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The Government was yesterday defeated over its Finance Bill after MPs voted 303 to 296 in favour of a cross-party amendment requiring parliamentary approval for using taxation powers to implement a No Deal Brexit. The amendment does not completely block a No Deal scenario, but states that the Government would not be allowed to amend taxation laws after the UK leaves the EU unless a Brexit deal was agreed, Article 50 was extended, or if the House of Commons approved a No Deal exit. Twenty Conservative MPs, including seventeen former ministers, voted against the Government. A Downing Street spokesperson said, “This amendment does not change the fact that the UK is leaving the EU on the 29 March, and it will not stop the Government from collecting tax,” adding, “We will work with Parliament to make sure that the tax system works smoothly in all Brexit scenarios.”
Elsewhere, the Prime Minister’s spokesperson has confirmed that the ‘meaningful vote’ on the Withdrawal Agreement will be held on January 15. This comes as the parliamentary debate ahead of the vote resumes today.
Separately, Prime Minister Theresa May reportedly told Cabinet ministers yesterday that her Brexit deal is unlikely to pass the House of Commons next week, and that she would respond quickly with a statement to the House of Commons. This comes as a group of Conservative MPs including Dominic Grieve, Oliver Letwin, Jo Johnson, and Anna Soubry, tabled an amendment to the Brexit debate business motion urging the Government to make a statement to the Commons within three sitting days to present an alternative if the Brexit deal is rejected.
Meanwhile, Sky News reports that the Government intends to publish a paper on Northern Ireland which seeks to address Unionist concerns about the operation of the backstop. These commitments will include a “Stormont Lock” guaranteeing that no new areas of law could apply to Northern Ireland without the consent of the Northern Ireland Assembly. Cabinet Office Minister David Lidington will refer to these proposals in the House of Commons later today.
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Asked about reports of UK officials seeking an extension of Article 50 to delay the UK’s withdrawal from the EU, Brexit Secretary Stephen Barclay yesterday said, “I can be very clear that the government’s policy is to leave [the EU] on the 29th of March.” The Government’s spokesman also yesterday denied that UK officials have been talking to the EU about extending Article 50.
Elsewhere, Irish Foreign Affairs Minister Simon Coveney yesterday said, “If it is the case that in some point in the future the British Government seeks an extension of Article 50, that will have to have EU approval, but that is not something [Ireland] would stand in the way of,” adding, “All focus now needs to be on the [Brexit] deal and providing clarifications on the detail of that deal.”
Speaking alongside Coveney in Dublin, German Foreign Affairs Minister Heiko Maas yesterday said, “Those who hope [an extension] is going to happen in order to have a better position for further negotiations run a great risk,” adding, “Should [Prime Minister] Theresa May not get the majority for her proposal next week, it will be a very difficult situation indeed.”
Separately, the French Europe minister, Nathalie Loiseau, said yesterday that the Brexit Withdrawal Agreement would not be renegotiated. She stated, “The backstop is just a last resort solution,” adding that while “political assurances” could be offered, “There is nothing more we can do.” She also added that there has been no discussion in France about an Article 50 extension.
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The DUP have criticised the Migration Advisory Committee’s (MAC) recommendations on a post-Brexit immigration system as “too rigid.” While the MAC recommends restrictions on low-skilled immigration, the DUP argues that “appropriate future access to low-skilled labour in Northern Ireland is important.” They also state that a £30,000 salary threshold for skilled workers is “far too London-centric.” The Head of the Northern Ireland Civil Service also expressed “deep disappointment” that future immigration policy “does not appear to be sensitive to the unique risk to the Northern Ireland economy.”
A new report from the World Bank has warned that a number of countries not in the EU would be impacted by a No Deal Brexit. The author of the report, Franziska Ohnsorge, said, “Brexit without a deal is a risk to the UK and to Europe and any region that trades heavily with them. It means that countries in eastern Europe like Moldova and as far away as Georgia and those in North Africa will be affected.” The report also states that global economic growth will slow down in 2019 and 2020.
The mayor of Belgian port city Ostend, Bart Tommelein, told the BBC that the city would not be ready in time for a new ferry service in time for Brexit. This comes after the UK Government awarded a £13.8m contract to Seaborne Freight to implement a ferry service between the ports of Ramsgate and Ostend after Brexit. Tommelein said, “We are interested in a ferry line… Because we have a harbour and a harbour needs traffic. But there are some inconveniences, also some investments to do in our harbour [and] in the harbour of Ramsgate,” adding, “I want guarantees about the profitability of this ferry line and the solvency of this company.” Meanwhile, Transport Secretary Chris Grayling told the House of Commons there are “no reasons to believe any of those involved in this business [Seaborne Freight] are not fit to do business with Government.”
German Chancellor Angela Merkel and French President Emmanuel Macron will sign a bilateral treaty on January 22, aiming at closer collaboration and integration between the two countries. Specifically, the new treaty will commit both states to boost their cooperation in economic, foreign and security policies, culture and education, technology and environmental concerns. In its published statement, the German government said that greater convergence between France and Germany stems from the need to “face the challenges of the 21st century together.”
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In a new blog, Open Europe’s Aarti Shankar writes, “The UK cannot easily ‘suspend’ the exit process to seek more time.” She argues, “It can either request an Article 50 extension from the EU – which would require unanimous approval from member states. Or it can unilaterally withdraw its decision to leave the bloc. But this should be unequivocal – in theory, if it becomes clear the UK is using it in order to buy more time, the EU retains the right to cancel the revocation and ask the UK to leave. In both circumstances, the EU remains in charge of the timetable, and parliamentarians continue to face the same basic choices: a version of the existing deal (perhaps with some tweaks to the future relationship or assurances on the backstop); No Deal; and No Brexit.” She concludes, “For now, there appears to be no majority in parliament for any option. But if MPs are determined to avoid No Deal – as most are – they will have to decide in favour of something sooner or later. Extending Article 50 does not change this fundamental reality.”