Theresa May’s reign as Prime Minister is set to continue after successfully passing a vote of no confidence, which was tabled by Labour leader Jeremy Corbyn yesterday, following May’s Brexit deal defeat.
MPs rejected her EU withdrawal agreement through a landslide defeat – 432 votes against, 202 votes for – the largest margin of defeat in over 100 years. Over 110 Conservative MPs voted against their leader. Interestingly, three Labour MPs voted for May’s Brexit deal.
Immediately following the announcement, Labour leader Jeremy Corbyn called for a vote of no confidence, which took place yesterday evening. Although May was expected to succeed, the rejection of her Brexit deal is the latest in a long saga of troubles for the PM.
May will now return to the Commons next week with a revised deal.
How are business leaders reacting?
Business leaders react
The pound is gaining ground following the defeat of Theresa May’s Brexit deal in the House of Commons. In the lead up to the vote the pound fell below $1.27, after the vote is has risen above $1.28.
News and reaction is still flowing in, which could prompt further movements in sterling.
The UK stock market is closed, it will open for trading tomorrow morning at 8am.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown said: ‘The pound has become the market’s Brexit barometer, and it’s been a volatile night as currency markets digest proceedings in Westminster.
“Sterling gained ground following the vote, but only recovered ground it lost earlier in the day. Markets think a softer Brexit may start to take shape now the vote has failed, as parliament gains greater control of the process. This is a change in dynamic, as previously government failures have heightened expectations of a hard Brexit, and have weighed sterling down.
“Clearly there’s still no certainty to be had, and tomorrow’s vote of no confidence provides another pinch point for currency markets, so we can expect further swings in sterling as events develop.
“The reality is there’s no correct price for sterling until there’s greater resolution on the direction of Brexit, what we have right now is a middle ground between competing possibilities. Assuming Brexit does resolve itself one way or another, the pound will ultimately find a new level, but it’s not going to be a smooth journey.’
Responding to Parliament’s rejection of the Government’s Brexit Withdrawal Agreement, and the tabling of a motion of no-confidence in the Government, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:
“It is time for politicians to come together and urgently find a way forward from this alarming Brexit stalemate, and now, no-confidence vote. The UK is due to leave the EU in just ten weeks, and yet businesses still have no idea what kind of circumstances they should prepare for. Many small businesses would be adversely impacted by a chaotic no deal exit. It is vital that there is a transition period, to give smaller firms time to adapt to whatever the final outcome turns out to be.
“Small business confidence has plummeted to its lowest point since the wake of the financial crash. Four in ten expect performance to worsen over this quarter, two thirds are not planning to increase capital investment, and a third see lack of the right skills as a barrier to growth. That’s what political uncertainty does to business: it makes it impossible to plan, innovate and expand.
“The UK’s talented entrepreneurs are adept at finding innovative solutions when overcoming challenges in their businesses. It’s time for politicians to show that kind of innovation, flexibility and can-do spirit to end the impasse and bring some certainty that there will be both time and support to plan for the future during a transition period.
“The Prime Minister tonight suggested that beyond tomorrow’s confidence vote she would be willing to approach members of other parties in a constructive spirit. This should involve meaningful talks, to find a genuine cross-party way forward.”
Responding tonight’s events in Parliament, Stephen Martin, Director General of the Institute of Directors, said: “It is the collective failure of our political leaders that, with only a few weeks to go, we are staring down the barrel of no deal.
“As things stand, UK law says we will leave on 29th March, with or without a withdrawal agreement, and yet MPs are behaving as though they have all the time in the world – how are businesses meant to prepare in this fog of confusion?
“The clock is still ticking, and whatever the outcome of tomorrow’s no confidence vote, the reality is that MPs will still need to find a way to put aside their differences and come to an agreement.
“We are nearly two months out from leaving the EU, and firms still do not know basic information such as the processes they would need to comply with for day one of no deal. This alone makes letting the uncertainty carry on simply unacceptable.”
Jonathan Beech, Managing Director of Migrate UK, in reaction to the MPs voting against Theresa May’s Brexit deal.
He said: “Following MPs’ rejection of Theresa Mays’ Brexit deal and the pending confidence vote, whatever happens next whether it’s a renegotiation, another referendum or even a call for a general election, the closer we get to March 29th then the greater likelihood of a stay of execution for EU nationals and of Article 50 being delayed.
“Despite the outcome, this unprecedented uncertainty, anxiety and concern is continuing over the future of EU national workers and their dependents as well as employers trying to safeguard the skills they need to grow their business in times of uncertainty.
“Employers struggling against a depleting workforce should take immediate action, to safeguard their skills. Where employers haven’t already done so, identify gaps in your current and future workforce and highlight whether they’ve got the means of remaining in the UK in the future, be this via a residence permit / card or settlement / permanent residency.
“Companies with genuine skilled vacancies should consider applying for a sponsor licence so they have access to a wider pool of talent. In addition, every business must have the correct permitted documentation to employ EU workers no matter what the outcome will be between now and March.”
Paul Telford, Director of home seller empowerment platform, OkayLah, commented: “The continued debacle that surrounds our European departure will do little to stabilise the current turmoil of the UK property market. Both home sellers and buyers will be unsure whether they are coming or going in the current market climate and this hesitation will no doubt see transactions drop and price growth follow suit for the short term at least.
“While the estate agency sector itself has suffered as a result of this lethargic market activity, there remains an appetite for homeownership and although Theresa May’s deal may have failed to materialise the UK property market is far from Brextinction.
“For those still intent on buying or selling, a sale can be achieved but now more than ever it requires comprehensive market research, a realistic asking price on entering the market and a little perseverance and patience during the latter stages of a sale.
“Those that arm themselves appropriately with the knowledge to do so will find there is life outside of Westminster, as the world keeps turning and people keep on moving.”
Responding to the Parliamentary defeat of the Meaningful Vote on the Brexit Withdrawal Agreement and Political Declaration, Phil Smith, Managing Director at Business West, said: “There are no more words to describe the frustration, impatience, and growing anger amongst business after two and a half years on a high-stakes political rollercoaster ride that shows no sign of stopping. Basic questions on real-world operational issues remain unanswered, and firms now find themselves facing the unwelcome prospect of a messy and disorderly exit from the EU on March 29th.
“The overriding priority for both government and Parliament must now be to avoid the clear danger that a ‘no deal’ exit on the 29th of March would pose to businesses and communities across the UK. Every second that ticks by sees more businesses spending money on unwanted changes, activating contingency plans or battening down the hatches and halting investment, as they try to anticipate a future that is no clearer now than it was at the time of the referendum result.
“Businesses will take a dim view of more shuttle diplomacy and last-minute bargaining, which have so far done nothing to end the political impasse. The government must now urgently set out in concrete terms what it will do to avoid the damage that a messy and disorderly exit on March 29th would cause to businesses, communities, and the UK economy.”