Greater Birmingham Chambers of Commerce
It’s been a defining week for Brexit with a number of important developments and announcements. Plenty for us to discuss in this week’s Brexit blog posts!
This week saw another ‘Super Thursday’ as we waited with baited breath to hear from the Bank of England on their forecasts for the UK economy and their decision on interest rates. The Bank announced a more positive outlook for the economy than expected with predictions of 2% growth in 2017; revised upwards from the 1.4% that had been announced in November. At the Bank’s monetary policy committee meeting, the group voted unanimously to keep interest rates at 0.25% and continue its programme of quantitative easing. The decisions were based on unexpectedly strong consumer spending and recently announced plans for more government investment. You can read our full interest rates press release here.
Nevertheless, Mark Carney made a point of stating that strong growth projections don’t mean that the referendum will be without consequence and that the Bank expects plenty twists and turns along the Brexit journey.
The FTSE 250 has climbed steadily over the past five days however it’s been a week of mixed performance for the FTSE 100. The index was buoyed on Thursday by the Bank of England’s latest forecasts; however it experienced a volatile start to the week as markets reacted negatively to a number of announcements from US President Donald Trump.
Despite steady mid-week gains for the pound against both the dollar and the euro, the value of the currency dropped sharply on Thursday following the Bank of England’s announcements and the release of the Government’s Brexit white paper. The pound is now valued at €1.16 and $1.25.
On Wednesday, the Brexit process took a significant step forward as Parliament was asked to vote on a bill that would allow the Prime Minister to trigger Article 50 of the Lisbon Treaty. This follows months of debate and high profile court cases that focussed on role of parliament in triggering the UK’s exit from the European Union. The bill was approved by a majority of 384 votes. Whilst the bill still needs to progress through three days of debate in the House of Commons, before being sent to the House of Lords for scrutiny, the margin of victory would seem to indicate that the bill will be fully approved in time for the Government to begin the process of Brexit by the end of March.
Whilst the vote marked an important success for Theresa May’s government, the same cannot be said for Jeremy Corbyn’s Labour Party. Despite implementing a three-line party whip, Wednesday’s vote saw 13 serving frontbenchers and a total of 47 Labour MPs defy Corbyn’s instructions and vote against the bill. There were also further headaches for Corbyn as shadow cabinet members Rachael Maskell and Dawn Butler quit the frontbench shortly before the vote. This will prompt mini-shadow cabinet reshuffle. All SNP, Plaid Cymu, and Liberal Democrat MPs also opposed the bill, alongside Ken Clarke MP, the only Conservative minister to stray from the party line.
On Thursday, the Government published a white paper titled ‘The United Kingdom’s exit from and new partnership with the European Union’. This follows an announcement made by Theresa May at Prime Minister’s Questions on 25th January 2017 that a paper would be put before parliament for scrutiny. The paper centres on 12 principles that the Government will abide by during the Brexit negotiations. The principles are:
The white paper is structured to provide a more detail on each of these topics and give the public a clearer understanding of the major themes that will be central to the negotiation process. The paper has been criticised by the Labour Party who argue that it doesn’t provide enough detail and that the timeline does not allow for meaningful scrutiny. It has also come under fire for an embarrassing error that would seem to imply that the paper was produced hastily. We will be publishing a briefing paper to summarise the key points from the white paper in the near future.
This Week at the Chambers
Yet another busy week at the Chambers with plenty to keep us occupied.
We’ve been getting ready for the GBCC’s Growth Through People campaign which kicks off on Monday. The campaign will share tools, techniques, and information that will help business leaders to more effectively manage their workforce and unlock growth and productivity as a result. We will be working with partners to deliver a wide range of engaging, free events that will look at these themes from a number of different angles. To see our full campaign calendar please click here.
On Tuesday I was fortunate enough to attend the launch of the West Midlands Combined Authority Mental Health Commission’s ‘Thrive’ action plan. Led by Chair Norman Lamb, the commission has worked with a wide range of regional stakeholders to develop a plan which aims to improve the mental health and wellbeing of West Midlands’ inhabitants.
On Wednesday our Chief Executive Paul Faulkner spoke at an event arranged by Gowling WLG on ‘The Future of Devolution in the West Midlands’. With an eye on the quickly-approaching WMCA Mayoral Elections on 4th May, this is an increasingly hot topic for the business community.
We’ve also been gearing up for the next period of fieldwork for our Quarterly Economic Survey. We use the data from this survey to produce a quarterly report that offers an up to date snapshot of the performance of the Greater Birmingham business community and is our flagship economic publication. It is the most comprehensive regular report of its kind in the city-region. Keep an eye on your inbox next week for further information.