Registered users can save articles to their personal articles list. Login here or sign up here

Time runs short for May’s Brexit deal as business warns of pain

World watches as prime minister’s deal seems likely to be doomed.

UK politicians will resume debating Theresa May’s apparently doomed Brexit deal on Friday, with fresh warnings from business leaders and the Japanese premier over what’s at stake ringing in their ears.

On Friday, Japan’s Prime Minister Shinzo Abe said the whole world is watching Britain and wants to avoid a no-deal Brexit, while the CBI — a leading business lobby group — is stepping up its warnings of the impact of a chaotic split from the European Union.

According to The Guardian, CBI director general Carolyn Fairbairn will make a speech on Friday saying that a no-deal exit risks shrinking UK GDP by as much as 8%, and urging politicians to put jobs and the economy first.

The interventions seem unlikely to be enough to help May’s unpopular agreement pass Parliament when it’s put to a vote in the House of Commons on Tuesday. An analysis by the BBC on Thursday suggested May’s deal is on course to suffer the biggest government defeat in the history of the Commons in the vote on January 15.

A no-deal Brexit remains the default option if the Parliament doesn’t back May’s agreement on Jan. 15, even though a majority of lawmakers supported a motion on Tuesday designed to reduce the chances of Britain tumbling out of the bloc on 29 March. Such a scenario could trigger a recession with the pound falling by as much as 25%, official analysis suggests.

Following a day of meetings between May and Abe in London Thursday, the Japanese premier publicly backed the Brexit deal and offered his “deepest respect” for the work his British counterpart has done in securing an agreement with the European Union.

“We truly hope that a no-deal Brexit will be avoided and in fact, that is the whole wish of the whole world,” Abe said at a press conference in Downing Street.

“There is a good deal on the table and for those who want to avoid no deal, backing the deal is the thing to do,” May said at the press conference.

But May isn’t in full control of events. Parliament is flexing its muscle and Cabinet ministers are also starting to raise their head above the parapet. Business Secretary Greg Clark said a no-deal Brexit should be ruled out. “We need to act to avoid a no-deal because I don’t think there is anything remotely like a majority in Parliament that will tolerate this,” he told BBC radio on Thursday.

The debate on the deal in Parliament resumes on Friday, with Home Secretary Sajid Javid and Foreign Secretary Jeremy Hunt expected to lead the argument in favour of backing May’s package.

© 2019 Bloomberg L.P

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE





Follow us:

Search Articles:Advanced Search
Click a Company: