Brexit weekly briefing: 'dementia tax' debacle sidelines divorce talks

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The big picture

As Theresa May tried to dig her way out of the “dementia tax” debacle (see below), the EU27 unanimously signed off on their negotiating positions for Brexit talks, which will begin on 19 June.

Presenting the key directives in an 18-page document intended to cover the first phase of the negotiations, Michel Barnier, the European commission’s chief negotiator, said the bloc would insist the divorce deal was agreed before talks on the future relationship:

The Guardian last week revealed the long-awaited talks will begin 10 days after Britain’s general election – a week later than expected because of a row over the UK’s blocking of a mid-term review of the union’s budget.

Barnier also told the European parliament last week that he was not seeking “no deal or a bad deal”, and wanted to “conclude a deal with the UK, not against it”. It was time to drop the aggressive rhetoric and “create the foundations for ongoing trust that we need to build a future relationship”, he said.

Separately, however, he warned the European commission president, Jean-Claude Juncker, that the refusal of member states to soften their demands over the size of Britain’s “divorce bill” could lead to the talks collapsing and the UK crashing out.

The question of the UK’s divorce payment – which could hit €100bn (£86bn) – could prove the dealbreaker because France and Germany have refused to pay more into the EU budget to cover the hole left by the UK’s departure, while countries that receive the most from EU funds are opposed to any cuts in spending.

The UK’s Brexit secretary, David Davis, reinforced the impression that the bill could prove a major obstacle to an agreement, telling the Sunday Times that Britain would walk out of the talks unless the EU reduced its demands:

The view from Europe

Countries seeking a trade deal with the EU will have to meet its standards on labour law and fair competition, the EU’s competition commissioner said in remarks that could have a bearing on any future UK deal.

While a UK deal would necessarily be different because of the existing relationship between the two parties, Margrethe Vestager made clear the bloc would not entertain a “race to the bottom” on social and environmental standards or tax competition.

German business, meanwhile, again warned Britain to think again if it believes pressure from German exporters, such as carmakers, would persuade EU negotiators to maintain free trade access after the UK leaves.

Steffen Kampeter, chief executive of the German employers’ federation, indicated that for the EU27, politics would outweigh economics:

Good news, though, came from the European court of justice, which in an unexpected ruling made it harder for national parliaments to block key components of any post-Brexit trade deal.

In a long-awaited test case, the court ruled that while member state ratification is required in specific areas, such as inward investment and dispute resolution, EU officials had otherwise broad powers to negotiate international trade deals.

Meanwhile, back in Westminster

With Westminster still deserted bar the occasional journalist and the 24-hour patrols who make sure parliament somehow doesn’t set itself on fire, the political trail has spread far and wide, with less than three weeks to go till the election.

The Conservatives, Labour and Lib Dems launched their manifestos. There is little mention about the effects of Brexit – except from the Lib Dems, who are basing much of their election strategy around the subject.

For all Theresa May’s talk of “strong and stable leadership”, it was her party which had the wobbliest week, making a U-turn on plans to finance social care only four days after unveiling them as a key element of the manifesto.

Announcing the change in Wrexham, an irate May dismissed the idea this was a U-turn, insisting “nothing has changed” on the core principle of how older people would contribute to their care costs.

On Brexit-related matters, the Greens made the subject a key part of their appeal to younger voters, arguing they had been “betrayed” by May’s choice to go for a harder variant of departure from the EU.

There was also the first TV debate of the campaign, though it featured neither May nor Corbyn. The former had announced she was boycotting the format, prompting the Labour leader to follow suit.

The exchanges were long and sometimes fierce, even if the main takeaway from the night was that Paul Nuttall, the Ukip leader, seems to call women “Natalie” when he is not sure of their real name.

Either that, or he thinks the star of Splendor in the Grass leads Plaid Cymru.

You should also know

• Plaid Cymru’s manifesto promises to protect Wales after Brexit.

• Brexit-related price rises are a big worry for UK consumers.

• The UK needs net immigration of 200,000 a year to avert “Brexit catastrophe”.

• May promises a Conservative government will invest heavily in Scotland.

• Merkel ally Manfred Weber says the divorce bill may be easier to resolve than citizens’ rights and Irish border.

• Pro-remain cabinet minister Damian Green calls on voters to back May.

• Former archbishop of Canterbury Rowan Williams says Britons are “peering into the abyss” after the Brexit vote.

Read these

In the Guardian, Anne Perkins argues that by “lashing themselves to the mast” of a second referendum on the terms of the Brexit deal when the remain vote appears to be fading, the Lib Dems are not doing themselves any favours:

On a similar theme, John Denham in the New Statesman argues that the Brexit referendum gave people the agreeable feeling that their vote actually mattered and had changed something – which is not good news for the Labour party:

Tweet of the week

Deputy director of British Influence Jonathan Lis (among many others) suspects May’s social care U-turn does not augur well for Brexit negotiations: