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UK business: Brexit deadlock causing “frustration and anger”

Pharma must still plan for no-deal, only slightly later

Brexit Parliament protest

An industry plea for Parliament to find a consensus on a way forward for Brexit in yesterday’s debate fell on deaf ears, with MPs failing to agree on any proposed alternatives to the withdrawal deal.

Edwin Morgan, interim director general of the Institute of Directors (IoD) said ahead of the indicative votes on Brexit options yesterday that “now is the moment to accept that every course of action creates both risks and opportunities”, adding that “our political leaders in Westminster…must be prepared to compromise.”

That was a faint hope however, with none of the eight Brexit options mustering a majority among MPs, although a couple came close. Meanwhile, the IoD membership’s preferred option of following Single Market rules on goods and services – backed by 60% of its 1,400 members – wasn’t even on the table.

“Businesses were told that by now a Brexit transition period would have been secured and we would have moved on to discussing our future relationship with the EU,” said Morgan.

“That we have got to this late stage with so little to show for it is the cause of deep frustration and anger among companies.”

As it turned out, five of the eight options were rejected comprehensively last night, including: going for European Free Trade Association (EFTA) and European Economic Area (EEA) membership; the Malthouse Plan B ‘managed no-deal’ option with an extended transition period; accepting a no-deal exit on 12 April; revoking Article 50 and halting Brexit; and Common Market 2.0 – also known as Norway Plus – which was another EFTA/EEA approach.

Three options garnered a bit more support. Demanding a customs union as part of the withdrawal agreement to avoid the Irish border issue was only narrowly defeated by 264 votes to 272, while Labour’s soft Brexit plan – which calls for a close alignment with the single market and laws on workers' rights and environmental protections – garnered 237 votes with 307 against.

The top choice however was a confirmatory referendum, which holds that Parliament cannot ratify any agreement on the UK’s withdrawal from the EU unless it has been approved by UK voters.

The continued impasse should have meant that Theresa May’s withdrawal agreement would gain additional support, however even that eventuality seems unlikely despite some senior Conservative Brexiteers saying they will now back it, including Jacob Rees-Mogg and Boris Johnson.

A statement from House Speaker John Bercow last night reiterated that he will not accept it without material changes, while the Democratic Union Party (DUP) – which hands the government its slim majority in the House – is still insisting it cannot back the deal because of the Irish border backstop clause.

May has even said she will stand down if her deal is accepted in an attempt to win support and allow a fresh approach to the post-withdrawal trade negotiations – lest we forget that three years on we are still only debating the withdrawal terms.

It’s a bitter situation for industry, and Morgan wants politicians to listen more closely to business leaders as companies know best how they will be affected by different Brexit outcomes.

Edwin Morgan

Edwin Morgan

“Politicians who claim to prioritise the UK’s future economic success must take account of the views of business leaders, who understand better than anyone the impact of the changes that are coming to our relationship with our largest trading partner,” he said.

When it comes to any further extension to Article 50, which would be necessary for any renegotiation of the withdrawal or a second referendum, it’s interesting that companies are split on whether that should be short or long.

Half of the IoD’s members favoured a shorter extension of up to three months, against 40% who backed a longer period of at least nine months.

In the meantime, the stalemate in parliament continues. The question now is whether May will table her withdrawal agreement for a third time tomorrow, or allow another round of debate and voting on the top two or three alternative Brexit options, scheduled for Monday.

For the biopharma industry, that means companies must continue with their no deal contingency planning, albeit against a new exit date.

28th March 2019

From: Regulatory

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