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Maneuvering In House Of Commons Ahead Of Tomorrow's Brexit Votes

Maneuvering In House Of Commons Ahead Of Tomorrow's Brexit Votes

British Prime Minister Theresa May has told Conservative Members of Parliament (MPs) to vote for an amendment to the Government's Brexit agreement that would remove the Irish Backstop altogether, following a meeting of the parliamentary party today.

The move came after the deputy European Union (EU) negotiator Sabine Weyand, considered to be one of the key creators of the Brexit deal, warned that the risk of Britain crashing out of the EU without a deal was now "very high."

In addition, a group of leading retailers, including supermarkets such as Asda, Marks & Spencer and Sainsbury's and fast food outlets such as KFC and McDonald's, have warned of the dangers that a "no deal Brexit" would bring in terms of the supply chain and costs of food.

The amendment to the Government's Brexit bill that would call for the removal of the Irish Backstop was put forward by the influential 1922 Committee of the Conservative Party, which is led by Sir Graham Brady. It would replace the Irish Backstop with "alternative arrangements to avoid a hard border."

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The Brady amendment is expected to gain the support of Brexit-supporting MPs and the Democratic Unionist Party (DUP), the Northern Irish party that is keeping Prime Minister May's minority government in power. However, the EU has already made it abundantly clear that substantial changes to the Brexit deal would not be allowed.

A total of 15 amendments will be tabled tomorrow, but it is uncertain how many will be debated. Ordinarily 90 minutes would be allowed for a single amendment, but it is expected that the Government will allow extra time for the debates, so more than one will be chosen by the Speaker of the House. At press time it is unclear how many amendments will be allowed.

Most of the amendments either look to amend the Irish Backstop or seek to extend the Article 50 time-limit, which would prolong the negotiating period beyond the 29 March deadline. If passed, the EU would need to agree with these amendments. Negotiators for the EU have said that any such extension would need to be accompanied with a plan to achieve a deal, such as a referendum on the Brexit vote.

Labour Party member Yvette Cooper has tabled a motion that would prevent Britain from withdrawing from the EU without a deal. It would also require May to extend the negotiating period to 31 December, if MPs have not approved May's deal by 26 February.

Cooper's frontbench colleagues in the Labour Party have also tabled an amendment that calls for the negotiation of a permanent customs union. If this amendment is selected by the Speaker the debate would also include a series of amendments tabled by a variety of MPs that call for a public vote on the withdrawal deal.

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Meanwhile, a letter from the British Retail Consortium (BRC) sent to MPs warned of the consequences of a no deal exit from the EU.

The BRC wrote, "While we have been working closely with our suppliers on contingency plans, it is not possible to mitigate all the risks to our supply chains and we fear significant disruption in the short-term as a result if there is no Brexit deal."

The letter went on to say that much of Britain's fresh food is sourced from the EU (up to 30 percent during various seasons). Any delays (in the supply chain) could cause produce to be lost through deterioration. The BRC also pointed out that stockpiling fresh food is not possible, but the complex supply chains for such items as lettuce, tomatoes and soft fruit would be seriously disrupted and could lead to shortages in the shops and rising food prices.

In addition, the BRC warned of the dangers of reverting to World Trade Organization (WTO) rules with a significant impact from tariffs.

"Only around 10 percent of our food imports, a fraction of the products we sell, is currently subject to tariffs so if the UK were to revert to WTO Most Favoured Nation status, as currently envisaged in the no-deal scenario, it would greatly increase import costs, which could in turn put upward pressure on food prices. The UK could set import tariffs at zero but that would have a devastating impact on our own farmers, a key part of our supply chains."

The timing of the letter is also significant, coming on the day before voting and debates on the Government's Brexit deal amendments is due to take place.

Votes on the amendments tabled are expected to start at 7:00 p.m. British time on 29 January.

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Posted-In: Brexit Freight FreightwavesGovernment News Eurozone Markets General


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