17 Jan

ABCC Brexit Update – 17 January 2019 - May Survives Confidence Vote

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

Summary

  • With the backing of the Democratic Unionist Party and her own MP’s, PM May’s Government survived a vote of no-confidence in the House of Commons by 325 votes to 306.  The vote follows May’s failure to secure backing of her Brexit Deal.
  • With Parliament unable to reach consensus on a form of Brexit, PM May has now pledged to meet with other party leaders and senior parliamentarians to seek a way forward. 
  • In a televised address, May called on Parliament and the nation to come together and said she has already met with leaders from the Liberal Democrats, SNP and Plaid Cymru.
  • A meeting with Labour leader Jeremy Corbyn has yet to take place.  Before agreeing to meet, Corbyn called on May to rule out a “No Deal” Brexit before meeting.  Downing Street has already confirmed May would not.
  • Following cross-party meetings, May is expected to bring a “Plan B” to Parliament on Monday 21 January. 
  • May is then expected to travel to Brussels before a subsequent vote on in the House of Commons on a Withdrawal Agreement.
  • With only 72 days before the UK leaves the European Union and a host of legislation still yet to be passed through Parliament, many commentators are discussing the need to extend the Brexit deadline of 29 March.
  • Sterling has regained ground ending the day +0.14% on the USD.

May Survives Vote of No Confidence

Following her failure to secure backing in the House of Commons for her Brexit deal earlier this week, PM May survived a vote of no-confidence tabled by the opposition Labour Party.  With the backing of the Northern Irish Democratic Unionist Party (DUP) and her own MP’s, May survived the vote by 325 votes to 306.  Without the backing of the DUP, May would not have been able to survive the vote.

Whilst rejecting May’s Brexit Deal on Tuesday, Parliament still remains deeply divided amongst the following groups:  those advocating a Hard Brexit (with the UK outside the EU’s Single Market); a softer Brexit (along the lines of the Norwegian relationship with the EU); a General Election; a second referendum; and no Brexit at all. 

Immediately after the vote of confidence, PM May pledged to meet with other party leaders and senior parliamentarians to seek a way forward.  In a televised address, May called on Parliament and the nation to come together and said she has already met with leaders from the Liberal Democrats, SNP and Plaid Cymru.  A meeting with Labour leader Jeremy Corbyn has yet to take place.  Before agreeing to meet with May, Corbyn called on the Government to rule out a “No Deal” outcome, something which Downing Street immediately quashed.  Senior Brexiteer Conservatives have already warned Downing Street not to cross red lines in discussions with other parties.

What happens next?

Following cross-party talks, May is expected to return to the House of Commons on Monday 21 January with a “Plan B”.  Should some sort of consensus be reached, May would then travel to Brussels for discussions and negotiations with EU counterparts.  Should this be successful, May would return an amended deal to the House of Commons for a subsequent vote on a Withdrawal Agreement.  The timeline for such developments would be highly ambitious.

Is More Time Needed?

With 72 days remaining (of which 37 are parliamentary sitting days), the UK is due to leave the European Union on 29 March.  In addition to the negotiations that must still take place in Westminster and then in Brussels, a host of legislation must be passed through the House of Commons.  This includes bills on trade, agriculture, fisheries, healthcare, financial services and immigration.

Under such time constraints, commentators are now discussing the increasing likelihood of some form of an extension to the Brexit deadline.  Commentators note the possibility of a three-month “technical” extension to Article 50 – the EU’s secession clause.  Any longer extension would encounter difficulty as the next European Parliament elections are due to take place in May and the UK would be expected to field parliamentary candidates in the midst of Brexit.  

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.  Should you have any questions, please feel free to contact our office on abcc@britishchamber.com.

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