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Day Two: No Deal Vote and Tariffs


Jack Simpson looks at the day ahead , with No Deal Votes and Tariffs outlined.

Mays Agreement

In the Second Meaningful Vote, previewed here, the Withdrawal Agreement was defeated by 149 votes, meaning only 51 MPs switched to back the deal since it was voted down in January. May had hoped to get legal changes to the Backstop, a design to avoid a hard Irish border, but failure to do so and get the backing of the Irish party, all but confirmed the Agreements rejection.

The result was largely unsurprising, with MPs from across the Brexit spectrum voicing opposition to the Agreement yesterday, and all focus was on what happens next. Following a second seismic defeat, fourth largest in UK history, it would suggest a completely new approach is needed for Brexit to progress.

However, it is becoming increasingly clear, that there is no majority in Parliament for any one option, and while there was huge speculation about what the defeat would mean for the Prime Minister, for now, she is still carrying on.

No Deal

Therefore, Parliament pushes on to the second of its three Brexit votes, rather confusingly on “This House declines to approve leaving EU without a WA & a framework on the future relationship on 29 March”, so a vote against would be in favour of No Deal.

Members have been clear, North East businesses do not want a messy and disorderly exit from the EU. In the Government’s recently published report, Implications of a No Deal Exit, it states that “the lack of preparation by businesses and individuals is likely to add to the disruption”.

The North East and its institutions are not ready for a No Deal, the abruptness of changes caused by a disorderly Brexit would shock the regional economy, the likes of which could take decades to recover from.

We are therefore calling on MPs to prevent a disorderly exit from the EU. This will trigger a third vote tomorrow, on extending Article 50, and it is increasingly clear an extension is needed to allow proper implementation of, and preparation for, whatever is agreed… The vote is scheduled for 7pm 13/3/19.

No Deal Tariffs

A top demand from members panning for Brexit has been the publication of the planned tariff rates (a tax on imports) in the event of No Deal. Today, the UK released its long awaited plan for No Deal tariffs, with around 87% of import duties being reduced to zero.

You can look up the changes to the tariffs of your imported goods by clicking here.

For example, chemicals have a zero tariff applied. So, if I was an oil refinery, importing crude oil from the Balkan States, and processing it, having a zero rate would allow my business to remain globally competitive, although my exports would still be subject to new rafts of export documentation.

However, the WTO insists on a “Most Favoured Nation” policy, meaning that, outside of an agreement, a state must offer one tariff to all other trading nations. The UK would, therefore, be unilaterally dropping its tariff rates for the rest of the world, and could seriously undermine domestic business if cheap imports flood the market. But there will be some relief from sectors, such as farmers, that keep their protective tariffs.

The new import tariff on finished cars (10.6%) will cause some concern in the region. Around 70% of cars are imported and the tariff could add an average £1500 to the price of each car, and any reactive tariffs from the EU could erode global competitiveness of regional manufacturers, who export over 60% of their finished cars.

In response, the Chamber’s Director General, Adam Marshall, said that there would be clear “winners and losers” from this policy. The sharp change to trading will leave many global businesses exposed, and the Government's decision to do this without consultation is a great cause for concern.