As MPs reject Brexit deal, will it now be no deal or no Brexit?
Theresa May has lost the second ‘meaningful vote’ on the Brexit deal she negotiated with the EU with a majority of 149 MPs voting against her plan. She has now said that MPs will vote on Wednesday whether Britain should go for a no-deal Brexit. It will be a “free vote” with MPs able to vote with their own conscience rather than following a specific party line and analysts have previously said that no majority exists in the House of Commons in support of a no-deal exit from the EU.
If the no-deal option is rejected, then Thursday will see a vote on extending Article 50 (by which the UK would leave the EU on March 29). Labour leader Jeremy Corbyn said that with the government’s deal clearly dead (a view Mrs May seems to agree with) “MPs must come together with a new Brexit proposal.”
What that proposal might be is open to question with the Prime Minister seeming to suggest that the House could revoke Article 50 or have a second referendum, as well as delaying Article 50 to give more time for talks with he EU.
Business meanwhile stays in the limbo is has been in since late June 2016 while UK consumers will be even less likely to splash out on spring fashion given the uncertainty around the economy, their jobs, prices and product availability in the next few months.
The pound had reached a 22-month high against the euro ahead of the vote but then fell as it became clear the government would be defeated so the only bright spot for retailers in tourist hot spots is that high-spending visitors taking advantage of the weak currency to shop ’til they drop won’t be changing their travel plans. The pound fell from €1.17 to €1.15 against the euro on Tuesday afternoon and fell two cents against the dollar to $1.30.
But was there any other good news in the vote result? With the fashion and retail sectors overwhelmingly backing the Remain camp, there will be some hope that the vote against the negotiated deal could see off Brexit altogether. As mentioned, it's believed that a majority of MPs wouldn't support a no-deal exit, although in the volatile environment of today, there’s no certainty about that prospect, despite the government having used it as a threat to try to bring Brexit-supporting MPs into line behind its deal.
The industry will be hoping against hope that no-deal is a non-starter with a report from luxury body Walpole earlier this week suggesting that up to 20% of British luxury exports, adding up to £6.8 billion worth of goods, could be at risk in the event of a so-called hard Brexit.
What happens is all down to what MPs decide this week and Europe has effectively said the ball is in their court. A spokesman for European Council president Donald Tusk said the EU feels it can do nothing more to move the issue forwards. “We regret the outcome of the vote,” he said. ‘We have done all that is possible to reach an agreement. If there is a solution to the current impasse, it can only be found in London.”
Meanwhile EU negotiator Michel Barnier said that the EU’s no-deal preparations “are now more important than ever” and despite that general belief is that MPs won’t let a no-deal scenario happen, many UK businesses must be feeling that way too.
But are they ready? Only last week, John Lewis insisted it was when it delivered it full-year results. But John Lewis is a model of a well organised business in control of its own destiny compared to some of its peers. With the devastation on the UK high street at present, there will be many businesses still under-prepared.
And many of the small brands and designers Fashion Network spoke to in recent weeks at events like Pure London and London Fashion Week’s Designer Showrooms were taking a wait-and-see approach. That could mean an enormous shock to their systems if a no-deal exit really does become the way forward.
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