Morning Briefing: Businesses voting with their feet - Japan trade won and lost - MPs holidays
Nearly a third of the companies represented by the Institute of Directors have moved business abroad to cope with Brexit, or are actively considering this option, a new survey shows. With time running out on negotiations and the final outcome still very much in the air, businesses are getting jumpy.
The greatest fear for businesses is the UK falling over an economic cliff edge if no deal is reached by March 29. The government’s failure to end uncertainty over that scenario - insisting no deal strengthens its negotiating position with the EU - is driving businesses from British shores.
But the prime minister’s proposed Brexit deal will do nothing to halt their flight either. It doesn’t offer frictionless trade for manufacturing or supply chains. It means regulatory checks to ensure that goods made in the UK adhere to EU standards with a huge increase in costs and bureaucracy. And it does nothing to protect most of our economy from a hard Brexit – including the fast-growing services sector on which our future prosperity depends.
This is hardly the first bit of bad news for business this week. Investment in UK car manufacturing halved last year, with output falling significantly and Jaguar Land Rover set to cut jobs. Sony is preparing to move its European HQ from London to Amsterdam. And emergency “trauma packs” are being stockpiled by pharmaceutical giant Johnson & Johnson amid concerns that border delays could disrupt supplies.
It’s no wonder then that businesses are voting on their feet and setting up shop on the continent. Now it is clear that all the options on the table are likely to damage our economy, it’s time that we asked the British people if Brexit is what they really want after all.
Quote of the Day
“While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad. For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in.”
Edwin Morgan, interim director general at the Institute of Directors
Video of the Day
WATCH: Leading Brexiters have said they could back a Brexit deal without the backstop - but they used to say that their concerns went further than just the backstop. Don’t let these MPs get away with it - write to your MP NOW.
If we must delay, best be ready
May’s Cabinet ministers are breaking ranks to admit that a delay to Brexit may be needed to break the parliamentary deadlock. Foreign secretary Jeremy Hunt told the BBC that the government “may need extra time” to pass legislation even if the deal is approved before March 29, while the Telegraph reports that nine ministers in total believe a delay will be required.
March 15 has been pencilled in as the deadline for the government to get its deal voted through Parliament. After this date, we’ll have to ask the EU for an extension. Given anarchy in Westminster, it seems likely that the bloc will want some tangible demonstration that progress would be made during any future extension period. Spending the next few weeks ruling out the “no chance” Brexit options - like the “Norway” model or Labour’s proposal - and setting the groundwork for a People’s Vote would be one way to do this.
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Japan trade deal won, and lost
The EU’s new trade deal with Japan has entered into force. After years spent negotiating thousands of pages of text, the UK will lose the benefits of this deal in a few weeks if we leave the bloc.
Liam Fox previously said the EU was in decline and that we need to leave to maximise growth opportunities. Since then the EU has negotiated two new major free trade deals and Liam Fox has negotiated none. More than that, he cannot even guarantee we will keep the trade deals we already have with over 65 countries as members of the EU.
Video of the Day 2
Recess cancelled, MPs holidays still on
With just a few weeks left to sort out a Brexit deal, Commons leader Andrea Leadsom has cancelled parliamentary recess. Sort of.
While one would assume - given the presence of a looming deadline - that the government would be planning to pass a flurry of preparatory legislation and to negotiate an agreed position with the Commons, it turns out that no government bills will be voted on next week. Moreover, Conservative whip Julian Smith has apparently told MPs that they aren’t obliged to attend if they’ve already booked their hols.
It’s nice to see they’re taking this national crisis seriously.
Tweet of the Day
OFOC Founder Will Dry sums up all that’s wrong with Theresa May’s plan to buy the votes of Labour MPs.
Plan to cancel Commons break branded a PR stunt (Independent)
Local councils told to 'step up' no-deal Brexit planning (Independent)
Top Brexit comment
Helen Stalford: Our children are being put at risk over Brexit - only a Final Say vote can protect their futures (Independent)
Polly Toynbee: The UK isn’t ready to Brexit. Instead it’s heading towards a no-deal tsunami (Guardian)
Today, Friday 1st February
|Parliament not sitting|