Brexit – what is happening now?

It is often said that a week is long time in politics. With the commons now having just 15 of its normal working days until the scheduled date for our departure from Europe on 29^th March, it has certainly been a busy week for the Brexit debacle.

Last Sunday, Mrs May announced that MPs will get another vote on her deal by 12^th March, while insisting that leaving as planned is still “within our grasp”.

But the prime minister is facing growing calls to say she would delay Brexit rather than leave the EU if no deal is in place by the end of March.

On Monday, Labour tabled an amendment on laying out its own Brexit plan – one which backs a permanent customs union with the EU and a close relationship with its single market – to MPs. The stated aim of the party is to aim for a second referendum to “prevent a damaging Tory Brexit being forced on the country”.

On Tuesday, the Prime Minister responded by saying that if her withdrawal agreement fails to get parliamentary support on 12^th March, she will offer the house two options.

The first is a vote on a no-deal Brexit. If that fails – as it almost certainly will – MPs will be able to vote on requesting an extension to the two-year Article 50 negotiation process to delay EU withdrawal beyond 29^th March.

What happens now?

There is a growing resistance to a hard Brexit from all parties – but with no consensus on Mrs May’s ‘Chequers’ deal, there is a real possibility that the UK could crash out of the EU on the 29^th of March.

The UK is unprepared for hard Brexit. There have been trade deals with Switzerland and others, and President Trump has made some moves that could be positive, but progress is slow, and negotiations have apparently run into problems with Japan and China.

It looks as though if we are going down the hard Brexit route, the negotiating teams may need the extra time.

But there is another possibility; that Mrs May is playing her cards carefully to get her agreement through parliament. Labour leader Jeremy Corbyn has suggested she was running down the clock until MPs were forced to choose between her bad deal and a disastrous no deal. This can be seen as a cynical piece of political chicanery, or masterful statesmanship, depending on what side of the house you sit.

What will happen next?

The prime minister is still holding talks with EU leaders. If she can get further concessions on the Northern Ireland backstop – the main sticking point for many when it comes to her Brexit deal – it could yet go through on the 12th.

The brinksmanship approach could be effective against the EU as well as MPs. Although they will of course not admit it, the EU has a great deal to lose in the event of a hard Brexit.

In the past, Mrs. May has resisted any suggestion of postponement which would antagonise hardline Brexiteers who want the UK to leave as planned, whatever the cost.  But it might provide more time to negotiate a deal, and to put pressure on those who are holding out against the current proposals.

What should you do?

Hard, soft or delayed Brexit, there will be an effect on your own economic outlook. The UK economy may be currently held back by uncertainty, and any decision might provide a boost.

However, in uncertain times, it pays to be prudent, and you may want to look at your investments to ensure that they are properly diversified. Some investors may have taken holdings in companies based overseas – although you should look at your own plans with an expert to ensure they are the best solution for you.

Naturally, at Continuum, we would be very happy to help.

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.

Sources:

bbc.co.uk – Brexit: Theresa May under pressure to consider Brexit delay – 25th February 2019