of Brexit.
But she did not deny suggestions that it could be “many more billions” than the €20bn indicated in her speech in Florence last month.
Mrs May said UK officials will spend the coming weeks going through Britain’s financial commitments to the EU “line by line”, ahead of a pre-Christmas summit when it is hoped leaders of the 27 remaining EU states will finally give the green light to the second phase of Brexit talks.
The EU27 took just 90 seconds to approve a programme of internal work on their position on trade in preparation for possible talks.
But they made clear that this step will depend on further progress being made on divorce issues including expats’ rights, the Irish border and, in particular, the financial settlement.
In their formal conclusions, the EU27 said they aimed to move to the second phase “as soon as possible” and would reassess the state of progress at the next summit on December 14-15. But they noted that Britain has so far made no “firm and concrete commitment” to settle all of its obligations.
Mr Macron said that “much work needs to be done”.
“I would say we are far from having reached the necessary financial commitments before we can open phase two,” he said. “We are not halfway there.”
German Chancellor Angela Merkel said that a breakthrough in December “depends to a large extent” on the UK, adding: “The topic of financial commitments is the dominating issue in that regard.”
Irish Taoiseach Leo Varadkar said detail on the UK bill had to be worked out.
“There wasn’t anything new on the financial solution. That’s still ongoing,” he said. “Prime Minister May has indicated that no European state should have to pay more or receive less than would have been the case had they not been leaving, that they would honour their existing commitments.”
Asked whether she would deliver further details on the divorce bill in time in order to secure progress in two months’ time, Mrs May said: “What we are doing as we look across the weeks coming up to the December Council is looking at a range of issues ... On the financial issue, we will be going line by line through those commitments.
“I’m positive and optimistic about where we can get to in relation to the future partnership that we want with the EU, because it is not only in the interests of the British people, it is in the interests of people across the remaining 27 members of the EU as well.”
She indicated that Britain will be ready to pay “relevant costs” of continued participation in EU projects in areas like science, research and criminal justice, but made clear that an overall figure cannot be expected before the shape of the final deal is known – something that is not expected before autumn 2018.
“The full and final settlement will come as part of the final agreement that we are getting in relation to the future partnership and I think that’s absolutely right, I think that can only be done in that particular context,” said Mrs May.
As expected, the EU27 backed chief Brexit negotiator Michel Barnier’s assessment that insufficient progress has been made in divorce talks for trade discussions to start now, as Britain had hoped.
But the agreement to begin scoping work on trade may reassure City firms which had suggested they might have to move functions and staff to the continent if no progress was made by Christmas. And it is likely to relieve pressure from Tory Eurosceptics on Mrs May to walk away from talks and opt for a no-deal Brexit under World Trade Organisation rules.
Mr Macron said the Prime Minister did not mention the possibility of a no-deal outcome when she addressed EU leaders over dinner on Thursday evening. He suggested the idea could be “bluffing” by “secondary players”.
“The problem for Mrs May is that those who pleaded in favour of Brexit never explained to the British people what the consequences would be,” said the French president.
Mrs May acknowledged there was still “some way to go” in divorce talks, but said the two sides were “within touching distance” of a deal over the rights of EU nationals in the UK and Britons living on the Continent.
In a possible sign that Britain is responding to EU concerns about the resettlement rights of expats’ family members, the PM said: “Whatever happens, we want them and their families to stay.”
European Council president Donald Tusk said “reports of the deadlock between the EU and the UK have been exaggerated” and that he wanted to be a “positive motivator” to clearing up remaining issues over the next five or six weeks.
“While progress has not been sufficient, it doesn’t mean there has been no progress at all,” he said. “The negotiations go on and we will continue to approach them positively and constructively. I hope that we will be able to move to the second phase of our talks in December.”
Senior Tory Brexiteer Bernard Jenkin warned the Prime Minister she should not sign up to a deal at any price.
“The cost of paying tariffs on our exports to the EU would be less than half our annual net contribution.
“It is cheaper to pay for access to the single market by paying the tariffs than for us to be continuing to pay our subscription as a member of the EU,” he told BBC News.
“We are pulling out halfway through a budget process.
“It is only reasonable that we should consider helping the EU out as we leave the EU and withdraw our contributions but if this becomes much more expensive than envisaged it is simply not worth it.”