You’ll have heard yesterday that Parliament “took back control” of the Brexit process, via the Oliver Letwin amendment, by 329 votes to 302.
This was (a) unprecedented, and genuinely big news, (b) a defeat for the government, and several Conservative government ministers resigned in order to support it.
This strengthens the possibility of a softer Brexit, possibly even another referendum and staying in the EU.
However, because of that it has prompted some hard Brexiteers to finally back Theresa May’s Withdrawal Agreement, including a figurehead of the Brexiteers, Jacob Rees Mogg.
Probably (everything is probably), this is:
- Strengthening for the pound (we’ve seen that this morning)
- Good for holiday home buyers in the EU and the world beyond
- Good for retirees in the EU
- Good for British travellers and business people in the EU
Why?
It allows MPs to find a plan for what happens next. A series of “indicative votes”, where MPs debate a range of options, including a second referendum, softer Brexit, etc, should start tomorrow (Wednesday).
This doesn’t mean that what they vote for will happen.
The government could, possibly, bring back the Withdrawal Agreement for a third vote. However, currently the hard Brexiteer ERG group and the DUP, and all the opposition parties, will still not vote for the Withdrawal Agreement, so it probably will not pass and will not become law. This could change, however, and some believe that it means the WA is more likely to pass.
If it doesn’t change and the WA still won’t pass, what will happen?
MPs can start to bring their own legislation to Parliament now, bypassing the government.
The vote makes a softer Brexit, potentially within the single market (such as the Norway model), more likely. Under that scenario, freedom of movement, free healthcare etc would continue for British people in Europe. But then they might under the withdrawal agreement anyway.
It makes no deal less likely.
Why?
Because while in theory if MPs haven’t voted for a version of Brexit we would leave the EU on 12 April with no deal, EU leaders are likely to trust MPs to deliver a softer Brexit, so should allow a further extension to at least May or June.
You might think that would boost the pound, however:
- It means that the Withdrawal Agreement and an orderly exit from the EU in May, followed by a two-year transition period, is less likely.
- It makes a general election more likely. It therefore makes a Labour government more likely.
- At the moment we could still leave the EU on Friday (29 March) but the Government has said it will pass legislation to stop that – and this will be passed.