Latest Brexit setback leaves UK mired in chaos

Postponement of separation left as the only viable alternative to a no-deal Brexit

A third vote this week, on whether to delay Brexit beyond its March 29 schedule, will take place on March 14. PHOTO: BLOOMBERG

The United Kingdom's impending exit from the European Union was plunged deeper into chaos after lawmakers once again resoundingly rejected a deal put forward by Prime Minister Theresa May - leaving a postponement of the separation as the only viable alternative to a no-deal Brexit.

Last night, MPs were locked in a divisive debate on whether to block a no-deal Brexit, ahead of a crucial vote (3am today Singapore time). This came after the House had voted 391 to 242 on Tuesday to reject Mrs May's revised Brexit deal.

A third vote this week, on whether to delay Brexit beyond its March 29 schedule, is expected to take place tomorrow. Even if the votes were to go as observers expect - with the House rejecting a no-deal scenario and backing a delay - there is little clarity about what is to follow.

A dismayed Mrs May said to lawmakers after Tuesday's vote: "Voting against leaving without a deal and for an extension does not solve the problems we face."

The no-deal vote applies only to the March 29 deadline, and the UK could still leave without an agreement later this year regardless of how lawmakers vote. Meanwhile, a request for postponement would have to be agreed to by every EU leader.

Mr Andrew Cheung, Dubai-based general counsel and partner for Dentons UK and Middle East region, said: "The rejection of the withdrawal agreement by the British Parliament for a second time puts the UK and the EU in an unprecedented and incredibly challenging position. Absent a unanimous extension of Article 50 by the EU, for which they require compelling reasons from the UK, and further UK legislation for an extension, the UK will leave the EU without a deal in 15 days' time."

He added: "It is unclear what options are left for the UK. Further negotiation with the EU is unlikely unless it wants a soft Brexit, which is a Labour Party policy, which leaves a referendum or hard Brexit as the only options left."

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Mrs May has repeatedly stressed she is opposed to a second referendum. European Commission President Jean-Claude Juncker has also said this week that the deadline should not be pushed back beyond May 23, when the European Parliament holds its elections.

London-based Singaporean lawyer Saqib Alam of Morrison & Foerster, who advises companies on implications of Brexit, similarly said a postponement of Brexit would be of little relief to businesses.

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"The business community has been vocal about its opposition to a no-deal Brexit. Delaying Brexit prolongs the uncertainty, particularly when exiting without a deal remains on the table," he said.

"But anything is possible - a no-deal Brexit, a new-deal Brexit, Brexit delayed, Brexit cancelled. In the face of cliffhangers and contingencies, the British government needs to come together to chart one course and restore certainty."

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Yesterday, the government appeared to be carrying ahead with its worst-case scenario planning, announcing that it would cut most tarriffs to zero in the event of a no-deal Brexit.

Under the new system, which will apply for 12 months after a no-deal Brexit - during which time the government will discuss a permanent plan - 87 per cent of import duties will be liberalised, with protections for some industries including automotive and farming. Lower tariffs would also apply to beef, lamb, pork, poultry and some dairy.

"This balanced approach will help to support British jobs and avoid potential price spikes that would hit the poorest households the hardest," said Britain's Trade Policy Minister George Hollingbery.


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A version of this article appeared in the print edition of The Straits Times on March 14, 2019, with the headline Latest Brexit setback leaves UK mired in chaos. Subscribe