Alison Ryan, London Office, Bord Bia - Irish Food Board
21 days until Brexit
Key events this week:
The UK Attorney General, Geoffrey Cox, outlined that there were no breakthroughs in the search for a revised Brexit deal, following talks in Brussels on Tuesday. British senior officials admitted that the discussions had been difficult, while a leaked EU diplomatic note described them as “negative”. One of Cox’s proposals, which included a framework for the UK triggering independent arbitration, enabling them to exit from the backstop, was flatly rejected. Talks will continue and May is expected to travel to Brussels for direct talks with Jean-Claude Juncker over the weekend or on Monday. However, UK officials say that Monday is too late with the vote on the deal scheduled to take place on Tuesday.
On Wednesday the Chancellor, Phillip Hammond, warned Eurosceptic Conservatives that if they didn’t back the Brexit deal, they could end up with a softer form of Brexit. The Chief Whip, Julian Smith, earlier in the week told Cabinet that if the vote fails, there is a real threat that the House of Commons will seize the Brexit process.
On Wednesday, Jeremey Corbyn headed a “Common Market 2.0” meeting with Tory and Labour MPs who are supporters of a Norway style deal. This would see the UK joining the European Free Trade Association and the customs union following a two year transition period.
The head of Northern Ireland’s regional civil service, David Sterling, issued a letter to all political parties in Northern Ireland outlined the grave consequences that a no-deal Brexit would have on the region. The letter highlighted that a no-deal would result in a sharp increase in unemployment, a reduced choice of fresh food and the risk of social unrest. His assessment that a no-deal would have a “profound and lasting” economic and social impact on the communities in Northern Ireland will put pressure on the DUP to support Theresa May’s deal. Last week, the UK government said that the Northern Irish economy would risk losing 9.5% growth should there be a no-deal scenario.
The OECD warned this week that the UK economy would barely grow in 2019, even if Brexit goes smoothly, and will sink into a recession in a no-deal scenario. They forecasted growth of 0.8% in 2019 and 0.9% in 2020, down from their November forecast of 1.4% and 1.3% for the same period. The OECD outlined that the negative impact of a no-deal would spill over into other countries and create an adverse shock for Europe, with Ireland, the Netherlands and Denmark being worst affected.
Implications for Irish food & drink companies:
- It is still uncertain whether Theresa May’s deal will succeed or not next week. However, should May be able to persuade the DUP to support her deal, it could be the difference between losing by a significant number of votes and getting the deal through parliament.
- While a second referendum is still only a small possibility rather than a probability, if May’s deal doesn’t win support next week, the chances of a second referendum will increase.
- Theresa May is expected to give a speech on Friday urging MPs to support her deal.
- The vote on Theresa May’s Brexit deal will take place in the House of Commons on Tuesday March 12, along with a vote on Labour’s motion to back a second referendum. Depending on the outcome of the vote on Tuesday, there could be further votes on Wednesday March 13 and Thursday March 14, giving the house the option to block a no-deal Brexit and extend Article 50.