The legal challenge to the process required to trigger Article 50 will continue in October.
The challenge seeks to provide constitutional clarity on the process required to exit the EU.
Following a preliminary hearing on 19 July 2016, a two-day judicial
review will be held in the High Court before the Lord Chief Justice on
Thursday 13 and Monday 17 October 2016 to clarify the constitutional
process necessary to trigger Article 50 and enable the UK to leave the
"This case is not an attempt to subvert the outcome of the referendum
or to keep Britain in the EU. It is about ensuring for the future of
this country that the legally correct process for leaving under the UK
constitution is followed. There is only one opportunity for this to be
carried out and it should be undertaken in accordance with our laws,”
Ms Miller's case argues that the Government cannot trigger Article 50 without an Act of Parliament.
Her legal team will argue that this is required by the rule of law
and the sovereignty of Parliament, the principles on which the UK's
constitution is based.
“If we do not have clarity over the correct legal way to trigger
Article 50, it could result in significant legal disputes and
uncertainty over the validity of the notification. My case argues that
the executive, i.e. Government, should be held to account by ensuring
full Parliamentary scrutiny - and a vote by both houses of Parliament on
the required Act – before Article 50 is triggered,” says Miller.
Article 50 of the Treaty on the European Union provides for a Member
State to give notice of its exit of the European Union "in accordance"
with the Member State's "own constitutional requirements".
This claim is to clarify what the UK's constitution requires before
notification can be given. The Government's position has been that the
Prime Minister can trigger Article 50 through the use of the Royal
Ms Miller will argue that the UK's constitution does not allow the
use of the Royal Prerogative powers in this case, because the act of
notification under Article 50 frustrates the rights of individuals and
others enacted by Parliament in the European Communities Act 1972.
The Royal Prerogative powers cannot be used by the Government to
remove or reduce rights granted by an Act of Parliament – the
sovereignty of Parliament requires that only Parliament can change its
The Court indicated in July that, given the constitutional importance
of the claim, any appeal will go straight to the Supreme Court and will
be decided before the end of this year. This will ensure legal
certainty prior to the Government's sending of the notice under its
UK PM Theresa May was speaking earlier today 2 Oct 2016
"We are going to be a fully independent,
sovereign country - a country that is no longer part of a political
union with supranational institutions that can override national
parliaments and courts.
"And that means we are going, once more,
to have the freedom to make our own decisions on a whole host of
different matters, from how we label our food to the way in which we
choose to control immigration."
Given the two year
expiry time of the Lisbon Treaty-based trigger that means the UK will
have left by the summer of 2019 and that is at least one uncertainty out
of the equation.
What May also confirmed though was that
immigration and UK sovereignty will be top of the negotiation agenda at
the expense of the single market. That in itself only intensifies the
overall uncertainty of how Brexit will pan out. She has denied that it's
"hard Brexit" per se as but the jury's very much out on that.
May told The Andrew Marr Show that the process of leaving the EU would be
"quite complex" but she hoped there would now be "preparatory work" with
the remaining EU members so that "once the trigger comes we will have a
smoother process of negotiation".
"It's not just
important for the UK, but important for Europe as a whole that we're
able to do this in the best possible way so we have the least disruption
for businesses, and when we leave the EU we have a smooth transition
from the EU."
The end-March deadline means that official negotiations will begin ahead of the French and German elections next year
the passive Remain campaigner becomes a pro-active Brexiteer. Politics
eh ? May's gloves are off now and she seems keen to get Brexit pushed
through before going to the country again in the next scheduled
General Election in 2020.
Expect the pound to open up
lower in Asia and remain ( no reverse pun intended!) on the back-foot as
I have been recommending for more than a while now.
Some of this
confirmation will have been factored in though as rumours have been
circulating for a while and with a market essentially short we can
expect to see some profit coming off the table. Keep selling those
rallies though as this play has a long way to run yet.
also promised a bill to remove the European Communities Act 1972 from
the statute book but the repeal of the 1972 Act will not take effect
until the UK leaves the EU under Article 50.
She said this was an "important step", adding:
"That means the UK will be an
independent sovereign nation, it will be making its own laws."
The first of the Brexit legal challenges heads to court on Thursday
from arguing with her European counterparts, PM Theresa May also faces
challenges over Brexit from inside the UK. The first of those goes up in
front of judges on Thursday. The next is due Monday 17th Oct.
not certain how much publicity will be allowed and there's rumours that
the press May be banned from the first hearing but there's nothing
confirmed and I can't see how they will be anyway.
Three day judicial review of Brexit case begins today
The wheels of UK law go into motion today (not that they ever stop of course, except for elevenses).
The first case to be heard is from Ms Gina Miller of London investment fund group SCM.
case is challenging what's known as the Royal Prerogative power that
Theresa May's government is looking to use to enact article 50. The
simple definition is that it's an age old law that the government wants
to use so it bypasses parliament. The claimant argues that the
government cannot lawfully use this to enact article 50;
review is to be held over three days, today then & 18th and we've
been reliably informed that it's doubtful that we'll get any comments
from the review today as they will be just going over the arguments.
It's highly likely that we may not hear anything until the hearing is
concluded next week.
The review does have the potential
to be market moving if it is decided that there's a case to proceed
with. At this point, this is just to see whether there's merits in the
claims. From there it's possible that it will go on to become something
that will require a full legal challenge.
The market's acceptance of a hard Brexit should see the pound remain under pressure
to Nomura, the market has gone through 5 stages of Brexit grief and has
now settled on a hard exit. Although the market may be accepting that
now, it doesn't mean the end of the drop in the pound.
rhetoric from ministers with "red lines" on immigration has
considerably lowered the possibility of a "Soft Brexit" in the market's
pricing and we have moved more towards the "Clean Break" or "Hard
Brexit" outcome. With the market's acceptance of this it has naturally
seen GBP suffer. But it is more than just that. It has changed the
dynamic we see between UK rates markets and FX that leads us to conclude
that we have not yet seen the bottom in GBP, with portfolio inflows
less likely to provide the necessary inflows to the UK to plug the
current account deficit"
these levels it is less attractive for some to enter fresh shorts, but
given the new market dynamic we continue to recommend selling GBP
initially to 1.20 and further and for EUR/GBP to break above 0.92."
were wary of a 3-4% squeeze before the flash crash but now say that the
decks might have been cleared so that any bounce might not be as big as
there is any rally it should be shortlived and will be used by the
market as an opportunity to sell at better levels unless of course it is
due to a complete reversal of position from politicians on the current
"Hard Brexit" stance."
There's no doubt that
the selling pressure remains and the shorts have the pound firmly by the
short and curlies. The short term charts are still developing and last
week's lows around 1.2080/1.2100 will be the first target for another
attempt at pushing the pound a whole lot lower.
As part of
Project Fear David Cameron threatened that he would trigger Article 50
immediately if there was a Brexit majority in the referendum. At the time this
was interpreted as a "Hard Brexit". Theresa May has gone for the "Soft Brexit"
which means that after 10 months of careful negotiation the UK will trigger
Article 50 by March 2017. There should be no further reference to "Hard Brexit"
as this is as soft as it gets.
are well into the discussion stage of leaving we still hear siren voices
telling us to reverse our decision and stay in the EU. Clutching at straws
there is a strong lobby saying that we cannot exit until it has been debated in
Parliament and voted for by our elected representatives. This is in spite of
the fact that the referendum was undertaken to tell our elected representatives
the will of the people. In one sense it should be a nod through for Parliament,
but a lot of people are concerned that if this decision is left to our elected
representatives then it will be overturned as every piece of weak news about
the UK economy is attributed to the decision made to Brexit and all but a few
politicians are likely to be led by their own self-interest.
politicians are blowing-off steam about how more evidence has now come to light
that Brexit will be bad for the UK economy and in the best interests of their
electorate they feel they must now vote against Brexit. A politician`s life is
short and full of risk and most of them will fall off the gravy train long
before their working life is over and it is nice for them to think there is
another lucrative gravy train to jump aboard and this incentivises many of them
to justify a volte face.
As well as
the politicians, the backroom bureaucrats are missing the point about leaving
the EU. I spoke to several top members of HM Customs and Excise who are off to
Luxembourg this week to unravel hundreds of pages of trade agreements before
they can restart the process of renegotiation. I asked them why we are not just
scrapping all trade agreements which interfere with price or quantity and why
we are not offering free trade across the world. Starting with a clean slate
will allow us to deal, case by case, with any problems that manifest themselves.
There was a stunned silence. This approach could apply equally to all EU
countries with whom we will continue to trade freely and if the EU does not
want to play the free trade game then they need to look at the cautionary tale
chocolate, cheese and wine myth.
Clegg has pointed out that the price of EU cheese, chocolate and wine will soar
if we go for a "Hard Brexit". I think we need to ask the consumer about this.
As there are many substitutes for EU cheese I can see a win/win for the UK
cheesemakers. Wines from around the world including England are as good if not
superior to EU wines and Swiss chocolate is my favourite. So what will actually
happen is that EU producers will be forced out of the UK market or they will
have to absorb the tariff. EU producers will in turn put pressure on the EU
policymakers to remove all tariffs as the only people who lose in this
situation are producers in EU countries.
falling value of sterling myth.
the noise about Brexit and it has been clear for some time that sterling is
destined to fall and continue falling in value. I explained this before Brexit
in my blog "Current account deficit on
the balance of payments is the most damming statistic". At present this
deficit is 7.6% of our GDP and the market will bring down the value of the
currency, as did the lowering of Bank Rate by the Bank of England, until our
export prices are sufficiently low and import prices sufficiently high to
rebalance our external account. Daily fluctuations are determined by rumour,
manipulation and misinterpretation of current statistics. However in the long
run it is the current balance deficit that points the currency in a downward direction
and the sooner it happens the quicker the problem is resolved. If fear pushed
the currency lower quicker after Brexit then we need to look upon this as good
Brexit induced rise in inflation myth.
said inflation is always and everywhere a monetary phenomenon. Inflation is more
units of a currency used in the same number of transactions. A falling pound,
rising import prices, higher food or oil prices only change relative prices.
For the average level of prices to rise there must have been a preceding growth
in monetary demand. The prices described above are only symptoms of the
inflation caused by the Bank of England`s monetary policy more than a year ago.
and the Stock Market boom myth.
have claimed the Stock Market boom as a success but, as much as I would like to,
the real advantages to economic growth of Brexit are sometime ahead. Asset
prices hitting a peak is just the inverse relationship between interest rates
and asset values. The Bank of England lowering interest rates has caused asset
prices to rise and it will be reversed when interest rates start to rise.
Brexit has had nothing to do with asset bubbles. They are the result of a misguided
Central Bank policy as I explained on my blog in "A reappraisal of interest rates and market interest rates"