Where now in the Brexit drama?

Political chaos looms large in Westminster, as the PM fights to get her Brexit plan through the Commons in order to push on with negotiations with the EU. 

EU flag
Source: Bloomberg

Amid all the Brexit turmoil last week, one anniversary passed with little fanfare outside of Number 10 Downing Street, and probably not with much more inside that residence. Theresa May has now been Prime Minister (PM) of the United Kingdom of Great Britain and Northern Ireland for two years, as of 13 July 2018.

The PM survived the resignation of two senior ministers last week, but it looks possible that her government may struggle to reach the summer recess. In a vote on the Chequers deal on 16 July, the government’s majority was cut to three. Had the vote not passed, a crisis could have ensued. One still might, if enough MPs can oppose any further votes on the white paper agreed by the government.

The best that can be said for Theresa May at present is that no one else really wants the job. Brexiteers and Remainers may carp from the sidelines but who among them would really want to take on the poisoned chalice of steering a Brexit vision through the Commons? And even now, no Conservative really wants to provoke a general election in order to get a new leader; the Conservatives got away with changing their leader once without going to the country, they will not dare try again. The only consolation of a Jeremy Corbyn government would be the fact that the Labour party is just as divided. It is merely the fact that they are in opposition that allows them to evade scrutiny.

Brexit

Find out what Brexit could mean for the markets and how a hard or a soft exit from the EU could affect traders.


There have even been calls for a new public vote on Brexit, most significantly by former minister Justine Greening, who has argued for a three-way question (hard Brexit, soft Brexit, no Brexit) based on first and second-preference votes. Both party leaders have ruled out a second vote however, so for now this suggestion looks dead in the water.

For now, the Chequers plan goes on, although amendments from Brexiteers in the 16 July vote may make it even less palatable to the EU. If this plan fails, Theresa May’s fate could be sealed, or she may have to declare that the UK is heading for a ‘no deal Brexit’. This would likely send the pound lower, and increase UK borrowing costs.

Brexit is turning out to be more difficult than perhaps anyone imagined. As the clock ticks down to March 2019, both sides are running out of time. 

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