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Tuesday's Business and Politics round-up

19 Feb 2019

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Good morning,

Prime Minister Theresa May is hoping to reach some sort of compromise with EU negotiators on the Brexit withdrawal deal later this week, but it looks like it might not be the officials in Brussels that she needs to plead to. President of the European Commission Jean-Claude Juncker said yesterday that “When it comes to Brexit… we are in God’s hands. And we can never quite be sure when God will take the matter in hand”.

Mr Juncker added that the EU would not oppose a delay to the Brexit date, but it could not be longer than a few months to avoid the UK being involved in EU elections in May.

The Brits are in Brussels this week, with Brexit Secretary Stephen Barclay and Attorney-General Geoffrey Cox holding a round of talks with EU chief negotiator Michel Barnier last night. Mrs May will hold talks with Mr Juncker on Thursday.


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The gang of seven

Yesterday’s news were dominated by the resignation of seven Labour MPs, who have left the Labour Party and will sit in Parliament as the Independent Group. The MPs – Chuka Umunna, Luciana Berger, Chris Leslie, Angela Smith, Mike Gapes, Gavin Shuker and Ann Coffey – criticised Jeremy Corbyn’s approach to Brexit and anti-Semitism, as well as his wider ideological objectives. Ms Berger, Mr Umunna and Mr Leslie have all previously faced threats to be deselected from the party.

While the MPs are not setting up a new political party, Mr Umunna called their move “the first step” and urged other MPs to join them in “building new politics”. “It is time we dumped this country's old-fashioned politics and created an alternative that does justice to who we are today and gives this country a politics fit for the here and now - the 21st Century,” he said yesterday. The MPs will attempt to seize the centre ground of British politics. “What happens now will be determined by who comes forward and supports us… This really is it, guys,” said Mr Shuker. It is expected that the group will assign roles and responsibilities in the next few days.

Mr Corbyn responded by saying he was “disappointed” that the MPs could no longer be part of the Labour Party, while Shadow Chancellor John McDonnell said the MPs should stand down and fight by-elections, as this would be an “honourable thing for them to do”. Labour campaign group Momentum have accused the MPs of wanting to “take us back to the politics of the past” and the “Blair years programme of privatisation, tax cuts for the rich and deregulation of the banks”.

Mr Corbyn has also been warned by other Labour MPs that others would “think hard” about leaving if the party’s problem of anti-Semitism was not fixed. BBC also reports that a small number of Conservative MPs are thinking of joining the group in protest over the Government’s Brexit policy.

Driving home

Japanese carmaker Honda is set to announce the closure of its Swindon plant, putting 3,500 jobs at risk, in what would be another blow to the UK’s car industry. The company is expected to announce today that it will close the factory in 2022, moving operations to Japan.

Conservative MP for North Swindon, Justin Tomlinson, has insisted that the move is not related to Brexit, “Honda have been very clear: this decision has been made because of global trends and is not related to Brexit,” he said, adding that “the Turkey factory will also close as all European market production is being consolidated to Japan, where the company is based”.

The car industry has been hit by a shift away from diesel cars in Europe, while the recent trade deal between the EU and Japan, which will reduce tariffs on both sides’ car exports to zero, is also thought to have contributed to Honda's decision.

Honda will reportedly keep its European headquarters in Berkshire and its Formula One racing engines division in Milton Keynes.

The news comes just two weeks after Nissan, Honda’s Japanese rival, announced it would relocate the production of its sports vehicle from the UK to Japan. Ford has also recently warned that it would make further cuts at its two plants in the UK if there is a no-deal Brexit scenario.

Beef up

Environment Secretary Michael Gove is set to deliver a speech today, seeking to reassure British farmers that the Government will protect them in any Brexit scenario. Speaking at the National Farmers’ Union annual conference in Birmingham, Mr Gove is also expected to say that leaving the EU will not lead to lowering food standards in the UK.

The Government will use tariffs and quotas to ensure that British farmers are not left disadvantaged by Brexit. There have also been concerns that future post-Brexit trade deals could affect British farmers, for example if a deal is reached with the US, whose lower-cost producers could drive down prices and profits for the producers in the UK.

The Government is yet to announce the plans for tariffs if the UK leaves without a deal in place. There have been speculations that they might reduce tariffs on imports to zero in order to keep prices low for consumers, but farmers have said that such decision would leave them out of the market.

If the UK ends up reverting to the World Trade Organisation rules under a no-deal Brexit, food exports could face tariffs of 40 per cent or more.

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