We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.
Hide

February

MPs show Theresa May little love in Valentine’s Day vote

Published: Friday 15 February 2019

By Adrian Bishop

It may have been Valentine’s Day, but UK MPs signalled their lack of love for Theresa May’s latest Brexit deal by defeating the government.

At the same time, Conservative MP, Anna Soubry, has pressured the government into publishing the official advice they have received over no-deal Brexit.

MPs defeated the government’s motion by 45 votes that “this House welcomes the Prime Minister’s statement of 12th February 2019; reiterates its support for the approach to leaving the EU expressed by this House on 29th January 2019 and notes that discussions between the UK and the EU on the Northern Ireland backstop are ongoing.”

Number 10 Downing Street says in a statement, “While we didn’t secure the support of the Commons this evening, the Prime Minister continues to believe, and the debate itself indicated, that far from objecting to securing changes to the backstop that will allow us to leave with a deal, there was a concern from some Conservative colleagues about taking no deal off the table at this stage.

“The motion on 29th January remains the only one the House of Commons has passed expressing what it does want – and that is legally binding changes to address concerns about the backstop. The government will continue to pursue this with the EU to ensure we leave on time on 29th March.”

Labour leader, Jeremy Corbyn, says the result demonstrates there is no majority for Mrs May’s proposals and “she cannot keep ignoring Parliament and ploughing on until the 29 March leaving date without a coherent plan to prevent a no-deal Brexit.”

A meaningful message

The Brexit debate may not have resulted in a Meaningful Vote, but it certainly sent a meaningful message to Europe and Theresa May.

The Prime Minister was not in the House of Commons after the defeat by 303 votes to 258, but it does mean she is likely to find it even more difficult to get an acceptable agreement with the European Union before the deadline.

The government lost the non-binding vote because nearly a quarter of Conservative MPs failed to back the motion with five voting against it and the rest abstaining, including many in the influential, right-leaning European Research Group. They believed the motion supported the ruling out of a no-deal Brexit.

MPs also rejected an amendment from Labour to force a new Commons vote on Brexit by 27 February and one from the Scottish National Party to extend Article 50.

Anna Soubry withdrew her amendment after the government agreed “to meet to identify and then publish the relevant papers detailing the devastating effect a no-deal Brexit will have on business’s and trade.”
 
European Union and British Union Jack flag flying together - Halo Financial

How is the Pound faring?

Following the votes, the Pound, which started the day against the US Dollar as high as $1.287 in typical Interbank rates, fell to a low of $1.2795 within the first hour of the result. Sterling has now regained some ground against the US Dollar and is hovering around the $1.28 level once more.

Halo Financial’s Founding Director, David Johnson, says, “We can expect more volatility in the Pound against the major currency pairing over the next few weeks, as it is still extremely uncertain how Brexit will play out. Aside from merely the Brexit effects, the global economy is slowing and that too will influence the Pound.”

Concern for UK business

Business leaders were again unhappy at the ongoing delay by MPs. Carolyn Fairbairn, Director General of the Confederation of British Industry, Tweeted, “Another day of failed politics, another day closer to no deal chaos. Politicians must find a deal that protects our economy. Failure would be unforgivable.”

What next?

Theresa May had aimed to “address the indefinite nature of the backstop, which under Article 50 is legally required to be temporary”, Brexit Secretary Stephen Barclay explained ahead of the vote.

"We do, as a Parliament, need to hold our nerve," he states, adding that the EU "share our desire" to have a deal.

Mr Barclay is informing European leaders of the decision and is due to return to Brussels for more talks.

He points out that in January most MPs said they would back a deal without the backstop. European leaders share the UK’s desire for a deal. “David Johnson commented that, “the sharp downturn in the EU economy and especially Germany’s, has focussed the minds of the EU negotiators and made it even more important that they retain access to the UK’s economy. Whether they will openly admit that or not is another matter.”

The vote result means that the next MPs’ Meaningful Vote, on Wednesday 27th February, becomes even more important.

If you’re concerned about Brexit uncertainty, get in touch with the team.
Keep up to date with currency markets
 
Request a call back

Preferences