Tag: Theresa May

  • Mass exodus if May allows no-deal Brexit?

    Mass exodus if May allows no-deal Brexit?

    3 min read

    Brexit deal, is it to be or not to be? 7
    More and more of British companies have already triggered emergency plans to manage with a no-deal Brexit. If the UK crashes out of the EU. Many of them will move operations abroad, claim the British Chambers of Commerce.

    It said that in recent days alone, it had been told that 35 firms had activated plans to move operations out of the UK, or were stockpiling goods to combat the worst effects of Brexit.

    It looks that many companies had acted to protect themselves since May’s Brexit deal was decisively rejected by MPs in the Commons earlier this month.

    The worst effects of a no-deal Brexit

    Actually, it has seen a sharp increase in companies taking actions to try and protect themselves from the worst effects of a no-deal Brexit. No deal has gone from being one of several possible scenarios to a firm date in the diary.

    Last week the Airbus, Europe’s largest aerospace manufacturer, which employs 14,000 people in the UK and supports another 110,000 through supply chains, warned of potentially disastrous effects of no deal on its UK activities.

    Tom Enders, the boss of Airbus, said: “Please don’t listen to the Brexiters’ madness, which asserts that because we have huge plants here we will not move and we will always be here. They are wrong.”

    UK exporters need access to the EU’s customs union

    Ever since the vote to leave the EU in 2016, business groups including the BCC and the Confederation of British Industry have lobbied ministers, arguing that UK exporters need access to the EU’s customs union. Because it allows goods to be imported tariff-free.

    The CEO of Airbus, the global leader in aviation, clearly warned that Brexit threatens to destroy the developmental life in the UK. He urged the British to “not listen to the madness of Brexit’s supporters,” who argue that Airbus will remain forever in the UK because there are huge factories in that country.

    Airbus has more than 14,000 employees in the UK. Another 110,000 people work in related activities.

    Britain should leave the EU on March 29th.

    The Dutch authorities have announced that they are in contact with more than 250 foreign companies planning to move to the Netherlands due to the UK leaving the European Union.

    “It is not so easy to move huge factories to other parts of the world, but the Airplane Industry is a long-term business. We will redirect investments quickly in case there is no agreement on Brexit with the European Union. Do not be misled, because a lot of countries are barely waiting to be opened factories of Airbus parts there”, said CEO of Airbus Tom Enders.

    But the prime minister May has insisted that the UK must leave both the customs union and EU single market. And that the referendum result of 2016 is to be fully respected.

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    Political debates about no-deal Brexit

    Labour MP Yvette Cooper has revealed to the Observer that two major employers in her West Yorkshire constituency had written to her. They are warning of the damaging effects of no deal on their UK operations. Burberry, the luxury goods manufacturer, employs 750 people in Castleford and Haribo, the confectioner, 700 across her constituency.

    Cooper is pushing for a Commons amendment that would pave the way for Brexit to be delayed until the end of this year. It looks that MPs may need to work longer and lose their February half-term break if Brexit is to be delivered on time.

    The extra hours will be needed to get its legislation onto the statute book before the planned 29 March exit.

    Theresa May will seek backing for her deal in another Commons vote on Tuesday.

    Commons leader Andrea Leadsom described bids by MPs to prevent a no deal as a “thinly veiled attempt to stop Brexit”.

    Writing in the Sunday Times, she said this would be an act of “constitutional self-harm”.

    The UK is due to leave the EU at 23:00 GMT on 29 March and the prime minister has faced repeated calls to rule out the prospect of leaving without a deal if no agreement can be reached.

    There is a grave concern about a bill, proposed by Labour MP Yvette Cooper. It could extend Article 50 – which triggers the UK’s withdrawal from the EU by nine months. That means the prime minister has to secure a deal by the end of February.

    The Queen does not show any political views but…

    The British Queen has called on citizens to find “common language” and respect “different points of view”.

    Commentators say the remarks are considered the debate about the Brexit, while deputies will have to vote again next week on an agreement to leave the European Union.

    BBC journalist who follows the royal family, Nicholas Bichel, believes that there is no doubt that the queen “sends a message”.
    The Queen, as head of state, remains neutral in political matters and usually does not express her views on the controversial issues.

    However, speaking at the event marking the 100th anniversary of the Sandringham Women’s Institute in Norfolk, the queen said: “The continued emphasis on patience, friendship, a strong community-focus and considering the needs of others are as important today as they were when the group was founded all those years ago.

    Of course, every generation faces fresh challenges and opportunities. As we look for new answers in the modern age, I for one prefer the tried and tested recipes, like speaking well of each other and respecting different points of view; coming together to seek out the common ground, and never losing sight of the bigger picture. To me, these approaches are timeless, and I commend them to everyone.”

    The queen’s call touched the same questions as her Christmas message, in which she invited people to treat others with respect, “even when there are deepest differences.”

    The Brexit rises tensions on the once-bloodiest border in Europe

    Thousands of people travel every day for over an hour and a half across the Irish Sea to the United Kingdom. This is not only an important commercial line but an important cultural connection for many in Northern Ireland, which now directly depends on the parliamentary majority Theresa May.

    The city Larne shows its loyalty to London. The roads through the nearby villages are painted in the colors of the crown. Local Unionists the Irish, angry opponents of Catholic Irish, have their MP, Sammy Wilson.

    “We have strong historical ties with the rest of the United Kingdom for hundreds of years. It’s a common faith, a common language, and we will not give up on that,” he said.

    Unionists, who support the government Theresa May, refuse to support her proposal for Brexit if their relationship with the rest of Britain become more difficult. And the prime minister has not given them a satisfactory proposal so far.

    The main concern of the Unionists is whether the peace agreement for Northern Ireland which has ended decades of bloodshed will be respected.

    May is facing the problem that Wilson is not ready for a compromise.

    Their interests would be satisfied if they would leave the EU without an agreement. Then, they could say that this item has been removed from the agenda.

    Wilson argues that the Union’s insistence on the status of the border is a violation of the terms of the peace agreement.

    “This would mean that our laws are written in Brussels, not London. In other words, we would be constitutionally separate from the rest of the United Kingdom, which is a breach of the Belfast agreement,” said Wilson.

    The MPs also proposed a number of amendments with alternative proposals, which include postponing the deadline for abandoning the EU on March 29, in order to avoid issuance prior to reaching an agreement.

    Many MPs fear that leaving the EU without a formal withdrawal agreement would cause chaos in ports and business disturbances, although some supporters of Brexit support this option, and believe that this view is excessive.

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    Another amendment concerns the escape and ensuring that the border between Northern Ireland and the Republic of Ireland will not be returned.

    Both the UK and the EU believe that restitution of border controls could jeopardize the peace process, but Brexit’s advocates are afraid that the safeguard mechanism could connect Britain with EU rules for an indefinite period without any declaration of them.

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  • Brexit deal, is it to be or not to be?

    Brexit deal, is it to be or not to be?

    4 min read

    Brexit deal, is it to be or not to be? 5
    Theresa May, the British PM, looks for a compromise with her political opponents that will deliver a Brexit deal. She is entering the most delicate and dangerous negotiations of the country’s split from the European Union.

    On Wednesday night, there was an attempt in Parliament of opposition to oust her government in a vote of no-confidence 24 hours after her agreement with the EU was emphatically rejected by the historical margin for any sitting government of 230 votes.

    But May survived and opened talks in an effort to break the deadlock. Now she must return to Parliament to set out her Plan B by Monday.

    Point is that the UK has just 10 weeks left before the departure deadline.

    According to Bloomberg, “May is prepared to blur her red lines to find a plan that will get through Parliament, according to a person familiar with the matter. That could mean keeping close ties to the EU, an outcome backed by opposition parties.”

    On the other side, the European Union demand she radically rethinks the UK’s red lines. The bloc signaled its willingness to delay Britain’s withdrawal for a longer time.

    That means, the EU had been preparing to make limited concessions over the much-loathed Irish border backstop to help May convince Parliament to back her deal.

    But the after Tuesday night it is changed: European governments now believe a more fundamental shift is needed and the move has to come from the UK side, three diplomats said.

    “The government approaches these meetings in a constructive spirit and I urge others to do the same,” May told the House of Commons after winning the confidence vote. “But we must find solutions that are non-negotiable and command sufficient support in this House.”

    Economic consequences of Brexit deal

    The pound initially rose after the historic vote on the Brexit deal. There were some expectations a cross-party approach would yield a Brexit plan that protects the trading connection with the bloc.

    But the Theresa May discovered that the price of her opponents’ cooperation could be too high.

    Rival party leaders promptly began to establish their conditions for taking part in talks to rescue May’s Brexit strategy. On the table is the option of delaying Brexit and even staging a second referendum on the membership of the EU.

    The leader of the main opposition Labour party, Jeremy Corbyn refused to take part at all in talks about the government’s new Brexit plan.

    Corbyn, the Labour leader, said May must rule out a no-deal Brexit as a precondition for discussions. After a spokesman for the prime minister later told reporters she was not doing so, Corbyn’s camp said no deal was “blackmail.”

    A “no-deal” Brexit is where the UK would cut all ties with the European Union overnight.

    Labour party, Scottish National Party, and Liberal Democrat members of Parliament favor closer trading ties with the EU. More than May has proposed. Labour party, for example, is advocating full, permanent membership of a customs union with the bloc.
    That sound as anathema to many pro-Brexit members of May’s Conservative party.

    British authorities warn that leaving the EU without a deal could lead to a recession, with the pound falling as much as 25 percent and house prices taking as much as a 30 percent hit. Already, suppliers to manufacturers are stockpiling just in case.

    Time is running short, and the prime minister has urgently scheduled calls with EU leaders to discuss the next steps.

    It’s unclear how much the EU can help.

    The bloc is willing to extend the Article 50 negotiating period beyond the summer. In order to find a deal if necessary, according to some diplomats. But on Wednesday, the EU’s chief Brexit negotiator, Michel Barnier said there’s no way to remove the need for the most contentious part of the agreement, the so-called backstop plan for the Irish border.

    According to some diplomats, European governments are willing to delay Britain’s departure well into the second half of the year.

    Brexit deal, is it to be or not to be?
    So, there is a chance for Brexit to not happen on the long-ago scheduled date of March 29.

    The economic exodus because of Brexit deal

    The increasing likelihood of a no-deal split is pushing wealthy Europeans, who have made their homes in the UK, to move out. According to Anthony Ward Thomas, founder of a firm of the same name that specializes in overseas relocation.

    He confirmed 296 moves away from Britain in 2018. That is an increase of 82 percent. Favored destinations are Paris, Brussels, Zurich, and Geneva, as well as southern France and Spanish locations such as Majorca. In other words the territories of EU countries.

    Popular destinations also include the Channel Islands, which don’t apply capital gains or inheritance taxes. Relocation inquiries increased more than 50 percent in the second half last year compared to the first six months.


    Customers are typically wealthy, having at least 5 million pounds ($6.4 million) at their disposal. They are European Union citizens moving with their families. There are some retirees seeking warmer weather but also favoring “more stable” political climate.

    It pretty much looks that the people are abandoning the ship because it is sinking.

    And the exodus may accelerate after the rejection of Theresa May’s Brexit deal.

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    Italy has also emerged as a magnet for moves, spurred by Brexit and the introduction of a new tax regime two years ago. This country was previously a focus mainly of the second-home owners. But these days, a new home buyer in Italy is, for example, entrepreneur or hedge-fund manager. They moved their families, bought homes, and started to work remotely.

    Financial consequences

    The pound drifted on Wednesday and gilts sold off even though the margin of the Prime Minister’s loss was way above the threshold many analysts feared would trigger panic. The prospect of a no-confidence vote in May later that evening has also failed to disrupt assets amid a general assumption she will prevail.

    Brexit deal, is it to be or not to be? 2
    The one soft spot was the FTSE 100 Index of shares, which tends to fall when the currency performs well.

    The key to the robust showing from UK assets appears to be in the scale of May’s defeat. A belief is growing among many financial professionals that there’s an increasing chance of a so-called soft-Brexit or even no Brexit at all. Those are outcomes many investors would cheer.

    Brexit deal, is it to be or not to be? 3
    It looks that the chances of a no-deal Brexit are so slim now it’s not even really worth considering anymore. It looks that the resolution will be an even softer version than May’s proposal or a new referendum.

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    That’s a view shared by a host of analysts who expected May to survive the no-confidence vote called by the opposition.

    The markets offer evidence of a pickup in confidence among traders. The cost of insuring UK banks’ subordinated debt fell, while volatility on pound options has slumped.


    So, we can say that Prime Minister Theresa May’s record defeat in Parliament over her Brexit divorce deal caused a curious response from markets: Optimism.

    The pound drifted on Wednesday and gilts, which is a traditionally safe investment, sold off even though the margin fell way below the threshold. And many analysts feared it would trigger panic. The prospect of a no-confidence vote in May later that evening has also failed to disrupt asset prices amid a general assumption she will prevail.

    Not everyone sees the glass as half full

    One undeniable outcome of the defeat of May’s deal is a further delay to the Brexit process and yet more uncertainty for traders. Dean Turner of UBS Global Wealth Management is among those recommending caution.

    Fidelity International Leigh Himsworth is also wary. He’s reminding investors that a no-deal Brexit remains the default option. And that the mechanics of any other possibilities are difficult. He recommends investing in liquid assets and hedging against the various outcomes.

    Brussels’ chief negotiator, Michel Barnier stated Brexit is at a standstill after the crushing rejection of Theresa May’s deal by MPs but offered to return to the negotiating table if parliament forces her to shift the “red lines”.

    So, we will see. Monday is coming very soon.

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