Understanding the Brexit debacle


Brexit confusion continues, with the Prime Minister cancelling the Parliamentary debate on heragreement on Monday,  facing and winning a confidence vote on Wednesday and heading back to Brussels on Thursday.
It has been evident for weeks that her Brexit deal was not going to get through the Commons.
Things came to a head when, after being found in contempt of Parliament, the government was forced to publish the Attorney General’s full legal advice on the ‘backstop’; the compromiseover the border between Northern Ireland and the Republic of Ireland.
It revealed that the PM had been told the arrangement, to prevent a hard Irish border, could last indefinitely. The UK could not lawfully exit without EU agreement, which could be unlikely to be forthcoming.
It began to look as though Mrs May’s deal was in fact not Brexit at all, and that the UK could be trapped in Europe indefinitely with no right to withdraw.
The Scottish National Party said the PM had “concealed the facts” after the advice, the Democratic Unionists said this would be “devastating”. Labour and other opposition parties said ministers had “wilfully” refused to comply with the vote in the Commons which demanded full disclosure, suggesting a deliberate attempt to hide the key implication of her agreement.
A vote of confidence from her own party made it look on Wednesday that it was all over for Mrs May. But not only did she win – securing her position as party leader for at least a year – she may have gained a slightly firmer position for renegotiating with the EU.
She will need it.

What happens now?

Mrs May headed back to Brussels. There are a number of possible outcomes. 

1. No deal

The default is a no-deal Brexit. The UK will leave the EU on 29 March 2019. EU rules mean the UK must leave on that date.

Postponing the final decision – delaying Brexit – could be an alternative if all EU countries agree – which is possible, but not a given.

2. A new agreement

If Mrs May can renegotiate she could come back to Parliament with an improved deal. It is a big if. Mrs May cannot just hold repeated votes in the hope of getting the answer she wants.

3. No Brexit

After two years of campaigning by both sides, and the apparent impossibility of getting a deal to suit everyone, scrapping Brexit now might seem more appealing than it did.

Last weekend the European Court of Justice ruled that the UK can cancel Brexit without affecting the current terms of Britain’s membership. Brussels would be ‘prepared’ or more likely ‘delighted’ to consider welcoming the UK back into Europe.

This might look like a turnaround for the EU policymakers – it was certainly timed to trigger careful thought before the proposed parliamentary debate.

This would probably need a new referendum to ensure that the will of the people is done.

This might be the best solution for politicians. Another referendum could show that the UK is happy with the current deal, wants to leave under something like the Norway Plus arrangements – or has lost its taste for Brexit altogether.

The problem? There is little time for the statutory referendum period before a vote, and new legislation would be required which would take us past the March 29 deadline and probably into the summer.

We currently don’t know what the future holds. The one certainty is that, Brexit or not, professional help for your finances could start with a call to Continuum.

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.

Book a free initial consultation

Book an initial consultation with one of our independent financial advisers or call us on 0345 643 0770 if you would like to discuss further.

Sources:

bbc.co.uk – MPs continue debate on Brexit deal

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