By Halo Financial Team
The UK government has agreed to seek to safeguard citizens’ rights, whether or not there is a no-deal Brexit.
It accepted an amendment on Wednesday evening that if no deal is reached over Brexit, it will seek a deal from Brussels to protect the rights of British nationals settled in the EU and EU citizens in the UK.
As a result, the Pound hit a six-month high against the US Dollar and nearly two-year high versus the Euro.
But, Conservative MP, Alberto Costa, was forced to step down as a Parliamentary Private Secretary (PPS) to Scottish Secretary David Mundell, after tabling the amendment, even though the government later agreed to back it. It is convention that government members do not propose amendments on government motions.
The amendment “requires the Prime Minister to seek at the earliest opportunity a joint UK-EU commitment to adopt part two of the Withdrawal Agreement on Citizens’ Rights and ensure its implementation prior to the UK’s exiting the European Union, whatever the outcome of negotiations on other aspects of the Withdrawal Agreement”.
A spokesperson for Mr Costa says, “You will be aware that there is a longstanding convention that members of the government payroll, including PPSs, don’t table amendments to government bills. Clearly this is an issue that he feels very strongly about and so he has chosen to resign.”
Hours after Mr Costa resigned, Brexit Secretary David Lidington,
In view of the fact our political objectives are the same, the government will accept the amendment today and take it up with the commission.”
Pound’s rising star on Brexit hopes
Before the debate, the Pound rose from 1.323 to a high of 1.334 in typical mid-market rates – a six-month high. It was boosted by rumours that the European Union could demand an extension for British membership until December 2020. Immediately after the vote, the Pound remained above 1.33.
Against the Euro, GBP also rose strongly during the day, increasing from 1.164 early on to over 1.17 – nearly a two-year high - after the votes.
Ricky Nelson, Head of Corporate Dealing at Halo Financial, says, “The Pound has risen strongly against both USD and the Euro, as the market believes a no-deal Brexit is less likely. If this more positive sentiment continues, the Pound could make more gains.”
What were the amendments?
MPs again debated Brexit and considered five amendments, including the Cooper/Letwin amendment saying that if MPs vote to delay Brexit, the government should seek an extension from the European Union and bring forward legislation to change, in law, the date of the UK's departure. It passed by 482 votes.
It is not binding in the same way as an Act of Parliament, but is an expression of the will of the House and that would be politically difficult for Prime Minister, Theresa May, to ignore.
In any case, the amendment simply formalises the promises made by Mrs May the day before to allow MPs to prevent no-deal and seek an extension to exit day.
Labour MP Yvette Cooper says MPs have forced the government to change tack. No-deal Brexit is no longer the default option if the PM’s deal gets voted down.
Cabinet Office minister, David Lidington, says that if MPs vote to delay Brexit, the government should seek an extension from the EU and bring forward legislation to change, in law, the date of the UK's departure.
The UK will only leave the EU without a deal with "explicit" approval from Parliament. This is a commitment made by the prime minister "and the government will stick by them".
In the other votes, a Labour amendment instructing ministers to push for a permanent customs union with the EU, and a close relationship with its single market and other issues was defeated by 83.
A Scottish National Party amendment insisting that the UK should not leave the EU in any circumstances without a deal "regardless of any exit date". That was lost by 36 votes.
If you’re concerned about Brexit uncertainty, get in touch with the team.