May loses Brexit vote, Ireland rejects EU tax plans, and Datalex shares fall 59%

Business Today: the best news, analysis and comment from ‘The Irish Times’ business desk

A screen shows the trajectory of the pound over this afternoon ahead of the  Brexit Deal vote

A screen shows the trajectory of the pound over this afternoon ahead of the Brexit Deal vote

 

The overwhelming rejection by MPs of Theresa May’s Brexit deal, the biggest defeat ever inflicted on any government, sees the UK prime minister in a race against time to revamp and resuscitate her deal before Britain’s scheduled departure from the EU on March 29th. Sterling dropped and then rebounded somewhat in volatile trade following the vote. The Government said last night that it regretted the decision and in a strongly worded statement it urged the UK “to set out how it proposes to move forward”. The statement also stressed that the withdrawal agreement “is not open for renegotiation”.

The Irish Exporters Association said the Irish business community must now urgently implement their no-deal Brexit contingency measures. Simon McKeever, IEA chief executive said: “The Irish business community simply cannot afford to continue its ‘wait-and-see’ approach and trust on the UK political establishment to prevent a no-deal Brexit.”

Amid the uncertainty as to what will happen next, there were warnings from senior business leaders in the North and the Republic that many firms in the North “simply could not cope with a no-deal Brexit”. Meanwhile, official trade figures revealed Irish goods exports to Britain fell 4 per cent in the first 11 months of last year.

Brexit has also been cited as the reason for Barclays bank abruptly pulling its support for an interest-free credit offer to customers at clothes and furniture retailer Next.

Ireland has rejected EU proposals to scrap national vetoes on matters relating to tax. The Republic issued a swift rejection on Tuesday after EU Commissioner Pierre Moscovici formally unveiled his blueprint for a transition to qualified majority voting on EU taxation policy matters. “Taxation is a sovereign member state competence and decisions at [European] Council on tax matters require unanimity,” a spokeswoman for Minister for Finance Paschal Donohoe said in response to the Commission’s plan.

Datalex shares slumped by 59 per cent on Tuesday after the Dermot Desmond-backed travel software company issued a shock profit warning and revealed it may have misstated revenues in relation to a major customer, known to be Lufthansa, in the first half of last year.

The sun has set on Ryanair’s package holiday service just two years after it launched. A note from the company on its website said Ryanair Holidays is discontinuing its service. The airline launched its package holiday service amid much fanfare in December 2016 with a view to taking on tour operators such as TUI by offering flights with accommodation and transfers as a bundle.

In her Bottom Line column, Fiona Reddan considers the options open to Paschal Donohoe in the mooted revamp of the local property tax scheme, which should, technically, see people adjust their valuations to bring them into line with current market values.

Developer Harry Crosbie has been given the green light for a new eight storey 185-bedroom hotel at Vicar Street in the Dublin Liberties in spite of some local opposition. An opening is pencilled in for 2020.

Ireland’s commercial property sector is expected to post another bumper year in 2019, with office space take up likely to remain strong and build-to-rent gaining in popularity, according to estate agency CBRE.

Forecasts are less upbeat for the high street retailers. In her London Briefing column, Fiona Walsh looks at Marks & Spencers’ ongoing plan to close one in three of its core clothing and home branches. Despite a public outcry, Fiona says that, given the dire state of the retail sector, the worry now is the closure programme may not be radical enough to stem the decline.