Where next for Brexit?
As we write the market appears to be pricing in an increasing likelihood a no-deal Brexit can be avoided with sterling largely holding on to the gains it has enjoyed in 2019.
As a reminder, strength in the currency reflects hopes that the market’s preferred outcome of a softer, or at the very least, orderly exit from the EU will be achieved.
For now, Theresa May seems committed to a tweaked version of her Brexit deal despite the heavy defeat it suffered on 15 January.
A vote on 29 January will not be on a revised version of this deal, prompting accusations from some quarters that May is running down the clock to hold MPs feet to the fire and get them to approve her plan to avoid a no-deal outcome.
Instead it will be a ‘neutral’ motion to which backbenchers from across the House of Commons are already busily adding their own amendments.
In summary these are aimed at:
– Stopping a no-deal Brexit by extending Article 50 beyond 29 March
– Giving parliament greater control of the whole process
– Offering a vote on Labour’s plan for membership of a customs union, single market alignment and protections on the environment and workers’ rights as well as the option of voting on a second referendum
– Providing a series of indicative votes which would indicate which option can command parliamentary support
Other possible amendments which could be in the offing might include an attempt to force a second referendum and to limit the Irish backstop – one of the key apparent sticking points for Brexiteer MPs.
Crucially these amendments will not be legally binding, however if any secure majority support there would be political pressure on the government to act in accordance with MPs wishes. The Speaker will decide which amendments are voted on.
Chancellor Philip Hammond told business leaders in a conference call MPs would block a no-deal Brexit, though this has been contradicted, at least in public, by the Government.
With guidance for a second vote on a Brexit deal to take place in mid-February there is little sign of the clarity craved by the corporate world and investors being forthcoming.
Asset manager Rowan Dartington’s technical investment manager Donald Maxwell-Scott says: ‘Even though it shouldn’t be ruled out, we don’t believe that we will end up with a no-deal Brexit.
‘An election is also unlikely as the government won their vote of no confidence. This also reduced the chances of a second vote on Brexit.
‘A Norway plus deal is also unlikely, although this would solve the problem of the Irish backstop. Given that the government remains in power after the vote of no confidence then the only way forward would be further amendments to Theresa May’s deal.’