Cabinet splits

The semblance of unity behind a “life-as-normal” Brexit didn’t last. Less than two days after Chancellor of the Exchequer Philip Hammond outlined a plan for a long transition after the March 2019 breakup, Cabinet colleagues began challenging the details. Trade Secretary Liam Fox used a Sunday Times interview to deny that ministers had agreed to allow European Union citizens to freely live, travel to, and work in the U.K. beyond the two-year negotiations. He argued doing so would “not keep faith” with voters’ decision to leave. Over in the Sunday Telegraph, economist Gerard Lyons, a former adviser to Foreign Secretary Boris Johnson, warned against “alarmist talk” and said any transition should last just two years, shorter than what Hammond has proposed. Former Brexit Minister David Jones told the Mail on Sunday that Remainers such as Hammond had used May’s holiday to “go on maneuvers.” The comments underscore the factions within May’s Cabinet and how they feel free to freelance after her election gamble backfired in June. They will also add to suspicion on the continent that Britain still doesn’t know what form it wants Brexit to take with the clock ticking down. “While a consensus is emerging in cabinet on a transitional period that lasts until the next election in 2022, there is no agreement on its nature, and certainly no acceptance that it will simply prolong the status quo,” said Mujtaba Rahman, managing director of consultancy Eurasia Group. “This consensus is fragile.” Hammond is off to Brazil this week. In an interview in Le Monde, he said Britain will not slash taxes and regulations after Brexit. – Simon Kennedy Problems at the Border? Customs checks at the British border after Brexit could cost £1 billion a year and cause delays for goods being shipped in both directions, according to a report by economic consultancy Oxera. The estimate assumes low regulation but high levels of enforcement and is based on World Trade Organization data on the cost of trading across borders, analyst Andrew Meaney wrote. Meaney described the figure as “extremely conservative,” saying it does not take into account the economic costs of uncertainty involved, extra staff members, traffic congestion, or land on which to conduct the checks. The actual number would likely be much higher, he said. Pining for Brexit The faded Welsh industrial port of Milford Haven and the picturesque English harbor town of Brixham are economic worlds apart, but they’re both desperate to leave the EU. Locals say Brexit can boost their fishing industry, but they worry about cutting off access to markets. The competing desires are emblematic of a paradox among some of Brexit’s most ardent supporters. People in the industry want to get back autonomy over the country and its waters to shut out foreign competition. Yet they also want to retain the benefits of the single European market with no return to borders, tariffs and bureaucracy when shipping their goods to the continent. Bloomberg’s Hannah George talked to representatives from the sector. Foreign competition prompted Chris Davies, 60, to warn his son there was no future in fishing. “The industry’s been decimated, absolutely decimated,” said Davies, director of Welsh Seafoods Ltd., which supplies local restaurants and hotels. “The fish has been given away. It’s not our fish anymore. It’s almost all European fish, and that’s the end of it.” Brexit in Brief Brexit could be stopped if the Labour Party pledged to remain in the bloc as part of an election manifesto or committed to a second referendum, London Mayor Sadiq Khan told the Guardian Labour grandees want a commitment to remaining in the single market, the Observer reported The Bloomberg Brexit Barometer rose sharply to 26.7, its highest level in four months, on the back of strong manufacturing and services indicators. The higher the number, the healthier the economy — and vice versa Mitsubishi UFJ Financial Group is considering Amsterdam and Paris as a base for its securities operations in the EU once the U.K. leaves. The Financial Times said the Dutch capital is the favorite China’s Global Times, which is affiliated with the ruling Communist Party, said in an editorial that Brexit weakens U.K. influence and that “Britain should be aware that if the country’s new aircraft carriers are sent to patrol the South China Sea, the Chinese will view it as a provocation” U.K. business confidence falls to lowest in six months, Lloyds says Uncertainty over the regulatory regime post-Brexit means AstraZeneca will “wait to see” before making key decisions on whether to invest more in the U.K., Chief Executive Officer Pascal Soriot told the FT Luxembourg Prime Minister Xavier Bettel warned of a £54 billion Brexit bill and echoed former British Prime Minister Margaret Thatcher by saying “we want out money back.”