5 down, 470 to go…
Two of the eight days of debate on the EU (Withdrawal) Bill took place this week, with the Tories and Labour imposing a three-line whip on their MPs. Despite suspicions they wouldn’t be able to muster the votes, the Government managed to defeat the five amendments debated. Notably, MPs supported the repeal of the 1972 Communities Act by 318 votes to 68 ,which will end the supremacy of EU laws in the UK.
Other amendments defeated mean the Government will be able to control the length of any transitional arrangement independent of parliamentary scrutiny. And, it’s worth noting MPs also voted down an SNP and Plaid Cymru backed-amendment that would have forced Theresa May to win the consent of the UK’s devolved administrations before repealing EU legislation. The Government also saw off amendments to requiring ministers to produce a report on how EU law will be applied during a transition period, and proposing the exit day must not be before the end of any transitional period agreed under Article 50.
Ministers might end the week quietly satisfied they’ve cleared the first hurdle to the Bill’s passage. But the coming weeks will pose a serious test for the Government.
If you wanted evidence of the acrimony over Brexit then you needed to look no further than the Daily Telegraph this week, which in a controversial article attached and named 15 MPs who have said they won’t back an amendment enshrining into law that the UK will leave the EU on March 29th 2019. The newspaper branded the 15 “mutineers.”
The article provoked a fierce backlash from Westminster, with Labour MP Chuka Umunna branding it “an ideological witch hunt” and Conservative MP Anna Soubry revealing the article has prompted a number of threats against her that she’s reported to the police.
Theresa May distanced herself from the comments, said that she was “listening” and defended the rights of MPs, but failed to attack the article outright, instead commenting, “There is, of course, a lively debate going on in this place and that’s right and proper.”
The article also served as a reminder of the challenge facing new Chief Whip Julian Smith, who’ll have an uphill battle to ensure the Government’s EU Withdrawal Bill can successfully make it through the current committee stage. With a wafer-thin majority only assured by the support of 10 DUP MPs, the loss of 15 Conservative votes could easily derail attempts to get the Bill passed. And that is before it even gets to the House of Lords where, according to former Cabinet Minister Sir Oliver Letwin, it would be “massacred” if it doesn’t change from its current form.
Brexit will only be semi-catastrophic
This week heavyweights of the automotive sector gave evidence to the Business, Energy and Industrial Strategy Select Committee. Cushioning how Aston Martin felt about Brexit, Mark Wilson (Chief Financial Officer) told the committee that a ‘no deal’ scenario would create “significant-costs” and be “semi-catastrophic” for the company, which only produces cars in the UK.
According to the Society of Motor Manufacturers and Traders, around 80% of the cars manufactured in the UK are exported, just under half of which go to the EU. Reverting to World Trade Organisation rules would mean large tariffs are likely to be put on cars exported. Add to this that 40% of the car parts used to manufacture vehicles are imported from the EU, which will also have tariffs imposed on them, and the Society anticipates the cost to the automotive industry could be enormous.
Honda warned that 15 minutes of customs delays at the border following Brexit would cost some manufacturers up to £850,000 a year. Honda said that, as it only stocks an hour’s worth of parts for its production line, it relies on 350 trucks a day arriving from Europe to keep its Swindon factory operating, making delays a significant challenge for their business model.
Until now, multinationals and large corporates have been timid about revealing their exposure to a hard Brexit without a trade deal, but with MPs struggling to force disclosure of impact assessments from Brexit ministers there is a growing demand from Parliament – primarily driven by select committees – for a greater understanding of the impact a no deal Brexit will have.
Putin and his trolls
It’s emerged that, in the final 48 hours of last year’s Brexit campaign, Russian based Twitter accounts posted more than 45,000 tweets in an attempt to push the UK towards a leave vote. According to The Times, more than 150,000 accounts based in Russia that had previously focused their posts on subjects such as the Ukrainian conflict switched attention to Brexit.
Many of the messages appear to have come ether from bots – fully automated accounts – or from “cyborg” accounts that are heavily encrypted but have some human involvement. Researchers from Edinburgh University suggest that a large number of the accounts came from a St Petersburg troll farm. The same farm is also alleged to have meddled in the US elections with a dedicated staff of 90 working to influence the campaign that elected President Trump.
The suggestion of Russian involvement and influence in a referendum that was won with narrow margins is only set to intensify the debate about how the Brexit campaign was fought, with mistruths laid on both sides and dramatic predictions of what a post Brexit UK would look like. The emergence of this information is only set to polarize that debate further, which is probably the aim of the trolls of St Petersburg anyway.
Netherlands fear the worst
The Dutch parliament’s European Affairs Committee has said that the Netherlands must prepare for a no-deal Brexit scenario. In a strongly worded report, the committee said, “What was long considered impossible is suddenly thinkable: a chaos scenario in which the UK abruptly leaves the EU on 29 March 2019 without an exit agreement, a transition period or a framework for future relations.” The report also said a chaotic UK departure from the bloc – as opposed to a hard, but planned Brexit – would be “highly damaging to…vital and vulnerable” business sectors in the Netherlands.
To avoid this, the report recommends negotiations are sped up or the two-year deadline extended – something only the European Parliament can do. Whilst this will be music to the UK Government’s ears that there is European pressure mounting to pursue trade talks, it will also concern the business community that European governments believe that a no-deal scenario is now a very real threat.
This was reiterated when the committee pointed to “deficit preparation” by the UK authorities and that the snap General Election and suggested “unrealistic Brexit expectations of British politicians” had taken a heavy toll on “the consistency and coherence of the British Government’s negotiating position.” What the committee would like to see to accelerate talks is the final divorce settlement paid. However, they point out one of the difficulties of this is that for a large part of the British population – and British politicians – “any divorce payment will be too much.” Which we knew in any case.
For more information about Brexit, please visit https://www.whitehouseconsulting.co.uk/project-brexit/