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Redacted Brexit reports spark new row in UK parliament

Redacted Brexit reports spark new row in UK parliament

By Elizabeth Piper

LONDON (Reuters) – Prime Minister Theresa May’s attempts to keep her Brexit plans secret provoked a new row on Tuesday when lawmakers criticized her for failing to hand over complete studies on the economic impact of Britain’s leaving the European Union.

The government had promised to share more than 50 studies on how Brexit would impact different economic sectors, but late on Monday, it gave them some of the reports with parts redacted because of what it called their sensitivity.

The lawmakers hit back, saying the government was riding roughshod over a democratically elected parliament.

“In my experience … the best decisions in life are the ones which are held up to the light and tested,” Keir Starmer, Brexit policy chief for the opposition Labour Party, told Sky News.

Arguments that the economy would suffer if it left the EU were rejected by many Britons at last year’s referendum when the country voted to leave.

But with the economy struggling with lower growth since the vote, some of those who argue that Britain should reverse its decision or at least strive for a softer Brexit that maintains close ties say knowledge of the impact could change minds.

The government has been reluctant to share its impact assessments, with May saying she has to play her cards close to her chest to win the best available deal with the EU.

Last month, parliament used an archaic rule to force the government to hand over what Brexit minister David Davis had earlier referred to as “our 57 studies (that) cover 85 percent of the economy – everything except sectors that are not affected by international trade”.

Late on Monday, Davis wrote to a parliamentary committee on Brexit that the papers had been redacted because he had not been given guarantees that lawmakers would keep the details secret.

That move, Labour and the Scottish National Party say, could place the government in contempt of parliament, which could lead to suspension or expulsion from the House of Commons.

“The government is under an obligation to pass this material to the Brexit Select Committee and, if it appears to be failing in the obligation, we intend to raise it with the Speaker,” Starmer told the BBC.

“The government could be in contempt of parliament.”

(Editing by Stephen Addison)

EU to sign joint defense pact in show of post-Brexit unity

EU to sign joint defense pact in show of post-Brexit unity

By Andrea Shalal and Robin Emmott

BERLIN/BRUSSELS (Reuters) – At least 20 countries in the European Union will sign up to a new defense pact next week, promoted by France and Germany, to fund and develop joint military hardware in a show of unity following Britain’s decision to quit the bloc.

After years of spending cutbacks in Europe and a heavy reliance on the United States through the NATO alliance, France and Germany hope the accord, to be signed on Nov. 13 in Brussels, will tie nations into tighter defense collaboration covering troops and weapons.

The Permanent Structured Cooperation, or PESCO, could be the biggest leap in EU defense policy in decades and may go some way to matching the bloc’s economic and trade prowess with a more powerful military.

But differences remain between Paris and Berlin over what countries legally bound by the pact should do, EU diplomats said.

France wanted a core group of governments to bring money and military assets to PESCO as well as a willingness to intervene abroad. Germany has sought to broaden the pact to make it inclusive, which some experts say could make it less effective.

“This has to bring about a higher level of commitment if it is going to work,” said a EU official, describing PESCO as a ‘defense marriage’. “The EU already has plenty of forums for discussion,” the official said.

So far France, Germany, Italy, Spain and around 16 other EU countries have pledged to join the pact, which could formally be launched when EU leaders meet in December. Some other members, including Denmark, Portugal, Malta and Ireland, have yet to commit themselves publicly.

But it was clear that Britain, which intends to leave the bloc following the Brexit referendum of June 2016, would not participate, officials said. Britain has long sought to block EU defense cooperation, fearing it could result in an EU army.

French diplomats said the pact would have several areas where EU governments would agree to work together and pledge funds, including EU military operations, investment and acquiring defense capabilities together as a group.

A German official said the initiative won momentum from French President Emmanuel Macron’s call for a European intervention force in September and U.S. President Donald Trump’s insistence that Europe do more for its security.

Proposals for PESCO include work on a European medical command and a network of logistic hubs in Europe, creation of a crisis response center, and joint training of military officers.

A key goal is to reduce the numbers of weapons systems and prevent duplication to save money and improve joint operations.

It could also serve as an umbrella for projects such as a Franco-German initiative to design a new fighter jet, and existing bilateral military cooperation agreements, such as the close ties between Germany and the Netherlands.

MILITARY “SCHENGEN”

Efforts under the pact will be closely coordinated with the U.S.-led NATO alliance to ensure transparency and avoid any redundancies, the German official said.

One area where NATO and EU officials see common ground is in the need for a military zone for free movement of troops and equipment, loosely based on the EU’s passport-free travel “Schengen” zone.

“I welcome integration to the maximum extent practical. We obviously want to avoid duplication and maximize transparency,” U.S. Air Force General Tod Wolters, NATO Allied Air Commander, told Reuters.

Under the plans, the North Atlantic Treaty Organisation would focus on collective defense, while PESCO would ensure a quicker and more efficient EU response to events like the 2014 Ebola crisis in Africa, the official said.

“This will not happen in competition with NATO,” the German official said.

(Reporting by Andrea Shalal and Robin Emmott; Editing by Richard Balmforth and Peter Graff)

Britain’s May urges EU to break deadlock in Brexit talks

Britain's Prime Minister Theresa May (C) attends the EU summit in Brussels, Belgium October 19, 2017. REUTERS/Yves Herman

By Elizabeth Piper and Alastair Macdonald

BRUSSELS (Reuters) – Prime Minister Theresa May urged the European Union on Thursday to break the deadlock and move forward with Brexit talks, asking the bloc’s leaders to respond with “urgency” on easing the fears of their citizens living in Britain.

Arriving at a two-day summit in Brussels with other EU leaders, May sought to lower any remaining expectation that she could win a breakthrough in the talks to unravel more than 40 years of union. Instead, she turned the focus to making progress in the coming weeks, particularly on citizens’ rights.

Weakened by losing her Conservative Party’s majority in a June election and failing to rally support at an ill-fated party conference, May cannot move on the EU’s insistence on increasing her pay offer for the divorce agreement.

She is hamstrung by demands in her own party for her to walk away unless the EU agrees to moving the talks forward to discuss trade, and Germany which does not want to be left with a large bill when Britain leaves the bloc in March 2019.

“We’ll … be looking at the concrete progress that has been made in our exit negotiations and setting out ambitious plans for the weeks ahead. I particularly, for example, want to see an urgency in reaching an agreement on citizens’ rights,” May told reporters.

But she avoided questions about increasing the amount Britain is willing to pay when it leaves the EU, instead referring back to a speech last month in Italy when she outlined an offer of around 20 billion euros ($24 billion) to try to improve the tone.

“That speech … set out that ambitious vision and I look forward to us being able to progress that in the weeks ahead,” she said.

Without a new offer on the money, May has attempted to change the focus by offering concessions on the protection of the rights of around 3 million EU citizens living in Britain, promising to make it as easy as possible for them to stay.

On her Facebook page, May wrote that “we are in touching distance of agreement” and asked the EU to show the “flexibility and creativity” to secure a deal in the coming weeks.

While welcome, this is unlikely to alter the outcome of the Brussels summit, where on Friday morning, when May has left, the bloc is expected to say the Brexit talks had not yet made enough progress for them to open the post-Brexit trade negotiations.

CHANGE OF TACK

That lack of movement has increased the pressure on May from her own party, particularly a small number of Brexit campaigners who have long said that the prime minister should walk away from the talks if the EU did not move them forward.

In an open letter to May on Thursday, pro-Brexit lawmakers and business people said that unless the talks moved to trade, Britain should signal it is ready to be subject to World Trade Organization (WTO) rules from March 30, 2019, when Brexit takes effect.

The government says it does not want to crash out of the EU and is working to secure a deal. But comments that ministers are planning for the possibility of a no deal have been pounced on by the Britain’s main opposition Labour Party.

Jeremy Corbyn, whose party has matched and sometimes beats May’s Conservatives in the opinion polls, arrived in Brussels on Thursday to meet EU lawmakers to try to break “the Brexit logjam” created by what he called government “bungling”.

Seen as having little chance of becoming prime minister last year, Corbyn is now being listened to in Brussels and was due to meet the bloc’s chief negotiator, Michel Barnier, and other officials on Thursday.

Recognising May’s position at home, EU leaders are expected to make a “gesture” by telling EU staff to prepare for talks on a transition period needed to ease uncertainty for business. But they warn there is still a lot to be done.

“We have to work really hard between October and December to finalise this so-called first phase and to start negotiating on our future relationship with the UK,” Donald Tusk, the chairman of EU leaders, said on Wednesday.

($1 = 0.8454 euros)

(additional reporting by William James and Estelle Shirbon in London, Philip Blenkinsop and Gabriela Baczynska in Brussels; Editing by Alison Williams)

‘They have to pay’, EU’s Juncker says of Britain

President of the European Commission Jean-Claude Juncker listens at a news conference during the European Union Tallinn Digital Summit in Tallinn, Estonia, September 29, 2017. REUTERS/Ints Kalnins

LUXEMBOURG (Reuters) – Britain must commit to paying what it owes to the European Union before talks can begin about a future relationship with the bloc after Brexit, European Commission President Jean-Claude Juncker said on Friday.

“The British are discovering, as we are, day after day new problems. That’s the reason why this process will take longer than initially thought,” Juncker said in a speech to students in his native Luxembourg.

“We cannot find for the time being a real compromise as far as the remaining financial commitments of the UK are concerned. As we are not able to do this we will not be able to say in the European Council in October that now we can move to the second phase of negotiations,” Juncker said.

“They have to pay, they have to pay, not in an impossible way. I’m not in a revenge mood. I’m not hating the British.”

The EU has told Britain that a summit next week will conclude that insufficient progress has been made in talks for Brussels to open negotiations on a future trade deal. London has been hoping and pressing for this to happen at the summit.

(Reporting by Philip Blenkinsop in Brussels; Editing by Alastair Macdonald)

EU lawmakers give tentative nod to Brexit clearing law that could clobber Britain

European Commission President Jean-Claude Juncker addresses the European Parliament during a debate on The State of the European Union in Strasbourg, France, September 13, 2017. REUTERS/Christian Hartmann

By Huw Jones

LONDON (Reuters) – European Union lawmakers on Tuesday gave broad support to a law that could end the City of London’s global dominance in clearing euro-denominated financial contracts after Brexit.

The plan has raised hackles in Britain, where it threatens both job losses and tax revenues.

The draft EU law proposes that a foreign clearing house — which stands between two sides of a transaction to ensure its smooth completion — must be subject to more intense supervision by the bloc’s regulators if it wants to serve customers in the EU.

But if a clearing house is systemically important to the euro zone, then euro-denominated business with EU based customers must move to the bloc.

The draft law is anathema to Britain, which voted to leave the EU in a referendum last year.

It is home to LCH, an arm of the London Stock Exchange that clears most euro-denominated swaps in Europe. Financial services represent Britain’s biggest tax earning sector and the LSE has warned that thousands of jobs could leave the UK if euro clearing was forced out.

In the first debate in the European Parliament on Tuesday, lawmakers from the two biggest parties, the center right European People’s Party and the center-left Progressive Alliance of Socialists and Democrats, gave broad backing to the draft law, but called for some changes.

“It’s a good proposal from the European Commission,” Polish center-right MEP Danuta Huebner told parliament’s economic affairs committee.

“In principle, I support the proposal, which I find necessary,” added Roberto Gualtieri, an Italian center-left lawmaker who chairs the committee.

The European Parliament and EU states have final say on the reform, with changes expected during the approval process.

No timetable has been agreed for approving the law and, separately, there has been scant agreement on any new relationship between the EU and Britain.

That means LCH’s European customers don’t know at the moment if they can continue using the London clearer after Brexit.

Exploit this uncertainty, Frankfurt-based Eurex unveiled a “Brexit-proof” package of sweeteners on Monday to woo LCH customers.

BREXIT PROTECTIONISM

Huebner said parts of the draft law were too complex, creating uncertainty over how exactly EU regulators and the European Central Bank would decide when euro clearing conducted outside the bloc must move to the EU.

“We have to do everything to avoid potential inconsistency in decision-making,” Huebner said. “We must not politicize the whole process.”

Gualtieri said there was a need to “upgrade” EU supervision of clearing, but lawmakers should be “very cautious, reflective and in a listening mood” given the potential consequences.

Others said there was need to avoid protectionism or using clearing as a stick to beat Britain given that the UK was already “fighting with itself”.

Kay Swinburne, a British center-right lawmaker, a lone voice in outright opposition, said a regional restriction on a global currency is the wrong approach.

“There is a reason why we have done so much work at the global level, and I really hope that we are not going to throw all of that away to have some protectionism with regards to a Brexit decision,” Swinburne added.

Banks and the LSE have warned that forcing out some clearing would split markets and bump up costs for EU companies who use swaps to insure against adverse moves in borrowing costs, raw material prices, and currency swings.

(Reporting by Huw Jones Editing by Jeremy Gaunt)

UK top court seeks clarity on how to handle EU rulings after Brexit

The Union Flag and European Union flags fly near the Elizabeth Tower, housing the Big Ben bell, during the anti-Brexit 'People's March for Europe', in Parliament Square in central London, Britain September 9, 2017. REUTERS/Tolga Akmen

By Estelle Shirbon

LONDON (Reuters) – Britain’s Supreme Court would like clearer guidance from parliament on how it should deal with European Union court judgments after Brexit, its new president said on Thursday.

The issue of what weight, if any, judgments of the European Court of Justice (ECJ) will have in British law after the United Kingdom leaves the European Union is one of many thorny areas in the Brexit negotiations.

Brenda Hale, who was sworn in as president of the Supreme Court on Monday after serving as one of its justices for 13 years, said she and her colleagues were looking for guidance from parliament on the issue.

“We hope that the European Union Act, when it’s eventually passed, will tell us what we should be doing – giving us the power to take into account, or saying we must take into account, or saying we must ignore,” she told reporters.

“Whatever parliament decides we should do, we would like to be told because then we’ll get on and do it.”

A government policy paper issued in August said Britain wished to leave the “direct jurisdiction” of the ECJ while also recognizing that future civil judicial cooperation would need to take into account “regional legal arrangements” such as the ECJ.

The European Union says that for certain issues, such as the rights of EU citizens in Britain, the ECJ must continue to have its say – a stance strongly rejected by the most ardent advocates of Brexit.

Hale said the government policy papers issued over the summer were “at quite a high level of generality” and described them as aspirational.

But she praised the formulation used by Prime Minister Theresa May in a major speech on Brexit in Florence on Sept. 22. May said that where there was uncertainty around EU law, she wanted UK courts to be able to “take into account” ECJ judgments.

“‘Take account’ is quite useful because it does give one the power to take it into account, but also the power to say ‘for the following good reasons, we think something else,'” said Hale.

Her deputy, Jonathan Mance, said the form of words used in the EU Withdrawal Bill currently going through parliament was “a weaker formula”.

The bill says that British courts “need not have regard to anything done on or after exit day by the European Court … but may do so if it considers it appropriate to do so”.

(Editing by Stephen Addison)

EU urges swifter Brexit talks as London seeks ‘flexibility’

Britain's Secretary of State for Exiting the European Union David Davis (L) and European Union's chief Brexit negotiator Michel Barnier talk to the media, ahead of Brexit talks in Brussels, Belgium August 28, 2017. REUTERS/Francois Lenoir

By Gabriela Baczynska and Alastair Macdonald

BRUSSELS (Reuters) – The European Union’s chief negotiator Michel Barnier said on Monday he was concerned at the slow progress of Brexit talks, while his British counterpart David Davis called for “imagination and flexibility” to move on.

British officials arrived in Brussels on Monday hoping to push the EU toward talks about their post-Brexit ties, which the bloc refuses to launch until there is agreement on London’s exit bill and other pressing “divorce” matters, including the rights of EU citizens in Britain after March 2019.

“To be honest, I am concerned. Time passes quickly,” Barnier told reporters as he welcomed Davis back for a new round of talks. The third formal session since the process began in June, it is due to wind up on Thursday.

“We must start negotiating seriously,” Barnier said. “The sooner we remove the ambiguity, the sooner we will be in a position to discuss the future relationship.”

He welcomed a series of proposals London made over the summer break, but made clear they fell short of what EU leaders want to see before they will agree to open negotiations on the future free trade agreement the British government wants.

Impatient with the structure of talks agreed among the 27 other states and now binding Barnier’s negotiators, the British position papers made frequent reference to a future relationship with the EU rather than just the immediate task of bringing legal clarity for people and business when Britain leaves.

“The UK government has published a large number of papers covering important issues related to our withdrawal and our vision for a deep and special partnership,” Davis said.

“We want to lock in the points where we agree, unpick the areas where we disagree and make further progress on the whole range of issues,” he added.

To do that would require “flexibility and imagination from both sides”, he said.

But the EU wants to settle the major separation issues of ensuring expatriate rights, agreeing a divorce bill and squaring the circle of the future Irish border before jumping into talks about post-Brexit ties with London.

“The EU 27 and the European Parliament are united. They will not accept that separation issues are not addressed properly,” Barnier said. “I am ready to intensify negotiations over the coming weeks in order to advance.”

British officials took a relaxed view of Barnier’s implied criticisms, noting it was a familiar line from the former French minister, and dismissed a suggestion talks were going badly.

 

NO BREAKTHROUGH EXPECTED

The EU has already signaled that the slow progress so far has made talks about a new accord with Britain less likely to start after an EU summit in October, as had been hoped.

The EU and Britain seem far apart on agreeing how much London should pay the bloc on departure to account for previous commitments.

The Irish issue is extremely delicate because of the history of political violence there, as well as the complex economic consequences of Brexit.

Dublin said on Monday much of the future border arrangements between Northern Ireland and Ireland could be solved before Brexit talks enter the next phase.

Neither side expects major breakthroughs this week in talks aimed at unraveling more than 40 years of union. Neither seems ready for major political concessions at this stage.

An EU official said it was “clearly worrying that we have major differences of core issues … with very little time to land all this, even if Britain moves”.

Britain’s opposition Labour Party on Sunday offered an alternative to the policy pursued by Conservative Prime Minister Theresa May by saying it would stay in the European single market for a transitional period after Brexit.

The British and German chambers of commerce together urged negotiators on Monday to start talks about future trading relations, and particularly customs arrangements, swiftly.

Writing in Le Monde in his native France, Barnier said the EU and Britain must remain allies for their common defense: “The Union of 27 and the United Kingdom will have to join forces to stand up to common threats,” he said.

“The security of our citizens cannot be haggled over.”

 

(Additional reporting by Philip Blenkinsop and Jan Strupczewski; editing by Andrew Roche)

 

Slow divorce risks leaving future Britain-EU ties in limbo

FILE PHOTO: A worker arranges flags at the EU headquarters as Britain and the EU launch Brexit talks in Brussels, June 19, 2017. REUTERS/Francois Lenoir/File Photo

By Gabriela Baczynska

BRUSSELS (Reuters) – Divisions between Britain and the EU over mapping out their divorce will be laid bare in Brussels next week when the two sides meet for another round of talks whose timetable already looks tight.

Expectations of a breakthrough are minimal. London wants to focus on what happens after Brexit but the bloc says more ground must first be covered on settling the terms of departure, including the bill, leaving dozens of officials to pick their way through a diplomatic minefield from Monday to Thursday.

The 27 remaining EU states are also insisting on making headway on expatriate rights and the future status of the Irish border before declaring the “sufficient progress” that would allow them to broach talks about Britain’s future relationship with the EU.

Time is limited for negotiations, which started in June and should conclude before the expected Brexit date of March 2019. Otherwise Britain risks leaving the EU unclear on what happens next.

“There are no major expectations as regards next week’s round. The documents published by Britain (this week) refer more to the future relationship than the things to settle in the first place,” an EU diplomat said.

“Many matters, including the financial aspect most importantly, remain unclear from the British side… which makes any ‘significant progress’ less likely in (subsequent negotiations in) October.”

Talks have been slowed by an ill-judged snap election called by Prime Minister Theresa May that weakened her governing Conservative Party and exposed rifts among her ministers over what sort of Brexit they would seek.

Position papers released this week have made clear London will look to closely replicate many of its existing arrangements as an EU state after it leaves.

But the EU wants much more detail on the three priority areas before moving on to anything else.

“We won’t be talking about the future during this round,” an EU official said. “We need detail, the withdrawal deal …has to be a legal text.”

One key point of contention is London’s desire, reaffirmed this week, to break free from the jurisdiction of the EU’s top court, the European Court of Justice (ECJ).

For the EU, ensuring the ECJ can police the withdrawal and continue to have the final say in disputes involving EU citizens residing in Britain – and Britons living in the EU – is essential.

The bloc gave short shrift to what May called an initial “generous offer” on citizens’ rights, saying more detailed legal assurances were necessary.

While there is some common ground, sources on both sides say more technical work is needed. For a graphic, please see: http://tmsnrt.rs/2tws2uK

TIME IS MONEY

But the issue of money is seen by both sides as the hardest nut to crack for now. The EU has floated a divorce bill of around 60 billion euros ($71 billion), which London has dismissed as far too high.

“We should pay not a penny more, not a penny less of what we think our legal obligations amount to,” Britain’s foreign minister Boris Johnson said on Friday.

The bloc hopes to agree a formula with Britain for calculating the figure and sees that too as a precondition to moving to any talks about post-Brexit arrangements.

Without that, the EU has said the talks risk stalling and its chief Brexit negotiator Michel Barnier has already warned time is running out.

But British negotiators have said they will go “line by line” through the EU’s financial expectations and reiterate next week they see the EU’s sum as excessive.

“I would not want to get hopes up that we will see a breakthrough on this issue next week,” said a senior EU official involved in the talks.

“If you look at where we are and where we need to be, the gap is big. I say that in the next round it is unlikely we will make major progress in closing that gap.”

Some pieces of the puzzle should however start falling into place in more talks next month, sources said. This could include a political agreement on the future border between Britain and EU state Ireland.

Technical arrangements around the border would only come in the second phase of talks, as they would largely depend on the nature of future bilateral relationship, including customs arrangements.

A senior EU official warned Britain not to use the North Irish peace process as a bargaining chip, adding that the British government papers showed a lot of “magical thinking” about how the border could function in future.

While opening “phase two” talks had initially been expected in October, Barnier has already signaled this is now less likely to happen. London has said it was still confident the EU would move towards discussing future relations by October. ($1 = 0.8470 euros)

(Additional reporting by Philip Blenkinsop, Julia Fioretti, Robert-Jan Bartunek, Writing by Gabriela Baczynska, Editing by John Stonestreet)

UK banks behind schedule in post-Brexit preparations: ECB

Sabine Lautenschlaeger attends at a news conference at the ECB in Frankfurt October 26, 2014. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) – British-based banks seeking to relocate to the European Union before Britain leaves the bloc are behind schedule in their preparations for the move, a European Central Bank supervisor said on Wednesday.

International banks based in London risk losing access to the EU’s single market once Britain leaves it in 2019, forcing many to consider moving parts of their businesses to the bloc and seek a license from the ECB, the sector’s watchdog.

But Sabine Lautenschlaeger, who represents the ECB’s supervisory arm on the central bank’s board, said progress had been slower than hoped.

“Frankly, the banks are not as far advanced as we would like them to be,” Lautenschlaeger said in a newsletter article.

“Of the banks that have indicated an interest in relocating operations to the euro area, a number of the larger banks have made progress in their planning. But we have not seen many final decisions yet.”

She added the ECB would not grant licenses to “empty shells” and would take a tough stance on “back-to-back transactions”, where a bank would conduct trades out of its EU base but process and risk manage them at its London office.

“While we do not rule out this practice per se, ultimately we expect banks to manage relevant parts of their risks locally and independently,” Lautenschlaeger said.

Lautenschlaeger also said she expected banks moving to the EU to update their recovery plans, which kick in if they fail, “shortly” after moving.

(Reporting By Francesco Canepa; Editing by Angus MacSwan)

With 20 months until Brexit, UK orders year-long EU migration study

FILE PHOTO: UK Border control is seen in Terminal 2 at Heathrow Airport in London June 4, 2014. REUTERS/Neil Hall/File Photo

By William James

LONDON (Reuters) – Britain ordered a year-long study of EU migration on Thursday to help it design a post-Brexit immigration system that is due to come into force just six months after report is completed.

EU citizens’ freedom to live and work in Britain will end as soon as it leaves the bloc, scheduled for March 2019, but ministers have said they will design a system that allows businesses to hire the workers they need.

However, with Brexit negotiations already under way and the EU hoping to wrap up talks by October 2018, critics said the study should have been commissioned sooner and that uncertainty was already driving EU nationals out of the UK labor market.

Interior minister Amber Rudd asked the Migration Advisory Committee (MAC), a public body that advises the government, to look at how migration affects the labor market and the wider economy, and how the post-Brexit rules need to work to support the country’s plans for an industrial revival.

Concern about the long-term social and economic impact of immigration helped drive last year’s vote to leave the EU, and the government has a long-standing aim to bring net migration into Britain below 100,000. In 2016, net migration was 248,000.

“The public must have confidence in our ability to control immigration — in terms of type and volume — from within the EU,” Rudd wrote in an article for the Financial Times.

“That is why, once we have left the EU, this government will apply its own immigration rules and requirements that will meet the needs of UK businesses, but also of wider society.”

Ministers have so far said little about the kind of immigration system they want to replace the EU’s freedom of movement rules, leaving companies and workers in limbo and forcing some to make alternative plans

“The government needs to explain why this study wasn’t commissioned a year ago, directly after the referendum,” said lawmaker Ed Davey of the pro-EU Liberal Democrat party, citing lower numbers of EU nurses wanting to work in the health sector.

“Ministers must explain how their negotiations will minimize the damage Brexit will do to our economy and public services.”

A government statement said Rudd would stress in a letter to the MAC that “there will be an implementation period when the UK leaves the EU to ensure there is no ‘cliff edge’ for employers or EU nationals in the UK”.

Rudd said the government would “set out some initial thinking on options for the future immigration system” later this year.

Immigration minister Brandon Lewis said the MAC would make interim reports, and that its work was not the only source the government would use to design its new immigration system.

A wide range of companies have already expressed concern that they will not be able to hire the people they need to operate, from skilled financiers to unskilled farm workers. The effect could be to force them to relocate.

The government said the MAC, which is expected to report back in September 2018, will be asked to look at a range of issues:

– Existing patterns of EEA (European Economic Area) migration, including which sectors rely most on EU labor.

– The economic and social costs and benefits of EU migration to the British economy.

– The potential impact of a reduction in EU migration and the ways in which both business and the government could adjust to this change.

– The existing impact of immigration, from both EU and non-EU countries, on the competitiveness of British industry and skills and training.

– Whether there is any evidence that the availability of unskilled labor has led to low UK investment in certain sectors.

– If there are advantages to focusing migrant labor on high-skilled jobs

(Editing by Guy Faulconbridge and Louise Ireland)