Why now is the most crucial time for Brexit Britain

People pose with their dogs during the ‘Brexit Dogs Dinner’ protest outside the Houses of Parliament in London, Britain March 10, 2019. Photo: REUTERS/Henry Nicholls

There is less than three weeks to go until Britain is set to leave the European Union, but it is still highly unclear what a post-Brexit Britain will look like.

This week is arguably one of the most crucial weeks in giving more concrete guidance over how the divorce deal between the UK and the remaining 27-nation bloc will proceed and therefore determine the course of Brexit.

On Tuesday (12 March), UK parliament will vote on whether to accept May’s Brexit deal or not. Remember, in November last year, the EU approved May’s Brexit deal but her agreement with the bloc was unceremoniously rejected by members of her own party, as well as the opposition.

If, as expected, politicians again reject May’s deal, members of parliament (MPs) will have to vote again on 13 March on whether to delay Brexit.

Delaying Brexit would mean extending Article 50 — the notification that Britain will leave the EU. If that extension is approved, it means that Britain will have more time to negotiate with the EU, even though there has been very little movement between the UK and the bloc since the initial deal was agreed in November last year.

The National Institute of Economic and Social Research (NIESR) said in its report, The Economic Effects of the Government’s proposed Brexit Deal, that her agreement with the bloc will leave the UK £100bn ($128.3bn) worse off by 2030. The report highlights included:

• GDP would contract by 3.9%

• Tax revenue would fall £18-23bn ($23-29bn)

• Foreign direct investment (FDI) would fall by 21%

• UK/EU total trade would fall by 46%

• GDP per head would fall by 3%, worth around £1,000 per annum

This led to a vote of no-confidence in her leadership by her own Conservative party as well as a vote of no-confidence by parliament. While she won both votes, parliament voted that she return to the negotiation table with the EU.

The EU’s chief Brexit negotiator Michel Barnier also said at the time that the bloc stood by the agreement. But as recently as 4 March, Barnier said that it’s looking more likely that Britain will delay Brexit so it has more time to talk.

More crucial meetings, speeches, and talks

Meanwhile, as Mike van Dulken, head of research at Accendo Markets pointed out “Tuesday’s vote could dictate what Chancellor [Philip] Hammond can announce in Wednesday’s UK Spring Budget [technically the Spring Statement], where he can boast favourable public finances. Will he be able to splash the cash or will he have to maintain a Brexit war chest?”

Elsewhere today, the Bank of England’s (BoE) Jonathan Haskel will speak at the University of Birmingham at 1pm local time while there is the Eurogroup meeting of eurozone finance ministers where Brexit is expected to dominate discussions.

Tomorrow, an Economic and Financial Affairs Council (ECOFIN) meeting of all EU finance ministers will take place.

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