Brexit: May humiliated after vote2:47
Britain is heading for a no deal Brexit as Theresa May loses a vital vote.
After almost three years of uncertainty, the UK will have its last chance today to vote on Brexit and regardless of whether it’s approved — the British economy already looks to have suffered.
A new report has found more than 275 financial firms have moved or are moving their staff and about £925 billion ($AU1.7 trillion) in assets out of the UK.
The report from think tank New Financial provides one of the most detailed analysis on the impact of Brexit on financial services.
It found firms had already begun moving to European Union countries, with Dublin by far the biggest beneficiary. About 100 businesses are moving to the city or selecting it as their post-Brexit hub. This is followed by Luxembourg (60), Paris (41), Frankfurt (40) and Amsterdam (32).
Some of these cities have become favoured by certain industries.
Among those surveyed, nearly half of all asset managers, hedge funds and private equity firms chose Dublin as their new base; while almost 90 per cent of firms headed to Frankfurt were banks or investment banks.
The report believes the numbers will get worse if Brext goes ahead and that the impact of the separation from the EU is “bigger than we expected”.
“We think the report understates the full picture,” New Financial states.
“Many firms will have quietly moved parts of their staff or business below the radar, others will have held off making a formal move — and we think plenty of other firms aren’t yet ready.”
The report comes as the EU and UK agreed on new measures to remove the biggest roadblock to Brexit.
During a press conference on Monday night (local time) EU president Jean-Claude Juncker confirmed extra legal assurances had been agreed but warned: “there will be no new negotiations”.
“It’s this deal or Brexit might not happen at all,” he said.
He urged British politicians to back the Brexit withdrawal bill after agreeing to the new legal guarantees with Prime Minister Theresa May.
“Let’s bring the UK’s withdrawal to an orderly end,” Mr Juncker said.
The parliament is due to vote on Ms May’s deal again on Tuesday and if it’s not supported, politicians will vote over the following two days on whether to leave the EU without an agreement — an idea likely to be rejected — or to ask the EU to delay Brexit beyond the scheduled March 29 departure date.
Ms May warned last week that any delay could mean “we may never leave the EU at all.”
Alan Wager, a Brexit expert in the UK at the think tank Changing Europe, said parliament this week could decisively rule out both Ms May’s deal and a no-deal departure.
That, in turn, would make such options as a new Brexit referendum or a “softer” withdrawal from the EU lot more likely, he said.
There could also be repercussions for Ms May, with some believing she won’t be able to hang on as Prime Minister if the vote fails.
Conservative MP Nicky Morgan told BBC that Ms May’s position will become “less and less tenable” if she suffers more defeats in parliament this week.
EUROPEAN UNION GRANTS MAY LAST-MINUTE CHANGES
On Monday Ms May secured “legally binding changes” to address some of the concerns about the original deal, in particular on the Northern Ireland backstop.
She hopes the changes will overcome concerns about the backstop, which is a mechanism to keep an open border between Northern Ireland and Ireland.
The backstop keeps the UK in a customs union with the EU until a permanent trading relationship is in place. This avoids the need for a hard border between Ireland, which is still part of the EU, and Northern Ireland, which is part of the UK.
However, British politicians have previously rejected the deal as some are worried the backstop could be used to bind the UK to EU regulations indefinitely.
In order to address these concerns Ms May announced the creation of three documents: a joint instrument, a joint statement and a unilateral declaration.
Ms May said having an insurance policy to ensure there was no hard border was “absolutely right” but it could not become a permanent arrangement or a template for a future relationship.
Ms May said the deal in January was not strong enough in making that clear.
“Legally binding changes were needed to set that right,” she said.
This includes a commitment that the EU could not act with the intention of applying the backstop indefinitely.
“If they do it can be challenged with arbitration and if they are found to be in breach, the UK can suspend the backstop,” Ms May said.
She said there was also a legal commitment that whatever replaces the backstop did not need to replicate it.
The last-minute agreement comes just 17 days before Britain is scheduled to leave the EU.
On news of the breakthrough, the sterling, which has see-sawed on Brexit headlines, jumped 0.8 per cent to $US1.3250 ($AU1.87) in Asian trade and rallied to its strongest against the euro since mid-2017.
But pro-Brexit MPs said they would read the fine print and wait for the judgment of Britain’s attorney general before deciding how to vote on Tuesday.
Britain’s main opposition Labour Party has already urged parliament to vote against the deal despite the last-minute changes.
“This evening’s agreement with the European Commission does not contain anything approaching the changes Theresa May promised parliament,” said Labour leader Jeremy Corbyn, adding: “That’s why MPs must reject this deal”.
Ahead of the press conference to announce the changes, de facto deputy, David Lidington, told the House of Commons Ms May had secured some concessions but was still negotiating with EU leaders in Strasbourg.
“This evening in Strasbourg the prime minister … (has) secured legally binding changes that strengthen and improve the withdrawal agreement and the political declaration,” he said.
He said this should be enough to persuade MPs to vote for the agreement on Tuesday, just 17 days before Britain is scheduled to leave the EU.
“Tomorrow there will be a fundamental choice — to vote for the improved deal or to plunge this country into a political crisis,” he said.
Lidington said two new documents would be put to MPs.
He said London and Brussels had agreed a “joint legally binding instrument” on the withdrawal text that governs Britain’s exit terms, and which includes a controversial “backstop” plan to keep open the border with Ireland.
This document “provides confirmation that the EU cannot try to trap the UK in the backstop indefinitely, and that doing so would be an explicit breach of the legally binding commitments that both sides have agreed”, he said.
The backstop would keep Britain in a customs union with the EU if and until another way — such as a new trade deal — could be found to avoid checks on the Irish border.
If the EU did breach its commitments to try to find an alternative to the backstop, Lidington said Britain could use this legal document “as the basis for a formal dispute through independent arbitration”, and ultimately get the backstop suspended.
The document also emphasises that both Britain and the EU want to find an alternative to the backstop by December 2020.
Finally, it would put assurances from European Commission chief Jean-Claude Juncker and European Council president Donald Tusk over the temporary nature of the backstop “onto a legally binding footing”, Lidington said.
A second document has also been agreed, supplementing the political declaration which sets out hopes for a UK-EU trade deal, to outline commitments from both sides on moving swiftly to this new relationship.
— with Reuters and AFP