Brexit paralysis continues as MPs fail to vote for deal, PM to try again on Monday

By

Sandra Halliday

Published
Oct 20, 2019

Last week’s Brexit deal and the pulling of Saturday’s Parliamentary vote have left the UK retail sector back where it has been for the last almost-three-and-a-half years: facing an uncertain future as consumers shun discretionary purchases, businesses hold back on taking investment decisions and the economy declines further.

The British Retail Consortium and British Fashion Council haven’t yet commented on the impasse that the weekend delivered, although with another vote on the deal on Monday, that's no surprise.

But retail is clearly growing impatient with the endless waiting, On Friday, Lord Stuart Rose, who previously ran Arcadia and M&S and who had been a key part of the official Remain campaign, had urged MPs to back the deal, telling the BBC’s Today programme: “This isn’t ideal. But this is I think now today the best deal we’ll get, and certainly it is better than a hard Brexit. I am remainer, but I’m also a realist, a pragmatist. We’ve just got to move on. We’ve got to reflect on the pros and cons put, aside our differences, and think the bigger picture and purpose.”

While many think the same way, on Saturday, a majority of MPs found themselves unable to support a deal that was very similar to the previously-rejected Theresa May one, which incidentally was one Prime Minister Boris Johnson had himself voted against three times. They backed a move to delay approval of the deal and the vote on it was pulled.

It meant that Johnson was legally obliged to ask for an extension of Britain’s EU membership, despite having previously said the country would exit the trading bloc on October 31 “do or die”. But in asking for the extension he managed to confuse things further, sending an unsigned letter requesting it, while also sending the EU a separate letter saying he didn’t really want an extension.

Extension or not, it means that as UK retail works its way through what used to be known as its ‘golden quarter’ due to the large numbers of sales and the big chunk of profits it generated, the prospects are bleak. If nothing is agreed this week, it would be the fourth Christmas shopping season to be blighted by Brexit uncertainty.

Two retail businesses went into administration on Friday — Bonmarché and Watt Brothers — with the former directly blaming that uncertainty for many of its problems. And it’s not the only retailer to have done so with many of its peers also bemoaning the paralysis that Brexit seems to have caused in the consumer economy.

As mentioned, Boris Johnson will be back for another try at getting his deal through Parliament on Monday. Will it get through? Many Brexit-supporting MPs who’d previously voted against Theresa May’s deal have decided Johnson’s deal is OK because it was negotiated by one of their own, but it’s still unclear whether has the numbers he needs. However, on Sunday, Foreign Secretary Dominic Raab said he was confident that enough MPs would back the deal this week.

If that happens, it would mean the UK ‘leaving’ the EU imminently, although there would be a period stretching to the end of next year when much of the business between the country and the EU will go on as usual while a future relationship is negotiated. 

After that, the UK’s trading relationship with the EU is likely to be less favourable than it has been since the country joined the bloc. The Governor of the Bank of England last week said that the PM’s deal would be a “net economic positive” and better than a no-deal Brexit. But he added that the deal might not help the economy as much as Theresa May’s agreement would have done. And of course, the Bank of England’s position has also been that Brexit would dent the UK economy, even with a deal.