UK: What’s next after a better day for the PM - ING

James Knightley, chief international economist at ING, suggests that yesterday it was another tumultuous day in Brexit land, which concluded with Parliament voting in favour of sending Theresa May back to Brussels to get a “better” withdrawal deal.

Key Quotes

“In another rare victory for the Prime Minister, amendments that would have given Parliament the power to delay Brexit (by extending Article 50) if a no deal Brexit appeared likely, were voted down.”

“The result is that in the coming days the Prime Minister will be seeking a “significant and legally binding change” on the Northern Ireland backstop that would prevent the UK being tied indefinitely to EU rules.”

“New wording that facilitates this would then be put before the UK parliament with the expectation that this would pass and Brexit could proceed. But with the EU refusing to countenance a situation that could potentially lead to a “hard” Irish border, requiring customs and regulatory checks on goods and possibly passport checks for people, it will be challenging to say the very least.”

“What next?

The next step is for Parliament to vote on what the PM returns with from Brussels by February 14. If the Prime Minister fails to get changes on the withdrawal agreement then this will again open up the possibility for amendments that offer the opportunity for altering the course of Brexit with Article 50 extensions and potential parliamentary votes on alternatives, such as a “softer” Norway style agreement or even a second referendum. However, the risk remains that politicians still haven’t coalesced around a plan of action for Brexit and the uncertainty continues.”