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(Original link: marketwatch.com)
Brexit Brexit Brief: Business lobby warns of risks to thousands of UK jobs Comments from the Confederation of British Industry follow concerns expressed by ratings agency S&P By Lucy McNulty
January 11, 2019 Updated: 9:38 a.m. GMT The Confederation of British Industry, the influential lobby group for UK businesses, is to warn that a crash-out Brexit will shrink the country’s economy by 8% and put thousands of jobs at risk.
The CBI’s director general Carolyn Fairbairn will say in a speech on January 11 that British politicians have a duty to “safeguard the security and prosperity of our country” and put jobs and the economy ahead of politics.
Her comments come as MPs prepare to vote on January 15 on whether or not to accept UK Prime Minister’s exit agreement with Brussels.
Fairbairn’s comments echo those made by ratings agency S&P Global Ratings on Thursday . S&P said it could reassess its guidance on UK banks if the country is forced into a disorderly exit from the EU
It is widely expected that May will see her Brexit deal, secured last year, rejected by UK parliamentarians in next Tuesday’s vote. That would raise the likelihood of the UK leaving the EU without a deal in March.
The British foreign secretary Jeremy Hunt has sought to alleviate concerns about the threat of a no-deal Brexit, telling the BBC that he expected politicians to find a way to prevent such an outcome.
The pound dropped from $1.27596 at 07:30 GMT to trade at $1.27446 at around 8.30am UK time.
Elsewhere, the City of London Corporation, the governing body for the U.K.’s financial heartland, has said it would not support another referendum on the country’s membership of the EU.
Q&A: The Brexit story so far...
Negotiators in the UK and EU agreed the terms of their divorce and a rough outline for their future relationship in November, almost two-and-a-half years after the UK public voted to leave the bloc.
But a deal is by no means done.
It will only come into effect if parliaments in both the EU and UK agree to sign it into their respective statute books. And while the majority of European lawmakers support the deal, their British counterparts are divided.
UK politicians had been scheduled to vote on the deal on December 11. May postponed that vote at the last minute, however, as both pro and anti-EU politicians complained the deal still left the UK exposed to many European laws without giving it a say in their making.
May’s decision to delay the vote prompted frustrated Brexit supporters in her ruling Conservative Party to launch a leadership coup. When that failed, the embattled PM appealed to EU leaders for further concessions that would persuade more UK politicians to back her Brexit deal. As yet, none have been forthcoming.
So what’s next?
British politicians are now scheduled to vote on the deal on January 15. May needs a simple majority of 326 of the UK’s 650 parliamentarians for the exit terms she has secured to pass into national law.
But securing that will be no easy feat.
The Conservatives have a thin majority in the UK Parliament. Several senior government ministers resigned last year in opposition to her Brexit deal. The Democratic Unionist Party, a small Northern Ireland party that backs Brexit and props up May’s government, has also repeatedly threatened to reject the agreed divorce terms.
What happens if May loses the vote?
If May loses the vote on her EU deal by only a small majority — perhaps fewer than 50 votes — she will likely once again ask Brussels for last-ditch amendments to the deal, with a view to bringing those back to the UK Parliament and persuading enough politicians to back her in a second vote.
EU leaders insist that the deal agreed is the only one on offer and won’t be changed. But they might allow small tweaks in such a situation.
If May loses the January 15 vote by a large margin, members of her own party cannot attempt to oust her again. According to the Conservative party’s rules, its politicians cannot instigate a leadership coup for 12 months after any unsuccessful attempt.
But the opposition Labour Party has said it plans to trigger a vote of no confidence in the UK government if May’s deal is rejected — a move that could both topple the PM and trigger a general election.
Is a ‘no deal’ Brexit then the most likely outcome?
The majority of British parliamentarians don’t want the country to crash out of the EU without some agreed exit terms in place. In a bid to avoid such a scenario, the UK Parliament voted in December to take more control over the final stage of Brexit if May’s deal falls.
Politicians across all parties are pushing forward a series of amendments to key Brexit legislation that would leave the UK government unable to force the country into exiting without a deal. The first of these, backed by a majority of 303 parliamentarians on January 8, will restrict the government from raising taxes in a crash-out Brexit.
Are there any alternatives to May’s deal?