Delaying Brexit

Posted on March 18, 2019 · Posted in Derry Journal, Holywell Trust

It now looks as if Brexit will not happen on 29th March, as repeatedly promised.  Theresa May has reluctantly agreed that if her withdrawal agreement is not approved by the House of Commons in the middle of March, then MPs will be given two new votes.  The first, on 13th March, will be to allow the House of Commons to decide if it wishes to leave the EU without a deal.  If that motion is not passed, MPs will be given a vote to delay the exit.

 

Meanwhile, Jeremy Corbyn has announced that now that Labour’s preferred option of a Brexit which contains continued UK membership of a customs union with the EU has been rejected, it will put forward a resolution proposing a second referendum.  That referendum would give voters a choice between the deal negotiated by the prime minister and not leaving the EU.

 

While there is no certainty about how MPs will vote, it is likely that the House of Commons will reject Labour’s proposal for a second referendum; reject the option of leaving the EU without a deal; and agree to an extension of the leave date.  It now seems that Brexit may be delayed until June.  If it is extended beyond this, the UK would have to participate in the MEP elections, with a possible result of a wipe-out of the Conservative and Labour candidates and success for Nigel Farage’s new Brexit Party.

 

But there is no clarity about how the difficulties of the Irish backstop will be resolved.  The so-called Malthouse compromise was backed by the House of Commons, but is effectively being ignored by the government.  This supported the notion that in order to provide an agreed end date to the backstop, a technological solution should be found, which does not yet exist.  The underlying difficulty is that the backstop can be regarded as assuming a continued UK-EU customs union and single market relationship, which many Brexit proponents object to.  They want the freedom to negotiate new trade deals.  Nor do they want Northern Ireland to be operating within the customs union and single market, without being subject to any new trade deals.

 

Meanwhile, the impact of Brexit, and the lack of approval for a withdrawal agreement, is continuing to be felt by manufacturers.  The just published Annual Manufacturing Report found that 71% of UK manufacturers claim that Brexit is damaging strategic planning and business prospects, while 65% expect Brexit to “cause chaos” for the sector this year.

 

There are disputes as to the extent to which Brexit has affected recent decisions by large manufacturing businesses to relocated out of Britain.  Flybmi, which connected the City of Derry Airport with London Stansted, says that Brexit is a major factor in its collapse.

 

Flybmi pointed to its inability to win contracts with EU airlines because of uncertainty of its future access to EU airports; higher fuel costs, which in part are the result of the devaluation of sterling following the referendum result; and the cost of having to buy carbon credits because as a UK airline it will cease to have full participation in the EU’s Emissions Trading Scheme following Brexit.  But, it should be added, Flybmi was already a loss-making airline.

 

Another significant local Brexit impact is the question of future investment decisions by MJM, based in Newry.  It was MJM that won the bid to take over the Ballykelly airfield.  But MJM has warned that Brexit may persuade it to switch its future investment focus to Poland.

 

Several international banks have now moved part of their service centres and deposits out of London, with Dublin being one of the preferred new locations.  Bank of America is spending $400m to move $50bn of assets to Dublin, which will be the new base for an 800 person operation.  The bank is also creating a new 500 person operating base in Paris.

 

Anxieties continue about how Brexit affects the Good Friday Agreement.  Former Northern Ireland first minister David Trimble – who was one of the leaders to negotiate the GFA – is taking a legal case against the government, arguing that the withdrawal agreement in effect changes Northern Ireland’s legal status in relation to the rest of the UK and thereby breaches the Good Friday Agreement.

 

We hear on the latest Holywell Trust Brexit podcast arguments from those who say that Brexit negatively affects the rights of people born in Northern Ireland who have opted for Irish citizenship.

Emma de Souza explains how her legal action seeking the right of her husband to live in Northern Ireland – while also retaining her right to be an Irish citizen in Northern Ireland – indicates the type of problem that Brexit will make more common.  Anthony Soares of the Centre for Cross Border Studies considers the impact of Brexit on the Good Friday Agreement.  And former Foyle MP Mark Durkan reflects on the Westminster chaos.

 

The latest podcast can be heard at  https://soundcloud.com/holywelltrust/holywell-podcast-brexit-focus-episode-15/s-hmURS, while all previous editions can be listened to at https://soundcloud.com/holywelltrust.