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Reactions to the UK’s withdrawal plans from EU

The EU reactions

On Tuesday 29.01.2019 the House of Commons MPs voted through the Brady amendment. This recommends replacing the Irish backstop with “alternative arrangements” that would still avoid a hard border. What exactly the “alternative arrangements" are, no one knows.

Within minutes of the House of Commons announcing its plans to replace the Irish backstop the EU had reiterated its position on the issue. Donald Tusk, President of the European Council, has asked the prime minister to explain her next steps with regards to the withdrawal plan. Tusk claims that the agreement they negotiated over the last 20 months “remains the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union.”

The EU has been very clear that the withdrawal agreement is not open for renegotiation. A spokesperson for Mr. Tusk commented, “We will continue our preparations for all outcomes, including a no-deal scenario. We will also continue the EU’s process of ratification of the agreement reached with the UK government. President Tusk will stay in close contact with EU27 leaders.”

French president Emmanuel Macron
French president Emmanuel Macron said the withdrawal agreement “is the best accord possible. It is not renegotiable.” He added that a no-deal scenario was one that “no one wants but we should all prepare for.”

A senior EU official was quoted as saying, “We will not reopen the withdrawal agreement...So it may be about semantics of what ‘reopening’ means. If things go towards more declarations, assurances or statements – we can do that. But if she really wants to reopen the whole thing, then it’s a ‘no’.”

Industry reactions

Prior to the approval of the Brady amendment, UK firms were desperately hoping for an article 50 extension, that’s according to James Stewart, Head of Brexit at KPMG. Mr. Stewart said that the majority of larger firms were preparing for Brexit and implementing “no deal” plans.

The Confederation of British Industry (CBI) has said that the private sector is stuck in neutral. According to its survey of firms across Britain, businesses are recording zero growth in their last quarter.

The CBI’s chief economist, Rain Newton-Smith has said, “Brexit deadlock, diverted investment and low business confidence are hitting firms hard. Every business will feel no deal is hurtling closer. Politicians must come together and act at speed to protect the UK’s economy.”

Tom Enders, chief executive of Airbus, has warned that a "no deal" Brexit could see the company move over time. Mr. Enders said that Airbus could be forced to "redirect future investments" in the event of a "no deal" Brexit.

Jürgen Maier, Siemens UK boss, pointed out that electronics is one of the fastest-growing manufacturing sectors, but he added that he is already seeing a reduction in UK investment in favour of the continent. Maier commented that a factory can have a long lifespan, but if it doesn’t have investment, it will slowly die.

If we look at the car industry, right across the globe, we see an industry that requires huge levels of investment to allow manufacturers to make the change to electric cars. The last thing that these companies need is a reduction in investment.

This could be the very reason that James Dyson (Dyson Technology company famous for the bagless vacuum cleaner) has relocated his company to Singapore. This is where Dyson will build its new electric car. James Dyson, who has been pro-Brexit throughout the campaign, says the decision was not driven by Britain's looming departure from the European Union or tax implications. So, was it a lack of investment? According to James Dyson, the reason for relocating was to be closer to his company's fastest-growing markets.

What we do know is that the UK still does not have a deal approved with the EU, its foreign direct investment is down, and it's businesses and industries are beyond frustrated with the uncertainty that Brexit has caused, with many of them deciding to relocate their operations. 

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