Brexit – Parliament Fails Again. Will it be back to a People’s Vote?

The Monday Vote

There was yet more political wrangling overnight on Monday. Another display of political self-interest across the various parties and members of Parliament left Britain without a way forward with just 8-days remaining.

Following 8 alternatives last week, Speaker John Bercow narrowed the alternatives to just 4. Ahead of the vote, Ken Clarke’s Customs Union alternative would have been favorite when considering the narrow margins last Wednesday. It was not to be…

The following alternatives were on offer,

• Remain within the customs union: Ken Clark’s proposal saw the margin narrow from last week to just 3, but still not to be. (276 against/273 for). This vote was also referred to as Motion C.
• Common Market 2.0, also referred to as Motion D: Delivers a parliamentary declaration to be renegotiated to ensure that Britain joins the EU Free Trade Association. (282 against/261 for)
• Second Referendum: This was labeled as Motion E on Monday. (292 against/280 for)
• Parliamentary Supremacy, labeled motion G: An amendment to an alternative presented last Wednesday. Motion G gives Parliament the power to revoke Article 50. Motion G would come into effect should Britain fail to garner an extension to 10^th April in the event of no deal in place. (292 against/191 for)

From the outcome of the above, Ken Clarke’s customs union proposal came closest for a 2^nd consecutive week.

While there were significant divides across Parliament, the Labour Party and the SNPs were aligned in favor of Common Market 2.0. The alignment is almost noteworthy when considering the divide across Parliament.

The events in Parliament over recent weeks will have voters questioning their representations, however. The lack of consideration of what is in the best interest of the country at the final hour does raise questions over the structure of British politics.

What’s next?

The EU’s imposed 10^th April deadline is now just over a week away. As things stand, Britain continues to hurtle towards a hard Brexit come next Wednesday.

While this will certainly not be the preferred option for the British government or Brussels for that matter, it’s been more than 2-years in the making. There will be some hope of the British PM pulling a rabbit out of a hat over the course of today, but it doesn’t bode well.

The Theresa May deal is an option that appears to be the least popular, which suggests that a 4^th vote is unlikely to save the day. In contrast, Kenneth Clarke’s was the closest to getting through, but even the most popular alternative came up short.

Today’s emergency cabinet meeting will likely be an extended one and, following Theresa May’s threat of a General Election, only a few options remain.

If the Tory rebels continue to shy away from supporting Theresa May’s deal, and it does look that way, then hard Brexit it is. The only remaining alternatives would be a 2^nd referendum or a snap General Election.

It’s time to give the decision back to the voters that had favored to break away from the EU.

A General Election would almost certainly be the end of the Tory Party’s coalition government. So, a 2^nd Referendum could be the way forward. Almost ironically, the indicative vote for a second referendum saw the largest number of votes against…

The Pound

Unsurprisingly, the Pound suffered at the hands of Parliament overnight. However, when considering the increased likelihood of a hard Brexit, there was some resilience.

Perhaps there remains some hope of a resolution. If the 4-hour debate overnight is anything to go by, however, a resolution is the least likely outcome. The people’s vote has left the British economy in no man’s land and the government in disarray.

Expect plenty of volatility through the day and even more so through the European and U.S sessions.

A return to sub-$1.30 levels wouldn’t be unreasonable should updates from today’s Cabinet meeting fail to deliver a way forward.

At the time of writing, the Pound was down 0.23% to $1.30704.