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WORLD | 13-03-2019 10:40

British MPs set to vote on no-deal Brexit as tensions escalate

UK slashes 2019 economic growth forecast as crucial vote looms. If a no-deal Brexit is rejected, MPs will vote on Thursday on whether to seek an extension to the departure process that would conclude its 46-year EU membership.

British MPs will vote Wednesday on whether they want to avert a potentially chaotic "no-deal" exit from the EU, as business leaders warned the country was "staring down the precipice" after Parliament rejected a divorce agreement.

The House of Commons is expected to vote against leaving the bloc without a deal -- although it remains the default option unless an alternative can be secured by the fast approaching March 29 Brexit date.

MPs on Tuesday once again resoundingly rejected the withdrawal deal agreed between Brussels and UK Prime Minister Theresa May, despite the embattled leader obtaining last-minute assurances from EU chiefs on key sticking points. If a no-deal Brexit is rejected, MPs will vote on Thursday on whether to seek an extension to the departure process that would conclude its 46-year EU membership.

The European Union said it had done all it could and it was now up to Britain to decide what it wanted to do next. The bloc's chief Brexit negotiator Michel Barnier said Brussels will not rework the painstakingly-negotiated withdrawal agreement.

"It is the responsibility of the United Kingdom to tell us what it wants in a future relationship, what is its choice," Barnier told the European Parliament in Strasbourg. "It's the question that must be answered even before any decision on an extension. "Why would we prolong the negotiation? To do what? Because the... negotiation is finished, we have a treaty, it's there," he said, holding up the 585-page document.

This week's votes come two years after Britain set the clock ticking on its departure from the EU following a referendum in 2016 that has deeply divided both parliament and the entire country.

'Unenviable choices'

The government also announced a series of measures in case Britain crashes out without an agreement. It said it would scrap tariffs on 87 percent of imports and would not apply customs checks on the border with Ireland. The temporary plan is aimed at avoiding a jump in prices of EU imports and a disruption of supply chains immediately after Britain's departure. Tariffs would be retained but reduced for some agricultural products such as beef, pork and dairy imports to protect British producers.

After Tuesday's defeat, May warned MPs: "Voting against leaving without a deal and for an extension does not solve the problems we face.

"Does it [Parliament] wish to revoke Article 50?" she said, referring to the Brexit process. "Does it want to hold a second referendum? Or does it want to leave with a deal but not this deal? These are unenviable choices but... they must now be faced."

Business facing 'precipice'

Specifically, the House of Commons will vote Wednesday on whether it "declines to approve leaving the EU without a withdrawal agreement", noting that no-deal "remains the default" unless the house and the EU ratify an agreement.

A group of lawmakers will put forward an alternative proposal to delay Brexit until May 22 and strike a series of interim agreements with the EU lasting until 2021.

Having briefed her Cabinet on the next steps, May is due to face questions in Parliament from 12pm GMT. She is later due to open debates on the major votes, which are expected from 7pm GMT.

The pound enjoyed a slight uptick after Tuesday's sharp losses while London's stock market was steady Wednesday.

Catherine McGuinness, the City of London financial district's policy chief, said British business was now "staring down the precipice."

"Politicians of every hue must overcome their differences and make avoiding a no-deal Brexit the absolute priority," she said.

MPs first rejected the Brexit deal in January by a historic margin of 230 votes. Though some eurosceptics changed their minds, Tuesday's defeat was still by a hefty 149.

If MPs vote against a no-deal exit on Wednesday, and want to postpone Brexit, the other 27 EU nations would have to agree unanimously. Their next summit is on March 21-22.

Growth forecast down

Britain on Wednesday slashed its 2019 economic growth forecast, as finance minister Philip Hammond said lifting Brexit's "cloud of uncertainty" was Parliament's "most urgent task."

The UK economy is forecast to grow by 1.2 percent this year, sharply down on the government's prediction of 1.6 percent in October, Hammond said as he gave a budget update hours before MPs were due to vote.

"I am acutely conscious that the House [of Commons] has other pressing matters on its mind today," Chancellor of the Exchequer Hammond told MPs after announcing that British gross domestic product growth would be much lower than expected this year, with the UK economy hit also by China's slowdown and trade war tensions.

"Last night's vote leaves a cloud of uncertainty hanging over our economy and... our most urgent task in this House is to lift that uncertainty," Hammond said in his budget address.

"Leaving with 'no deal' would mean significant disruption in the short and medium term, and a smaller, less prosperous economy in the long term than if we leave with a deal – higher unemployment, lower wages, higher prices in the shops. "That is not what the British people voted for in June 2016" to leave the EU, the chancellor added.

Hammond added that the UK economy was expected to grow by 1.4 percent in 2020, unchanged from the government's October forecast.

- TIMES/AFP

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