Brexit, UK elections, implications? - Nomura

In respect of the UK elections, analysts at Nomura explained that on the softer end of the spectrum Labour’s manifesto plans, when it comes to Brexit, have a softer tone to them than those of the Conservative Party.

Key Quotes:

"Mr Corbyn would scrap Mrs May’s White Paper and Great Repeal Bill, to be replaced with “fresh negotiating priorities that have a strong emphasis on retaining the benefits of the Single Market and the Customs Union” and an “EU Rights and Protections Bill”. There would be an immediate guarantee of the rights of EU nationals residing in the UK (with reciprocity expected) and Mr Corbyn – in contrast with Mrs May – describes “’no deal’ is the worst possible deal” in the manifesto."

"One way in which Labour is similar to the Conservatives relates to their willingness to support exporters and industry – which may not have been possible while subject to the EU’s state aid rules. Labour would aim to retain membership of various European cooperation projects such as Eutatom, Europol, Eurojust etc. In short, Labour’s stance sounds more cooperative, aiming at a Brexit towards the softer end of the scale. 

This may mean more concessions in negotiations with Europe, and it is worth noting that “retaining the benefits of the Single Market and the Customs Union” is consistent with various outturns – though Labour’s commentary on a “new system” of immigration “based on our economic needs” suggests that it is not compatible with continued membership of the Single Market/Customs Union “EEA-style”. 

As a final point on Brexit, increased tax rates on higher earners may reduce their desire to remain in the UK – with financial firms in the City of London potentially finding it easier to convince their staff to move overseas in the event financial passporting is not granted under a Brexit deal."