This Week in Brexit
Greater Birmingham Chamber of Commerce
This Week in Brexit
It’s been a busy week in Brum and a busy week in Brexit, thanks largely to the Conservative Party Conference (CPC):
This Week in Politics:
Theresa May has dominated Brexit news this week.
Speaking before Conservative Party Conference began; she announced the introduction of a “Great Repeal Bill” in the next Queen’s speech and confirmed that Article 50 of the Lisbon Treaty will be activated by the end of March 2017.
If passed, the “Great Repeal Bill” would see existing EU law integrated into UK law and the European Communities Act 1972 removed from the statute book as soon as Brexit negotiations are concluded.
The European Communities Act 1972 gives direct effect to EU law, i.e. where an existing UK law contradicts new EU legislation, this Act means the EU law takes supremacy. This Bill would provide consistency by keeping EU law in place, but also allowing Government to then add, remove or amend legislation.
It is worth noting that the March 2017 deadline will mean that Brexit negotiations will begin before French and German elections have concluded. The outcomes of those elections could have a significant impact on the dynamic of the negotiations.
In her opening speech May highlighted red lines on control over immigration and leaving the jurisdiction of the European Court of Justice and ruled out adopting any existing models of working with the EU.
This has led many to read the approach as a “hard Brexit”, while she expressed her intention to negotiate access to the single market, it’s hard to see how this position can be reconciled with her stance on free movement of people and the ECJ.
She also confirmed that the decision on when to activate Article 50 will be made by Government, not by a vote in the Houses of Parliament.
You can read our full write up of the Conservative Party Conference here.
In response, French President Francoise Holland announced his intention to make sure the Brexit negotiations are not a walk in the park for the UK saying: “There must be a threat, there must be a risk, there must be a price.”
German Chancellor Angela Merkel also warned that any lobbying by German industry would not sway her and the EU from denying UK access to the single market.
Meanwhile, a YouGov poll indicated that 47% of Britons favour a “Hard Brexit” (leaving the single market) while 39% favour a “Soft Brexit” (retaining access in return for a modified form of free movement of people).
This Week in the Economy:
In response to renewed fears about a “Hard Brexit” the pound fell to a 31 year low. Investors have growing concerns that a “hard Brexit” (leaving the single market) could hit trade and investment and, as a result, reduce future demand for sterling.
Meanwhile, UK stocks benefitted from the weaker sterling with both the FTSE 100 and FTSE 250 seeing strong gains.
Separately, UK Trade figures for August 2016 revealed that the UK’s deficit on trade in goods and services was estimated at £4.7 billion in August 2016, a £2.5 billion increase on July 2016. This was driven by a significant rise in the volume of imports: exports increased by £0.1 billion while imports increased by £2.6 billion.
This Week at the Chambers:
This week, we’ve been focused on keeping the business community informed about developments at the Conservative Party Conference (you can read our press comments here and here).
We’ve also been speaking up for the local business community. Our CEO, Paul Faulkner and myself spoke at and participated in a range of CPC fringe events on everything from HS2 to women in business.
On Tuesday we partnered with seven other Chambers of Commerce from across the Midlands on our own fringe event on Transforming Skills in the Midlands (read more here). And on Wednesday we held our Annual General Meeting, welcoming our new President Paul Kehoe, CEO of Birmingham Airport (read more here).
We’ve also been adding our support to the announcement that Birmingham will bid to host the 2026 Commonwealth Games (click here).