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General election 2019: Brexit Party will not stand in Tory seats

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The Brexit Party has announced that it will not stand candidates in the 317 seats won by the Conservatives at the 2017 general election.

Party leader Nigel Farage said standing candidates across the country could increase the chances of another EU referendum taking place.

But he said the party would stand against all other parties – and focus on taking seats off Labour.

It had vowed to stand more than 600 candidates. The Commons has 650 seats.

Prime Minister Boris Johnson welcomed the move, calling it “a recognition that there’s only one way to get Brexit done, and that’s to vote for the Conservatives”.

But Tory chairman James Cleverly added there was still a “danger” the Brexit Party could split the vote in target seats, leading to the election of MPs who could “frustrate the Brexit process”.

Explaining his decision to supporters in Hartlepool, Mr Farage said Mr Johnson had recently signalled a “big shift of position” in his approach to Brexit.

He cited a pledge by the PM not to extend the transition period that would follow the UK’s departure from the EU. This would see Britain sticking to the European Union’s rules on issues such as freedom of movement until December 2020.

Mr Farage also said he was encouraged by recent commitments from Mr Johnson to seek further divergence from EU rules in a post-Brexit trade deal.

He added that this was a “huge change” from the kind of trade pact that had been planned under former PM Theresa May.

‘Unilateral Leave alliance’

Labour Party chairman Ian Lavery urged voters to “reject this Thatcherite 1980s tribute act, which would lead to more savage Tory attacks on working class communities”.

Liberal Democrat deputy leader Sir Ed Davey said Mr Farage’s decision “shows the Conservatives and the Brexit Party are now one and the same”.

Mr Farage had previously offered to not to stand candidates against the Tories in certain seats if the prime minister changed aspects of his Brexit deal.

But the proposal was rejected by Boris Johnson, who said deals with “any other party” would “risk putting Jeremy Corbyn into No 10”.

Mr Farage said he had “genuinely tried” to forge a so-called “Leave alliance” with the Tories, but his efforts had gone nowhere.

“In a sense we now have a Leave alliance, it’s just that we’ve done it unilaterally,” he added.

Mr Farage has already confirmed he will not be standing himself in the election, saying he wanted to concentrate on helping his party’s candidates.

Will Brexit Party move help the Conservatives?

The Brexit Party’s decision to stand aside in constituencies the Conservatives won in 2017 should make it easier for them to hold on to those seats.

In marginals like St Ives and Mansfield, it ought to help them keep a bigger share of the pro-Leave vote.

However, to win a majority in the House of Commons the Conservatives need to win more seats – not just hold on to what they have.

And in those places the presence of a Brexit Party candidate may get in the Conservatives’ way.

The best estimates suggest that 29 of the Conservatives top 50 targets, and 59 of the top 100, are in Labour-held seats that voted Leave in the referendum.

If the strategy is to target Leave voters in those places, it would probably be better to have a clear run – without the Brexit Party.

Brexit Party MEP Ann Widdecombe said Mr Farage had gone “a very, very long way” by ruling out standing in seats won by the Tories at the last election.

“That is an enormous concession, it is, as he put it himself, a sort of unilateral pact,” she told BBC Radio 4’s World at One programme.

She added: “You really can’t expect that we’re not going to take Labour on, and we are and any consequences that flow from that are down to Boris’s stubbornness.”

Scottish National Party leader Nicola Sturgeon said the Conservatives have “effectively become the Brexit Party”.

Pro-Remain election pact

She added that defeating the Tories in Scotland “will help deprive Boris Johnson’s increasingly extreme and right-wing party of the majority they crave”.

Anti-Brexit parties Plaid Cymru, the Green Party and the Liberal Democrats have agreed not to stand against each other in 60 seats across England and Wales.

Their pact means that, in Wales, two of the parties will agree not to field a candidate, boosting the third candidate’s chances of picking up the Remain vote.

In England, it will simply be a two-way agreement between the Lib Dems and the Greens.


Brexit: What are the backstop options?

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A key part of the Brexit negotiations has been the border that separates Northern Ireland and the Republic of Ireland.

The border is a matter of great political, security and diplomatic sensitivity in Ireland.

Therefore the UK and EU agreed that whatever happens as a result of Brexit there should be no new physical checks or infrastructure at the frontier.

This is where the controversial “backstop” comes in.

Why might the backstop be needed?

At present, goods and services are traded between the two jurisdictions with few restrictions.

That is because the UK and Ireland are part of the EU’s single market and customs union, so products do not need to be inspected for customs or standards.

But after Brexit, all that could change – the two parts of Ireland could be in different customs and regulatory regimes, which could mean products being checked at the border.

The preference of both sides is to prevent this happening through a deep and comprehensive trade deal.

However, the UK’s ambition to leave the customs union and the single market, could make that very difficult.

And if both sides couldn’t reach agreement on a deal keeping the border as open as it is now – that’s where the backstop would come in.

So how might it it work? There are several options:

A Northern Ireland only backstop?

This is what the EU originally proposed.

It would involve Northern Ireland alone remaining in the EU’s single market and customs union, leaving Great Britain (England, Scotland and Wales) free to strike trade deals.

But the DUP – a Northern Ireland unionist party that propped up Theresa May’s minority Conservative government – objected to this.

It said it would see Northern Ireland treated differently and could threaten the union.

Boris Johnson has also specifically ruled this out.

A UK-wide backstop?

After the DUP’s objections, Mrs May agreed a backstop involving the whole of the UK retaining a very close relationship with the EU – staying in the customs union – for an indefinite period.

It would also see Northern Ireland staying even more closely tied to some rules of the EU single market.

These arrangements would apply unless and until both the EU and UK agree they are no longer necessary.

he backstop would not apply if the UK left the EU without a deal but the potential problems with the border would remain.

Opposition to the backstop

The backstop plan was agreed by UK-EU negotiators and formed part of Theresa May’s withdrawal agreement in November 2018 (often referred to as the Brexit “divorce deal”).

It sparked a backlash from many Conservative MPs (and the DUP) at Westminster and several of her own ministers resigned in protest.


‘Special relationship’ won’t guarantee UK-US trade

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The UK should not expect that its “special relationship” with the US means it will get more favourable terms when it comes to trade.

That was the warning from former US trade chief, Michael Froman, talking exclusively to the BBC.

The US would not compromise its own economic interests, he said.

His comments came as new tariffs on UK exports, including Scottish single malt whisky and Scottish cashmere, are set to come into force on Friday.

Whisky and cashmere are amongst a range of products that will see a 25% tariff imposed when they are sold to US customers, as a result of a 15-year-long trade dispute between planemakers Airbus and Boeing.

The World Trade Organisation has given the US the green light to impose $7.5bn in tariffs (taxes) on EU products after a ruling that member states in the EU (UK, Germany, France, Spain) had provided illegal subsidies to Airbus.

Scottish businesses feel they have been unduly punished. But Mr Froman, who was the United States’ trade representative under President Obama, said the UK should not expect special treatment.

“Just because we have a special relationship, it doesn’t mean that we’re willing to sacrifice our economic interests in the context of a trade dispute or a trade negotiation,” Mr Froman said.

“That by the way applies to whatever future trade agreement is agreed between the US and the UK as well,” he added.

Dragged in

The impact of the tariffs imposed this week falls particularly hard on Scotland as rival products from the EU – such as single malt from the Republic of Ireland and cashmere from Italy – have been spared the tariffs.

Patricia Dillon from Speyside distillery near Aviemore said she felt the company was being unfairly drawn into a dispute not of its making and would have to review its plans to increase the 60,000 litres of Spey whisky it currently exports tariff-free to the US.

“We feel we have been dragged into a trade war that has nothing to do with us whatsoever,” she said.

“A 25% tariff is not something we can absorb, so we have to reconsider our position in the US market.”

t cashmere maker Johnston’s of Elgin, chief executive Simon Cotton said the tariffs would put his company at a disadvantage to their main Italian rivals and would limit its future growth plans.

“This is going to hit consumers in the US, their cashmere will be more expensive. That in turn means we will be able to export less, grow less and we will have to downscale our plans.”

Highest priority

Michael Froman insisted the UK was not being unfairly targeted – as there would be tariffs on French German and Spanish products.

But what the dispute illustrates is that trade is very complicated: it’s a balancing act between international and domestic politics and economics.

In this detailed and delicate balance, not every sector will win. Some will have to lose for both sides to get something out of it.

On a more fundamental level, Mr Froman says the UK is going to have to make some very difficult choices if it is serious about concluding a trade deal with the US.

“The UK in particular is in a difficult position. After Brexit it has got to decide how closely it wants to remain aligned with EU regulations – which is still its biggest trading partner – and how much it wants to open itself up to partners with different standards – like the US.”

The UK government told the BBC that securing a trade deal with the US is one of its highest priorities. Is it as high as securing a trade deal with the EU? That’s important because a trade deal with one makes a trade deal with the other more difficult.

As for the tariffs coming in this week – the subject was raised on a personal call with Donald Trump last week with the prime minister urging him to rethink.

Johnston’s of Elgin is hoping that Johnson of Downing Street can persuade the US to give Scottish business a last minute reprieve.


Eurozone gets fresh help to bolster flagging growth

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The European Central Bank has unveiled fresh stimulus measures to bolster the eurozone, including cutting a key interest rate.

The deposit facility rate, paid by banks on reserves parked at the ECB, was already negative, but has now been cut from minus 0.4% to minus 0.5%.

The ECB also said it was re-starting quantitative easing. It will buy €20bn of debt a month from 1 November.

The eurozone’s main interest rate has remained unchanged at zero.

The moves come as the ECB combats an economic slowdown. The bank said its asset purchase programme would “run for as long as necessary”, while interest rates would remain “at their present or lower levels” until eurozone inflation reached its target rate of 2%.

Quantitative easing, or QE, is a way for central banks to pump money into the financial system when interest rates are ultra-low and conventional stimulus methods no longer work.

The central bank buys assets, usually government bonds, with money it has “printed” – or, more accurately, created electronically.

Making more money available in this way is supposed to encourage financial institutions to lend more to businesses and individuals.

Under its previous QE programme, the ECB bought €2.6 trillion of bonds between 2015 and 2018.

 

ECB chief Mario Draghi told a news conference that the inflation outlook had been further downgraded.

“Headline inflation is likely to decline before rising again towards the end of the year,” he said.

Mr Draghi also announced that the ECB had lowered this year’s and next year’s GDP growth forecasts for the eurozone. It now expects growth of 1.1% this year and 1.2% in 2020.

He said the eurozone was suffering from the “prevailing weakness of international trade in an environment of prolonged global uncertainties”.

The eurozone’s biggest economy, Germany, is widely thought to be on the brink of recession.

The ECB’s decisions drew a swift reaction from US President Donald Trump, who tweeted that the ECB was “trying, and succeeding, in depreciating the euro against the VERY strong dollar”.

Mr Draghi Said “We have a mandate, we pursue price stability, and we do not target exchange rates, period.”

‘Serious policy easing’

Mr Draghi is due to make way for incoming ECB President Christine Lagarde on 1 November.

The ECB’s main refinancing rate has been at zero since March 2016.

“At first glance, the ECB has not quite thrown the kitchen sink at the eurozone economy,” said Ranko Berich, head of market analysis at Monex Europe.

“The QE package is shy of market expectations, which were €30bn a month. But the Bank is clearly back in the business of serious policy easing and more aggressive action could easily be taken in response to a worsening in conditions.”


Analysis

By Andrew Walker, BBC economics correspondent

So the ECB has fired off another volley of its monetary policy ammunition. But will it hit the target? Will it get inflation up towards the ECB’s target and will it stimulate the eurozone’s flagging economy? Many people are very sceptical.

The interest rate move takes us even further into the strange world of negative rates. There is a view that that measure is actually counterproductive, that it has an adverse impact on bank profitability. Perhaps ECB policy more widely has reached the limit of its ability to stimulate economic activity.

The other main weapon against economic weakness is in the hands of governments – fiscal policy, or public spending and taxation. For some governments in the eurozone, their scope to use that weapon is constrained by the amount of debt they already have and by eurozone rules. But the likely next head of the ECB, Christine Lagarde has called for more action in that area.

Countries such as Germany have strong government finances, but so far have been wary of departing from what they see as prudent financial management. There is, however, a growing debate about what the eurozone needs.


Brexit: What happens now?

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New UK Prime Minister Boris Johnson says he plans to renegotiate the Brexit deal agreed with the EU by his predecessor Theresa May. He says he is committed to leaving on 31 October come what may.

That does not mean we can be certain about what will happen. There are still many possible outcomes.

Chart on how the government could seek renegotiation of the Brexit deal.

Mrs May’s deal with the EU had two main elements – a binding withdrawal agreement (on the terms of the UK’s departure) and a non-binding political declaration (on the shape of the long-term future relationship). The deal was resoundingly rejected by MPs.

Mr Johnson’s plan is to negotiate with the EU to remove the Northern Ireland backstop from the withdrawal agreement (WA). The backstop was designed to ensure there could be no return to a hard border on the island of Ireland. (It would keep the UK in a customs union with the EU if there is no free trade agreement that avoids a hard border ie physical infrastructure and checks on goods.)

Mr Johnson would also like changes to the political declaration.

The difficulty is that up to now the EU has consistently said it will not reopen the withdrawal agreement, although the EU is open to changes to the political declaration. Mr Johnson insists they will reconsider now it is clear that the British government is prepared to leave without a deal. And he says that the backstop is unnecessary to prevent a hard border.

Another factor is time. Nothing much is usually done in Brussels during August, and the new European Commission does not take office until 1 November.

Mr Johnson is determined that Brexit should happen on 31 October, even if a new deal has been agreed in principle but not ratified and brought into law. In those circumstances there would almost certainly be questions about whether a short delay was sensible.

Perhaps the biggest question, though, is what would happen if no new deal is negotiated – or if MPs reject whatever new deal is brought back.

1. No deal
No-deal Brexit is still the default outcome if MPs cannot agree anything else and there are no further extensions. The deadline is 31 October.

It would also be possible for MPs to back a no-deal Brexit, although there has been a majority against that option when they have voted on it before.

There has been considerable discussion about whether MPs would be able to stop no deal if the new prime minister was determined to press ahead.

It has been suggested Mr Johnson could prorogue Parliament to let a no-deal Brexit happen. Proroguing effectively means Parliament is shut down – there would be no debates or votes.

In July, MPs and Lords voted for a measure that attempts to stop Parliament being closed down.

If MPs did want to oppose no-deal Brexit and did get a chance to do so, their ultimate weapon would be ousting the prime minster through a confidence vote.

2. Another no-confidence vote
Theresa May’s government survived a vote of no confidence on 16 January by 325 votes to 306. Labour could table a no confidence motion in the new government at any time.

Flowchart explaining process of vote of no confidence

Under the Fixed Term Parliaments Act 2011, UK general elections are only supposed to happen every five years. The next one is due in 2022.

But a vote of no confidence lets MPs vote on whether they want the government to continue. The motion must be worded: “That this House has no confidence in Her Majesty’s Government.”

If a majority of MPs vote for the motion then it starts a 14-day countdown.

If during that time the current government or any other alternative government cannot win a new vote of confidence, then an early general election would be called.

That election cannot happen for at least 25 working days but the precise date is set by royal proclamation on the advice of the prime minister. So the election could come after Brexit has happened if there’s no further delay.

3. Request a general election
A vote of no confidence isn’t the only way to bring about an early election. It could be that Boris Johnson decides it’s his best way forward.

Chart on how the government could call an election.

The prime minister does not have the power just to call an election. But, as in 2017, Mr Johnson could ask MPs to vote for an early election under the terms of the Fixed Term Parliaments Act.

Two-thirds of all MPs would need to support the move. The earliest date for the election would be 25 working days later but it could be after that – the prime minister would choose the precise date.

4. Another referendum
A further possibility is to hold another referendum.

It could have the same status as the 2016 referendum, which was legally non-binding and advisory. But some MPs want to hold a binding referendum where the result would automatically take effect – like with the 2011 referendum on changing the voting system for UK general elections.

One widely discussed option would be for a “confirmatory vote” – where the public would be given the choice between accepting a deal or remaining in the EU.

Chart on referendum options

Others argue that any further referendum should have the option of leaving the EU without a deal.

Either way, a referendum cannot just happen automatically. The rules for referendums are set out in a law called the Political Parties, Elections and Referendums Act 2000.

There would have to be a new piece of legislation to make a referendum happen and to determine the rules, such as who would be allowed to vote.

It could not be rushed through, because there has to be time for the Electoral Commission to consider and advise on the referendum question.

The question is then defined in the legislation.

Once the legislation has been passed, the referendum could not happen immediately either. There would have to be a statutory “referendum period” before the vote takes place.

Experts at University College London’s Constitution Unit suggest that the minimum time for all of the required steps above is about 22 weeks. That already takes us beyond 31 October.

5. Cancel Brexit
The European Court of Justice has ruled that it would be legal for the UK to unilaterally revoke Article 50 to cancel Brexit (without the need for agreement from the other 27 EU countries).

It is not totally clear what the process would be. But an act of Parliament calling for Article 50 to be revoked would probably be sufficient.