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Friday's Business and Politics round-up

15 Mar 2019

Person reading the IoD's news round up with breakfast

Good morning…

 … and breathe. What a week it has been – the Prime Minister’s Brexit deal was defeated in the House of Commons for the second time on Tuesday, MPs rejected a no-deal Brexit scenario on Wednesday and voted in favour of the Government asking the EU for an extension to Article 50 yesterday.
 
‘So, what next?’, I’m sure many of you will be thinking. Well, the votes to reject no-deal and request an extension are not technically binding and it remains written into law that the UK is leaving the EU on 29 March. Theresa May will bring back her deal for a vote to the House of Commons before Wednesday next week… for the third time, and has pledged to seek an extension from the EU at the EU Summit next Thursday.
 
Have a restful weekend, before we do it all again next week!

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??? days until Brexit

Members of Parliament voted in favour of the Government seeking an extension to the Brexit process last night by 413 to 202 votes. This means that Brexit date could be delayed to 30 June if Parliament backs Prime Minister Theresa May’s deal in a vote next week. Mrs May said that if the deal is rejected, she would seek a longer extension, which would require the UK to take part in the European Parliament elections in May.
 
Third time lucky? The Prime Minister’s strategy is to get her deal through the House of Commons next week with hopes that Brexiteer MPs will get behind it, fearing a long extension to the Brexit date which could potentially mean the UK not leaving until after 2020 or no Brexit at all.
 
The Government has also confirmed that if Mrs May’s deal does not pass next week, other Brexit options would be tested in Parliament after the EU Summit, likely including the option of a permanent customs union with the EU and single market membership – a “softer” Brexit as they say.
 
Meanwhile, any extension to Article 50 will have to be approved by individual EU member states, whose opinions on how long the extension should be and what conditions should be applied differ. European Council President Donald Tusk has expressed support for a long extension that would allow the UK to “rethink” its approach to leaving the EU. Mr Tusk will reportedly consult with EU leaders ahead of next week’s EU summit.
 
Responding to the vote, IoD’s Interim Director General Edwin Morgan pointed out that we still know only a “tiny, tiny amount more about the next steps than we did a couple of days ago, but the problem is that the clock is ticking and no deal is still the default”.
 
MPs also voted against the amendment calling for a second EU referendum by 334 to 85 votes. It is fair to say that Mrs May ended the week on a high, with a rare night of success in the House of Commons last night. Next week could prove to be even more crucial.

Olive branch

China has passed a new foreign investment law, which is thought to be a move to help facilitate trade talks with the US. Tensions over trade between the two world powers have been intensifying over the past year, resulting in tariffs on $360 billion worth of goods for businesses.
 
The new legislation is designed to address long-running grievances from overseas businesses. It will eliminate the requirement for foreign companies to transfer proprietary technology to Chinese joint-venture partners and protect businesses from “illegal government interference”. In addition, it will also mean that foreign investors will have the same privileges as Chinese firms in most sectors. The law will come into effect on 1 January 2020.
 
However, the US and European chambers of commerce have commented that they were not given enough time to offer their input and that has caused concerns. The law, which was passed with an overwhelming majority of 2,929 in favour in the National People’s Congress, was finalised at an exceptionally speedy rate – the first draft was debated just three months ago.  
 
US President Donald Trump commented earlier this week that he hopes negotiations with China will wrap up within four weeks. “We are getting what we have to get,” he added.

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