B+LNZ preparing for all scenarios as Brexit uncertainty continues

As you may have seen on the news, UK Prime Minister Theresa May’s Draft Withdrawal Agreement was voted down by a significant 230 votes (432 against – 202 for), and Theresa May’s government survived a no confidence vote 325 votes to 306.
Thursday, 17 January 2019

Several Brexit scenarios are now possible, and Beef + Lamb New Zealand is watching developments over the next few days very closely as we continue to prepare for any eventuality. At the same time we continue to work closely, and in partnership with the Meat Industry Association (MIA) and the New Zealand government on the negotiations at the World Trade Organisation and the implications for our sheep and beef quotas into the EU27 and UK markets.

No Deal

  • There is a possibility that without the support of the UK Parliament, UK political turmoil, limited time before 29 March and an European Union unwilling to re-negotiate the terms of the draft Withdrawal Agreement, the UK and the EU are unable to agree a withdrawal agreement and the UK leaves with no deal.
  • This would be incredibly detrimental for the UK and the EU (and the rest of us as collateral) and we are consequently preparing for a no-deal scenario to mitigate the impacts on our exporters. The New Zealand Meat Board, B+LNZ, and the MIA are working together with the NZ government to ensure that trade disruption is kept to a minimum.

Back to Parliament

  • Theresa May must submit a new plan for Britain’s next steps by the end of January 21 (If there is no deal by January 21, the British government must make a statement within five days on what the United Kingdom plans to do, according to the European Union (Withdrawal) Act of 2018.)
  • Theresa May’s spokesperson told reporters on Wednesday that Theresa May’s deal could still form the basis of an agreement with the EU, but this may be unrealistic given the resounding rejection of the draft Withdrawal Agreement. The EU has offered to renegotiate with Theresa May in the event that she is able to build a majority with Labour in favour of a closer relationship with the EU.

Resignation

  • Theresa May could yet resign as leader of the Conservative Party, triggering an internal contest to replace her without a general election. She hasn’t indicated however, that she would do this and given she won the no confidence vote she appears willing to ride it out.
  • Remember too that Theresa May defeated an attempt to oust her as leader of the Conservative Party in December, winning a confidence vote by 200 votes to 117. The result means her position as leader of the party cannot be challenged for 12 months.

General Election

  • While Theresa May’s government has won the no confidence vote, there is still the possibility of another UK general election being called if two-thirds of lawmakers in parliament agree to it, but Theresa May has said that a general election is not in the national interest.

Second Referendum

  • There has also been a suggestion of a second referendum but, a new referendum can be called only if it is approved by parliament.
  • With Theresa May opposed to a second referendum, and the opposition Labour Party not committed to one (but not ruling one out), a second referendum would probably need either a change in Prime Minister, a change in government, or an abrupt change in policy.
  • There is also pressure from both Wales (to avoid a no deal scenario) and Scotland (to hold a second referendum) that Theresa May will need to take into account.

Delay or Cancel Brexit

  • And finally – the UK government could seek to extend the negotiating period with the EU to give it time to try to reach a better deal, hold a general election, or conduct a second referendum. Media reporting earlier this week suggested the EU was preparing to receive this request and France and Germany have both indicated their willingness to delay Brexit.
  • The government could also withdraw its notice of intention to leave the EU, which the European Court of Justice has ruled it can do without consent of other EU countries.
  • Theresa May has said she does not want to delay Britain’s exit from the EU, and will not revoke the notice of intention to leave.