NFDA BREXIT UPDATE

A dramatic week in the House of Commons saw MPs vote on several crucial Brexit related motions at this late stage in the Article 50 process.

Monday

The week began with PM Theresa May’s late-night dash to Strasbourg to meet senior EU figures, including EU Commission President Jean-Claude Juncker. She came back to Parliament with further legal assurances regarding the controversial backstop, in the form of a ‘joint instrument’, designed to reassure MPs that Britain would not be bound to the backstop indefinitely.

Tuesday

May asked MPs to vote on the updated backstop arrangement the following day. However, her attempts to reassure MPs were scuppered by the Attorney General’s legal advice – he claimed that despite the further assurances, the legal risk of Britain being trapped in the backstop remained “unchanged”. The deal received a thumping defeat by MPs that evening.

Wednesday

Following the defeat, the Government followed through on its promise to give MPs the chance to decide whether to go forward with a ‘no deal’ exit, or to continue searching for a workable withdrawal agreement. Subject to amendments, MPs instructed the Government to rule out the possibility of leaving without a deal. Whilst this does not change the legal possibility of a No Deal exit, it makes it a politically difficult route for the PM to take.

On Wednesday, the Government also published the tariffs good would incur in case of no deal. While parts will face no tariffs, imported cars will attract a 10% tariff. While the majority of small vans will also attract a 10% tariff, trucks will face a 22% tariff*.

Thursday

The week’s voting was concluded with Thursday’s vote to request an extension to the Article 50 negotiation period. An extension is subject to approval by the parliaments of the 27 other EU member states, who each have their own concerns about the terms of an extension.

Looking ahead

The PM will bring her deal back to Parliament to be voted on again next week, and has claimed that if it is passed, the extension will be short and technical, purely for the purposes of allowing time for ratification by other countries. However, the PM has warned that if the deal is rejected by MPs for a third time, an extension to Article 50 will be much longer to allow negotiations to continue.

* In the event of a no deal Brexit the UK would apply the below tariffs to imports into the UK from all countries where there is no free trade agreement (FTA). Currently, the UK does not have any FTA agreed in principle other than with some developing countries, Chile, Israel and Switzerland.