22 Jan

ABCC Brexit Update – 22 January 2019 - A week really is a long time in politics

By Paul O’Hagan, General Manager VIC, WA & SA, Australian British Chamber of Commerce

Summary

  • After failing to pass her Brexit Deal in the House of Commons and surviving a vote of no confidence last week, PM May returned to Parliament on 21 January with her 'Plan B' on Brexit.
  • With the exception of Labour leader Jeremy Corbyn, May met with leaders of the various parties in Westminster over the weekend.  Corbyn refused to meet with May unless she took 'No Deal' Brexit off the table.
  • Addressing the House of Commons on 21 January, May announced 'three key changes' to her Brexit policy: 
  • a pledge to seek concessions from Brussels on the Irish backstop.
  • a more 'consultative approach' to the next phase of negotiations, with MPs, business groups and unions involved; and
  • strengthened guarantees on environmental standards and workers' rights.
  • May’s announcement was met with disdain by opposition parties who claimed there was no significant change in her position and the pledge to seek concessions from Brussels was an attempt to placate her backbench Brexiteer MPs and the DUP.
  • MPs are expected to vote on a modified version of May's Brexit Deal on 29 January.  Backbench MPs will likely table amendments to the Deal, including attempts to rule out a ‘No Deal’ Brexit; extend Article 50 and hold a second referendum.  At the time of this update, The Telegraph reports that Corbyn has backed his party’s call to back the option of a second referendum.
  • May dismissed the idea of extending Article 50 past 29 March and warned of the consequences of a second referendum.
  • Separately, PM May announced the Government would axe a planned £65 fee for EU citizens to register for continued residency in the UK, post-Brexit.
  • 66 days remain before the UK is scheduled to leave the European Union on 29 March 2019.

A week really is a long time in politics

Prime Minister Theresa May returned to the House of Commons January 21 after yet another momentous week in British politics.  In the past seven days, not only did PM May suffer the largest defeat in modern parliamentary history by failing to pass her Brexit Deal, but also survived a vote of no-confidence tabled by Jeremy Corbyn, the opposition Labour leader. 

After surviving the confidence vote, May held cross-party talks with the leaders of the various parties in Westminster over the weekend.  Significantly, May did not meet with Corbyn, who had refused to meet with the Prime Minister unless she took ‘No Deal’ Brexit off the table.

Plan B?

Addressing the House of Commons on 21 January, May announced ‘three key changes’ to her Brexit policy:

  • a pledge to seek concessions from Brussels on the Irish backstop.
  • a more 'consultative approach' to the next phase of negotiations, with MPs, business groups and unions involved; and
  • strengthened guarantees on environmental standards and workers' rights.

May’s announcement was met with disdain by opposition parties who claimed there was no significant change in her position and that her strategy was to resurrect her existing Brexit Deal.  Given the toxicity of the Irish backstop issue, May’s ‘Plan B’ places an importance on the need to seek concessions from Brussels.  Opponents claim this is an attempt to placate her backbench Brexiteer MPs and the DUP.  However, many commentators believe that May has a greater chance of passing the Deal through Parliament with the backing of her own MPs and the DUP rather than seeking a different deal, possibly with a much closer relationship with the EU, with the support of Labour. 

What happens next?

MPs are expected to vote on a modified version of May’s Brexit Deal – or ‘Plan B’ – on 29 January.  In the meantime, backbench MPs are expected to table amendments to the Deal.  These amendments include attempts to rule out a ‘No Deal’ Brexit, extend Article 50 and hold a second referendum.  At the time of writing this update, The Telegraph reports that Labour Leader Jeremy Corbyn has backed the option of a second referendum despite his reported euroskeptic leanings.  For those who follow Westminster politics closely, there have been unprecedented manoeuvers by backbench MPs and the Speaker of the House in attempts to shape and amend the Government’s Brexit policy.

Speaking in the House of Commons on 21 January, PM May dismissed the idea of extending Article 50 past 29 March and warned of the consequences of a second referendum.  May claimed that a second vote would ‘damage social cohesion’ because it would ‘undermine faith in democracy.’ 

Separately, PM May announced the Government would axe a planned £65 fee for EU citizens to register for continued residency in the UK, post-Brexit.  The ‘nominal’ fee by the Government has proved to be contentious with many.

Upcoming Significant Dates

66 days remain before the UK is scheduled to leave the European Union on 29 March 2019.  If PM May is successful in both seeking concessions from Brussels and passing her ‘Plan B’ on 29 January, we can expect the following to occur:

29 January

Parliament expected to vote on ‘Plan B’. 

January – March

Ratification process in UK Parliament.  EU Parliament vote in March

29 March

UK to leave the EU – start of transition period

23-26 May

European Parliament Elections

April 2019 – December 2020

UK and EU negotiate a free trade deal and future relationship

December 2020

End of Transition Period

Given the lack of consensus in Parliament and the Nation so far, in addition to the difficulty and opposition we have already seen in the past weeks and months, it is impossible to predict what will happen next. 

Some of the most likely outcomes at this stage are:

  • PM May gets her Brexit Deal through Parliament and proceeds with the timeline above.
  • A Hard Brexit / No Deal Brexit after an inability to strike a Brexit Deal between the UK and EU;
  • A Soft Brexit with the UK staying closely aligned to the EU, likely within the EU’s Customs Union.
  • A Second Referendum with the possibility of a vote to Remain
  • A General Election

The ABCC and Brexit

The ABCC will continue to follow these developments closely in the coming weeks and months.  We look forward to keeping members up to date with the very latest from London and what it possibly means for the Australian-British business community.  

If you would like to receive more frequent Brexit updates or have any questions, please feel free to contact our office on abcc@britishchamber.com.

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