The British Parliament has voted towards finding an alternative solution to the Irish Backstop which is currently holding back Theresa May’s Brexit Withdrawal Agreement. The vote, which took place on the 29th January 2019, was based on the amendments to the original agreement that was rejected by Members of Parliament earlier on in the month. The alternative solutions to the Irish backstop, which has been of main concern for the British Parliament and which was the leading factor for the failure of May’s initial deal, has yet to be altered.
The Parliament also voted to delay Brexit, motions that were put forward by Labour MP Yvette Cooper and Conservative MP Robert Buckland, however these were turned down. Whilst Theresa May was not in favour of postponing Brexit, the European Parliament was open to considering any requests, within reason, to extend Brexit. With European elections set for the month of May, a postponement of Brexit would mean that the UK has a right to contest the EU elections. Should anti-EU voters in the UK vote for anti-EU regulators, the results could affect the election of the new president of the European Commission. The European Parliament is reluctant that any postponement would go on further than July, as that is when the first European Parliament sitting would be held.
The Brexit Withdrawal Agreement: What’s Next?
In a last bid effort to prevent a no-deal Brexit, the leader of the Labour Party, Jeremy Corbyn has agreed to meet Theresa May to discuss possible solutions to generate an effective deal. Corbyn is fighting to stay in the customs union and to secure free trade within the EU. The customs union is not ideal however, as it would limit the UK from establishing independent trade deals. Should a no-deal Brexit scenario take place, the UK would automatically need to follow World Trade Organisation regulations overnight and adhere to new trading tariffs, as well as be subject to delays resulting from custom and border checks.
Commercial Trade within the Brexit Withdrawal Agreement
With just under 60 days to go until Brexit, there is still a lot of speculation as to what will happen next. With major industries based in the UK relying on having access to a Single European Market and EU passporting rights, concerns are at their highest surrounding whether a no-deal Brexit would negatively affect UK trade. As discussions regarding trade agreements have yet to provide any form of guarantee surrounding the Irish backstop, Corbyn proposed that Members of Parliament should be given time to discuss all possibilities to avoid a no-deal Brexit. This amendment, however, was also voted against.
This fight against a no-deal Brexit comes as a result of feelings of insecurity stemming from UK-based businesses who fear that small and medium firms could take a great blow. It is believed that Britain would no longer retain its title as a chief financial centre, and organisations have been looking at ways to safeguard free trade across the EU. According to Bloomberg, chief players in the banking industry will transfer €750 billion euros worth of assets into the EU to avoid the consequences of Brexit. Bank of America Corp is reported to be moving 400 members of staff to its European Offices. Meanwhile, Airbus has been the latest to announce the possibility of moving operations out of the UK. The aviation industry is determined to maintain transport connectivity whilst manufacturing plants are only too aware of issues surrounding higher production costs, delays and interrupted operations.
Alternative Solutions to May’s Brexit Withdrawal Agreement Deal
Despite the vote against no-deal Brexit, there is no confirmed deal set to guarantee this very vote. With the Irish backstop being the most hated part of May’s deal, should the terms of the backstop be amended, Brexit would be on schedule to leave on the 29th of March with a deal in hand and with the hard-fought support of the British Parliament. Whilst May plans to go to Brussels to renegotiate the terms of the Irish Backstop, the likeliness of this happening, however, is diminishing as the EU has been consistent in stating that it will not renegotiate the backstop. Sir Vince Cable, leader of the Liberal Democrats, believes that despite the vote for a no-deal Brexit, the Parliament is continuing to follow a path that will in fact lead to this very scenario.As the Brexit date draws closer and uncertainty still lingers heavy in the air, many organisations are looking towards EU jurisdictions as an alternative for UK operations. Companies, such as Robus and Compre, have found in Malta not only an EU member state with compliance to EU legislation, but a pro-business environment with flexible regulators and heavy investment in emerging industry sectors. Chetcuti Cauchi’s dedicated industry webinars are providing further information on what a hard Brexit would mean for UK-based business and how Malta can offer solutions surrounding corporate structures, intellectual property, tax and employee retention, amongst others. For more information on these webinars click here!
