Closed Brexit: Boris Johnson gives last-minute push for deal

EU Commission Brexit talks, Brussels, Belgium - 11 Oct 2019

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Brexit talks going down to the wire

Welcome to the FT’s live coverage as UK and EU negotiators race to get a Brexit deal over the line in Brussels. Back in London, Boris Johnson is pushing to drum up political support for any agreement. 

We will bring you the latest developments along with the political and market reaction right here. 

Questions over DUP support

Persuading Northern Ireland’s DUP to support any Brexit deal is emerging as a key domestic difficulty for Boris Johnson. Here is the latest from the FT’s political editor George Parker:

The DUP has described as “nonsense” reports that it is haggling with Boris Johnson over a big cash injection into Northern Ireland in exchange for the party’s support for the Brexit deal taking shape in Brussels.

However, Mr Johnson has already announced a “New Deal for Northern Ireland” as part of any settlement “to support infrastructure projects, particularly with a cross-border focus”. The DUP has already secured over £1bn for NI as part of its “confidence and supply” deal with the Tories.

Nick Macpherson, the former permanent secretary of the Treasury, points out that all talks about Northern Ireland end up turning to cash.

Pound slips with all eyes on chances of a deal

The pound fell 0.3 per cent by late morning in London, as traders refined their expectations for a deal following a burst of optimism that has swept markets since the end of last week. Sterling has risen more than 3.5 per cent since Thursday morning.

It was 0.4 per cent lower against the euro at €1.1540 on a choppy day of trading, with markets reacting to every headline and leak coming out of London and the other EU capitals.

‘Issues’ remain but pathway exists to possible deal, says Varadkar

“Many issues” need to be settled despite progress in the Brexit talks, Leo Varadkar said after he spoke by phone on Wednesday morning with Boris Johnson and the European Commission, writes Arthur Beesley in Dublin.

“There is a pathway to a possible deal but there are many issues that still need to be fully resolved, particularly around the consent mechanism and also some issues around customs and VAT,” Mr Varadkar said in a speech in Dublin.

I do think we are making progress and hopefully that can be done today

On the eve of the critical EU summit in Brussels, the Irish taoiseach raised the prospect of an additional one being called before the October 31 Brexit deadline to break the deadlock.

Although time is running short, I am confident that [Irish] objectives can be met.

Government will comply with the law, says Brexit secretary

Stephen Barclay, the UK Brexit secretary, was asked by the Brexit Committee this morning: if no agreement is sealed by Saturday, will the government send a letter seeking a later withdrawal date of January 31? writes Jim Pickard, the FT’s chief political correspondent.

This extension requirement is enshrined in law by the Benn Act designed by Hilary Benn, chair of the committee. Mr Barclay replied: “The government will comply with the law.”

Separately Mr Barclay was pressed by Labour MPs about the removal from the proposed political declaration of UK equivalence on various employment, consumer and environmental rights.

That could turn out to be a major issue if it deters Labour MPs from backing any new Johnson deal.

Mr Barclay told the MPs: “I don’t think there is any desire to have a deregulatory approach.”

Downing Street: ‘More work to do’

An update from political editor George Parker:

Number 10 says “progress has been made” in late night/early morning negotiations in Brussels but that “there’s still more work to do”. Boris Johnson’s spokesman doesn’t want to talk about possibility of a second summit next week: “Our focus is only on the summit taking place on Thursday and Friday.”

Downing Street says cabinet scheduled for 4pm moved to 2.30pm. Government sources insist that nothing should be read into the time shift, just that it fitted in with people’s diaries.

Senior DUP MP reveals lingering concerns over Johnson proposal

Sammy Wilson, the senior DUP MP, is currently questioning Stephen Barclay about the consequences of the proposed deal for Northern Ireland, writes Jim Pickard.

It’s clear that he has some lingering concerns about the Johnson plan. He is arguing at the Brexit committee that any changes to the powers of the Northern Ireland assembly must come not just from a majority vote but from a cross-community vote otherwise it would be “explicitly against the terms of the (Belfast) Agreement”.

Mr Barclay replies that no one would expect him to reveal the substance of the current negotiations.

Mr Wilson concludes by asking the Brexit secretary what assessments the government has made about the kind of checks that would be required between Great Britain and Northern Ireland.

Mr Barclay replies – far from convincingly – that “one would have to have clarity in what those arrangements are before one can assess what impact assessments are required”.

Deutsche Bank: Entering crunch time for UK assets

Deutsche Bank thinks we are entering a “very delicate” 24 to 48 hour period.

The investment bank’s macro strategist Oliver Harvey said there is now “one important question for the market”

Is an agreement at a political or legal level reached in the next 24/48 hours between the UK government and EU27? If so, we would maintain our bullish sterling and bearish real rates recommendation from last week. If not, we would close these recommendations.

Barnier to update ambassadors on Brexit soon, EU diplomats say

Michel Barnier, the EU’s chief Brexit negotiator, will brief national ambassadors on the state of play at around 2pm Brussels time, EU diplomats told the Financial Times, writes Jim Brunsden in Brussels.

EU officials said that there remain several outstanding issues in the talks. These include measures to combat value-added tax fraud, and the question of how to give a say over the Irish border arrangements to the Northern Ireland assembly.

The EU still has concerns about Boris Johnson’s desire to junk commitments made by Theresa May to stick closely to EU regulations after Brexit.

Diplomats said that there was a real possibility that a deal could be done today, while Mr Barnier gave an upbeat assessment to the European Commission this morning.

“They are trying to get it done,” said one official.

DUP privately accepts customs plans but sticking point remains, says official

A government official close to the negotiations has told the Financial Times that the Democratic Unionist party has privately accepted Boris Johnson’s customs proposals, but the major sticking point was over a potential mechanism to give Northern Ireland democratic consent over any special arrangements, writes Laura Hughes.

The official said there was relief in Downing Street after the DUP, the dominant pro-British party, did not outright reject Mr Johnson’s plan, following a meeting between the party’s leader Arlene Foster and the UK prime minister on Tuesday night.

The official added though:

There is no sugarcoating in Downing Street that last night’s meeting did not go that well

Brexiter votes could be key

If a new Brexit deal lands, the votes of European Research Group caucus of Brexit-supporting MPs will be crucial. So far the group has been warm towards the prospect of a new deal but has not said it will endorse it until they can examine details, Sebastian Payne writes.

Mark Francois, deputy chair of the group, told the BBC that the ERG did not know much beyond what was discussed yesterday:

“We had a meeting yesterday at No10, we’ve got another meeting later this afternoon. We haven’t yet been given the full details of the deal because, by the sound of it, it hasn’t been finalised with Brussels.

If and when a new Brexit deal lands, Mr Francois said that they will meet on Saturday morning to decide whether to back it. It is worth noting that in the third vote on Theresa May’s Brexit deal, the ERG split: 28 “Spartans” did not back it, but the rest of the group did:

The ERG met last night…and we agreed at that meeting that if there is a deal and we’re going to have, in effect, meaningful vote four on Saturday, then the ERG will meet that morning, the officers will make a recommendation to the ERG on whether to support the deal – once we’ve read the details. We’ll debate it and then it’ll be up to every individual member of the ERG as it were to look into their heart and decide what is best for their country.

In response to some voracious heckling from anti-Brexit protests, Mr Francois added: “If we leave, it will be delightful that this idiot will shut up.”

EU27 meeting pushed back

Mehreen Khan and Jim Brunsden have the latest from Brussels:

EU27 ambassadors, who were due to be briefed by Michel Barnier at 1400 (CET) have had their briefing pushed back to 1700 (CET). One ambassador says the delay is being seen positively, buying more time for a potential deal to be thrashed out by the two sides.

Dimitris Avramopoulos, Greece’s member of the European Commission, said that the ongoing negotiations “have been constructive but there still remains a number of significant issues to resolve.”

Speaking after Mr Barnier debriefed the commission’s leadership, he said that the Frenchman would confer with members of the European Parliament this afternoon as well as national ambassadors.

Asked about the prospects of a deal, Mr Avramopoulos said: “it’s a question of some hours for this question to be answered.”

One EU official said Barnier told the commissioners that he was “optimistic” that there would be a deal.

DUP Brexit secretary calls for cross-community consent

Sammy Wilson, the DUP’s Brexit secretary, has tweeted:

The GFA requires cross community consent for all controversial issues passing through the Assembly. UK & EU negotiators, who have ad nauseam pontificated about the need to respect the Agreement, have no business interfering in the processes for consent as currently set out.

The government and the EU’s commitment to uphold the Belfast Agreement will soon be put to the test.

Traders bracing themselves for pound volatility

As uncertainty over the likelihood of a Brexit deal continues, investors are positioning for turbulence in the run-up to the October 31 deadline.

Expectations for sterling volatility over the next week have risen to their highest level since the aftermath of the Brexit vote in 2016, as traders have moved into contracts in the options market that pay out if the currency fluctuates.

Investors’ expectations for swings over the next three months have also risen sharply, and are now at their highest levels of the year.

“There is no grey area here at the moment we have two potential outcomes. If you have this completely binary situation then that is generally very good for volatility,” Neil Jones, head of FX sales for financial institutions at Mizuho Bank said.

You can read more on currency market positioning here.

1922 committee meeting of backbench Tory MPs pushed earlier

A meeting of the 1922 committee of backbench Conservative MPs has been moved forward from 7:30pm to 4:30pm London time, writes Sebastian Payne.

The exact reason is unknown but No 10 insiders have suggested that prime minister Boris Johnson could fly to Brussels as early as this evening, presumably to get a Brexit deal over the line.

Boris Johnson battles for support

Here’s where we stand on a day of fast-moving developments in Brussels and London:

• Negotiators in Brussels are racing to agree terms of a revised Brexit deal, with outstanding questions over arrangements for Northern Ireland still unsolved.

• The EU’s chief Brexit negotiator Michel Barnier told the European Commission he believed that an agreement was possible.

• Number 10 insiders have suggested that prime minister Boris Johnson could fly to Brussels as early as this evening.

• There are signs the prime minister is facing significant difficulties squaring any possible concessions with the DUP and Eurosceptic Conservative MPs.

• One EU diplomat said negotiations were “mired in difficulty in London”.

• A British official close to the negotiations said the DUP had privately accepted Mr Johnson’s customs proposals, but the sticking point was over a potential mechanism to give Northern Ireland democratic consent over any arrangements.

The FT’s full story on the talks is here.

The best-case scenario from Brussels

Negotiators in Brussels have broken for lunch.

EU27 diplomats have been kept in the dark about what’s happening in the negotiating room between David Frost and his counterparts today. They will be getting a debrief from Michel Barnier on the state of play at 1700 CET.

But ambassadors are beginning to game out scenarios ahead of tomorrow’s European Council summit where they will need to prepare their leaders for any eventual outcome, Mehreen Khan reports.

Among the most optimistic scenarios is that an agreement is reached today and leaders can give a “political yes” at the summit, said one senior diplomat.

However, having seen Theresa May return to London with deals that fail in the House of Commons, diplomats say any “yes” could be conditional on Boris Johnson proving he has the votes to support an agreement. EU27 leaders are already nervously anticipating Saturday’s potential Commons session as the real “make or break” moment for Brexit.

“This is the fourth time. We need clarity that we don’t end up with something that is voted down again”, said one senior national diplomat.

Should MPs give the deal a green light, the EU is likely to award extra time – a technical extension – to translate the new Withdrawal Agreement into a legal text in 23 languages and which has been approved by national capitals. It will also need to be ratified by the European Parliament.

But officials stress that we aren’t there yet. Until there is an agreement between Brussels and the UK government, diplomats are holding their breath.

DUP shuts down burst of market optimism

Sterling has been choppy all session but briefly reversed its losses for the day to jump above $1.28 following a line from Irish broadcaster RTÉ, citing EU sources, that the DUP had accepted the latest proposals.

But the DUP’s leader, Arlene Foster, has quickly denied the report. She said discussions continue, and a “sensible deal” is needed.

Expect further gyrations in markets as traders react to every possible development.

Ireland’s Varadkar still waiting for ‘stabilised’ text on Brexit

Leo Varadkar said there was still no “stabilised” text for a new Brexit treaty but signalled plans to brief Irish opposition leaders on the talks later on Wednesday, writes Arthur Beesley in Dublin.

“We want it to be — if you like — a stable briefing at a point when things aren’t still changing, and they are still changing as things stand,” Ireland’s taoiseach told parliament at lunchtime in Dublin.

At this stage no text has been stabilised. I have seen some draft texts but none are stabilised at this stage and for that reason they are confidential

Hilary Benn: MPs could push for second referendum on Saturday

Labour MP Hilary Benn, the chief architect of the legislation which seeks to avert a no-deal EU exit, has said MPs could push for a second referendum if parliament is asked to approve a Brexit deal this Saturday.

Speaking to the BBC, he said:

“There are many MPs who are in favour of a confirmatory referendum, as am I, and if the government brings a deal before the House on Saturday, then it wouldn’t surprise me at all if an effort was made to try and say OK, but subject to a confirmatory referendum. That is not a surprise to anyone, given the growing support that there is for that idea.”

There are suggestions that some MPs could try to take control of the order paper to attach a confirmatory referendum to any deal the government brings forward, although it is far from clear whether there are enough votes for such a manoeuvre in the House.

When the Commons held its indicative votes in April, the option for a public say on any deal failed by 13 votes, with 280 MPs supporting and 292 against. There were six abstentions.

Tusk says ‘everything should be clear’ on Brexit in a few hours’ time

Donald Tusk, EU council president who will be running Thursday’s summit, has told TVN 24 news that “theoretically, in seven to eight hours everything should be clear” on whether we have an agreement for a Brexit deal.

Yesterday evening I was ready to bet that it’s all set and agreed. Today there are certain doubts on the British side

Mr Tusk was speaking as talks between the UK and EU continue in Brussels.

Jean-Claude Juncker, European Commission president, left, and Mr Tusk in Brussels this afternoon

Sterling above $1.28

The pound has turned positive for the day and by 3pm London time was well above $1.28 with a 0.5 per rise against the US dollar. The currency rose 0.2 per cent against the euro to break above €1.16.

But given how choppy the trading has been today, the next Brexit headline could send it tumbling once again.

Update at 15:51: Sterling now back below $1.28. As you were.

The key sticking points

This from Jim Brunsden and Mehreen Khan in Brussels:

An EU official said that there are two main sticking points in the talks: the need to satisfy the Democratic Unionist party that Stormont will have enough of a say over the agreement, and also the need to satisfy Conservative Brexiters that the UK will be able to deviate from EU regulations after Brexit.

EU27 ambassadors, who were scheduled to have a debrief from Michel Barnier at 16.00 London time, have been told of another two-hour delay as talks continue in Brussels, reports Mehreen Khan in Brussels.

Buckle up for a long night…

Negotiators ‘awaiting feedback from London’

An EU official has told Jim Brunsden in Brussels that negotiators are “still awaiting feedback from London” on the latest plans on the table. “Talks still ongoing”, he said.

The comments are to explain the delay to Michel Barnier’s briefing of EU ambassadors, which is now scheduled for 19h Brussels time.

The sticking point for the DUP

The major sticking point for the DUP is over a potential mechanism to give Northern Ireland democratic consent over any special post-Brexit arrangements, Laura Hughes reports.

While reports have suggested the EU could offer the dissolved Northern Irish Assembly an ‘opt-out’ of EU alignment, the DUP are understood to be pushing for an ‘opt-in’.

In December 2017, the party insisted that democratic consent was required in circumstances where Northern Ireland would align alongside specific sectors of the EU single market.

DUP officials on Wednesday pointed to paragraph 50 of the EU-UK joint paper on “sufficient progress”, which was adopted by the European Council at the time.

It states:

“In the absence of agreed solutions, as set out in the previous paragraph, the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom, unless, consistent with the 1998 Agreement, the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland.”

Cabinet agrees to offer MPs weekend sitting

Sebastian Payne writes:

In today’s Cabinet meeting, ministers agreed to lay a business motion tonight to hold a special House of Commons sitting on Saturday – the first since the Falklands War.

That suggests No10 thinks there will be a deal of some sorts to debate and vote on. Ministers think that the Commons will sit in the morning from 9:30am, along the lines of Friday hours.

But there is doubt as to whether the motion will pass – as some Labour and Liberal Democrats MPs have suggested they will vote against it. If the Commons doesn’t vote to sit, the sitting won’t happen.

That’s all for today

We’re shutting down the FT’s live blog for today but there will be plenty more developments through Wednesday evening. We’ll have all the updates on