Brexit Update – 10th February 2017

By February 14, 2017May 8th, 2017Brexit Updates

 Top 3 developments

Bill-ding momentum The Bill which will give Government the power to trigger Article 50 has now safely passed through the Commons without amendment. The Bill will now move to the Lords, where Government will be hoping for a similarly smooth passage.

Clinging on for dear Clive Another month, another Labour reshuffle. Following the Brexit vote in Parliament which forced 15 of Corbyn’s Ministerial team to stand down, the Labour leader has carried out another reshuffle. Clive Lewis, the former Shadow Business Secretary, was Corbyn’s most high profile loss, and rumours are now abound that Lewis may challenge for the leadership.

You are my City my only City The financial services were given a boost this week due to comments from German Finance Minister Wolfang Schauble and a visit from EU Commissioner Valdis Dombrovskis. Both said they were confident a reasonable deal could be made that would be in both the UK and EU interest and favoured London retaining its position as a substantial financial centre.

UK Update

Brexit Bill Marches forward

Theresa May’s March timetable for the triggering of Article 50 is still very much intact after MPs voted this week to clear the Brexit Bill unamended. MPs again gave their overwhelming backing to the Prime Minister to start withdrawal talks on her terms – by 494 votes to 122 – on the final Commons reading of the historic legislation.

During the debate MPs threw out an attempted amendment to immediately ‘protect the residence rights’ of three million EU citizens in the UK. Some Tory MPs had threatened a rebellion, urging the Prime Minister to act without waiting for other EU countries to protect the rights of 1.2 million British citizens in the EU. But the revolt was quashed after Home Secretary Amber Rudd insisted the decision would be in MPs’ hands and that ‘nothing would change’ without their consent.

The Bill will now move to the Lords where it could face a somewhat bumpier ride. Whilst the Lords are unlikely to go against the will of the Commons or the public, Lords scrutiny offers the chance for amendment. The main opposition leader, Baroness Smith, has made it plain on several occasions that Labour’s modus operandi is to ‘hold to account, not hold to ransom’ when it comes to the Bill, and that they have no intention of trying to block it. The Lib Dems, however, have pledged to use the lack of a Government majority as a means to hold up the Bill and extract concessions, however, without Labour’s help there is a limit on the trouble they can cause.

Wanted Dead or A-Clive

Following the drama of last week’s vote and the subsequent mockery of Diane Abbott’s migraine, Third Reading of the Brexit Bill prompted further difficulties for Labour as Clive Lewis resigned as Shadow Business Secretary. Lewis has been the most senior of Labour’s Brexit resignations but, despite rumours (now denied) that the Labour leader is considering stepping down, Corbyn has stated that the resignation was not a ‘disaster’. In total, 14 of the Labour frontbench rebelled against the Leadership’s order to back the Brexit Bill, including three whips.

The resignation prompted yet another Labour Shadow Cabinet reshuffle, with a swathe of relatively unknown figures appointed. Most notably, Rebecca Long-Bailey has been promoted to Shadow Business Secretary.

The latest developments in Labour’s Brexit turmoil highlight the remarkable turnaround in the fortunes for the two major parties over the EU. Despite recent decades featuring profound Tory splits on the issue, remarkably it is now Labour who are most deeply divided on the issue.

Speaker’s coroner?

Following the Speaker’s comments that Donald Trump would not be welcome to speak at the House of Commons, due to his ‘sexism’ and ‘racism’ Conservative MPs have tabled a vote of no confidence against John Bercow. Whilst such a vote is unlikely to succeed, given his support from Labour and the SNP and the instability it would cause, the Speaker’s comment have caused significant annoyance throughout the House. Lords Speaker, Norman Fowler, issued his own statement on Tuesday, making clear he had not been consulted on the decision or its timing.

Leak reveals low-priority sectors

A leak has revealed that the Government has divided British industries into high, medium, and low priority in the Brexit negotiations. According to the document the high priority industries include pharmaceuticals, carmaking, textiles and clothing, aerospace, and air transport. Whilst the medium-priority industries include electronics, fisheries, chemicals and furniture, and low priorities include steel, construction, oil and gas, telecoms, environmental services, water and medical.

The document has sparked concern that some marked out as ‘low’ priority will not get the help they believe is necessary following Brexit and has caused major upset amongst the business community.

European Update

Brex and the City

German Minister for Finance, Wolfang Schauble, gave hope to the City this week when he highlighted the importance of London’s financial services industry and stressed that the EU did not want to punish the UK during Brexit negotiations. Talking to a newspaper on Sunday, Schauble stated that London’s financial centre serves the whole European economy, adding that London offers a quality of financial services ‘not to be found on the continent’.

The financial centre received further reassurance from EU Commissioner Valdis Dombrovskis, who is in charge of financial services and has been on a visit to London this week. Meeting with both representatives from the City and the Chancellor Dombrovskis backed London to retain its status as a ‘substantial financial centre’ beyond Brexit, stressing that the EU wanted a future deal on financial services that ‘works for all’.

Schulz emerges as German frontrunner

Two weeks ago, the bid by former president of the European Parliament, Martin Schulz, for Germany’s leadership was caricatured throughout German press. News on Monday that the Schulz’s SPD had polled ahead of Merkel’s Christian Democrats for the first time in more than a decade thus sent shockwaves through Berlin. Whilst it is still early days, and thus these results should be treated with caution, Schulz offers a viable alternative after 12 years of CDU. Many commentators have highlighted that the fact Schulz is only relatively known in Germany may turn out to be his best attribute, as German’s look for a fresh face untainted by political compromises.



20th Feb Brexit Bill First Reading in the House of Lords

7th March Brexit Bill to receive Royal Assent

9th March Possible date that UK Government triggers Article 50

9th / 10th March European Council meeting