Prime Minister May visits Brussels to delay the UK’s withdrawal from the European Union (EU) until no later than 30th June 2019 following two historic House of Commons defeats for her Brexit plan, where she lost by 230 votes in January 2019 and 149 votes in March 2019. At the time of writing, May intended to seek approval in a third vote.
Here Dr Emma Black, MD of Cascade Cash, rounds up thoughts of the impact on the UK’s economy.
The UK voted to leave the EU in June 2016 and there has been much disagreement since then amongst politicians over what the future relationship between the UK and the EU should look like. Some feel that a closer relationship similar to that of Norway or Finland would be appropriate to support ongoing trade relations while others are seeking a hard Brexit for hard borders to control immigration.
May’s deal has been particularly controversial due to the inclusion of a backstop provision, included to ensure that no hard border is erected between Northern Ireland and the Republic of Ireland, even in the scenario that the UK and EU can’t reach agreement on trade and security arrangements. The implications of this however are that if no agreement is reached, Northern Ireland could remain in the customs union and the single market, potentially creating a difference with the rest of the UK. While this is something that May has argued will apply to the whole of the UK together, there has been further upset over how long the backstop can apply. Some have been concerned that no agreement could ever be reached so as to ensure an ongoing relationship between the UK and the EU.
A recent study from Germany’s Bertelsmann Foundation has estimated that the UK will suffer income losses of €57 billion annually in the event of a No Deal Brexit while the rest of the EU will lost €22 billion annually, with nearly half expected to be borne by Europe’s largest economy, Germany.
Prime Minister May attacked the House of Commons in a speech where she said that MPs need to “recognise that Brexit is the decision of the British people” but she now faces a tough challenge in convincing the EU to agree to the preferred three-month delay in a scenario when her deal remains unpopular.
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