Brexit – what happens now?

Late on Tuesday, Prime Minister Theresa May lost an MPs’ vote on her Brexit deal by 230 votes – the largest defeat for a sitting government in history.
The defeat was not unexpected – but it is what comes now that is becoming unpredictable.
MPs voted by 432 votes to 202 to reject Mrs May’s Treaty and Declaration on Britain’s exit from the EU on 29 March.  While the opposition parties might have been expected to oppose the deal, many pro-Brexit MPs in Mrs May’s own party felt her Treaty, which set out the terms of the departure left the UK too close to the EU. At the same time most pro-Remain Conservatives and all the opposition parties felt the Declaration, which holds out plans for the future, was far too vague.
Labour leader Jeremy Corbyn tabled a vote of no confidence in the government, which could have triggered a general election if it had been passed by the Commons.
Mrs May won the vote on Wednesday, by 325 votes to 306, giving a majority of just 19 but still enough to put the ball back in her court. She does not have much time to come up with anything too radical, and her options seem to be presenting parliament with the deal again and hoping they like it better the second time around, a different deal – if she can persuade Brussels to agree to some concessions – or no deal at all. A hard Brexit, which seems most likely to cause economic chaos suddenly starts to look more than a possibility.

What’s likely to happen?

The Prime Minister began urgent cross-party talks about a new approach as she worked on her own political survival but has not said what this might involve. In her statement to MPs after the result, she might have suggested that she was looking at a Norway-style soft Brexit and saying that she wanted constructive talks with Labour MPs. But she also said she remained committed to delivering on the result of the referendum.

With her own cabinet divided and her party split between Remainers, soft Brexiteers and No-dealers, she may need to get the support of the opposition for whatever move she now makes.

She survived the no-confidence vote, thanks to the backing of both the DUP and Tory MPs.  Unable to force a general election, Mr Corbyn will face intense pressure to commit Labour to supporting a second referendum. The pressure for a peoples’ vote from Tory backbenchers is also increasing. It may be the only realistic way to avoid crashing out of the EU with no deal.

The view from Europe

Europe was of course delighted about Mrs May’s defeat, and seemed to be holding out olive branches, rather than indulging in schadenfreude. Donald Tusk, the European council president, seemed to be calling for the UK to stay in the EU, saying that any departure deal now looked impossible. Germany’s EU affairs minister tweeted: “… EU’s door remains open.”

However, perhaps the most positive reaction to events earlier this week is from those campaigning for a second referendum. This would require the Brexit schedule to be put back – which Brussels would be almost certain to agree to – and another round of campaigning by both sides. Of course, as with most things to do with Brexit what the eventual outcome of a second vote might be is impossible to predict.

The one thing that you can be sure of – if you want help with managing your money in an uncertain world, you need expert advice. At Continuum we are ready to provide it – and help you look forward to a more prosperous future, whatever it holds.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

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