Sterling firms after Brexit Party candidates pulled from Tory seats

12 Nov 2019

Philip Shaw, Victoria Clarke, Ryan Djajasaputra and George Brown

Investec economists

Brexit news, insights and analysis, and how it could affect you and your business, from the Investec economics team

Tuesday 12 November 
Sterling was firmer yesterday after Brexit Party leader Nigel Farage announced that his party would not contest the 317 seats won by the Conservative Party in 2017 in the upcoming December election. Although the Brexit Party had pushed for a “Leave alliance” with the Conservatives, such efforts look to have petered out.
Mr Farage announced that he had taken the decision “unilaterally” after judging the Prime Minister had recently signalled a "big shift of position" in his approach to Brexit, citing the Boris Johnson’s pledge not to extend the transition period and the renegotiated Political Declaration as examples.
Note also that Mr Farage has not ruled out making further concessions; after being asked whether this was his final offer, the Brexit Party leader replied “I haven’t even considered that at this moment in time. I’ve just taken 48 hours to make this decision. Allow this one to settle first”.
However, the deadline for candidates to submit their nomination forms is Thursday, so Mr Farage will have to decide quickly if he is to shift his position further. But though UK risk sentiment was supported amid signs that the Conservatives would have a less obstructed run in the upcoming general election, the Brexit Party is still planning on taking on Labour-held constituencies.
This may well split the ‘Leave’ vote in target seats that Mr Johnson is aiming to capture in his bid to win a parliamentary majority. Note also that this is in addition to the other challenges that the Conservatives face, including being squeezed by the SNP in Scotland and the Liberal Democrats in Southern England.
With just over four weeks to go under the general election, we cannot say with conviction that the Conservatives will gain a large or even small majority.

UK election on 12 December

Wednesday 30 October
Last night the House of Commons voted overwhelmingly by 438 to 20 for a General Election on 12 December. This was the result of the government’s "one-line" bill and followed its failed attempt to call an election using the Fixed-term Parliaments Act on Monday evening.
This time Jeremy Corbyn and a majority of Labour MPs backed an election. As this will be an Act of Parliament, it requires consideration by the House of Lords today, but it is thought that the Lords will not try to obstruct or amend the bill. Royal Assent is then expected by Friday and Parliament will be dissolved next week. In terms of opinion polling, the Tories have gained in recent weeks and on average are leading Labour by 12-13 per cent.
However, the party is under pressure in London, the south-east, the south-west and Scotland and needs to win seats from Labour in the Midlands and the North to gain an overall majority. Note that PM Johnson restored the party whip to 10 of the 21 rebel MPs who were expelled a few weeks ago. 

Early election plan voted down

Tuesday 29 October
Last night, Prime Minister Boris Johnson failed in his third attempt to secure an early election under the Fixed-Term Parliaments Act (FTPA). His push for an election on 12 December was defeated 299 to 70, falling well short of the 434 (i.e. ⅔ of all 650 MPs) needed under the Act to trigger an election, with the Labour party abstaining.
But Mr Johnson is set to try again today to bring about an election on 12 December, albeit through the use of a one-line bill which would circumvent the FTPA by only requiring a simple majority to pass. He has previously been hesitant to go down this route as such a bill would be amendable. Note also that House of Commons Leader Jacob Rees-Mogg confirmed last night that the government will not bring back its Withdrawal Agreement Bill (WAB).
Crucially, this satisfies a key demand of the Liberal Democrats and the SNP who are pushing for an alternative polling day of 9 December in the belief this would allow more students to vote in their university towns. It is unclear at this stage whether the Liberal Democrats and/or the SNP will be willing to back the bill, having insisted that the pledge to not re-introduce the WAB be copper-bottomed.
But the Financial Times reports this morning that Downing Street officials admit that the government will probably have to compromise on the date of the election and that a “landing zone” between 9 and 12 December could be found. 

PM pushing for a December election

Monday 28 October 
The EU27 is close to granting the UK a third Brexit extension to 31 January, having reached the conclusion last week that Westminster cannot pass the negotiated deal before this Thursday (31 October).
An official announcement from Brussels in that respect is expected this morning. PM Boris Johnson plans to pass a motion this evening  to call an election for 12 December, but under the Fixed-term Parliaments Act he needs a two thirds majority of MPs to back him, a total of 434. Mr Johnson has tried (and failed) this route twice already and success this time looks similarly unlikely.
An alternative is that a Lib Dem/SNP inspired motion for an election on 9 December is allowed tomorrow, which would only require a simple majority, therefore not requiring the bulk of Labour MPs to vote in favour. Number 10 Downing Street has dismissed this a ‘gimmick’ but reports suggest that it is being taken seriously by the Government. Note that the Prime Minister’s push for a December election has seen the 6 November Budget postponed. 

Is there another Brextension on the horizon?

Thursday 24 October
EU ambassadors are still currently debating whether to grant a Brexit extension, though it is highly unlikely they won’t. French President Emmanuel Macron is understood to be pushing for a minimal extension of just two weeks, with the view that anything longer could undo the progress that has been made over the last fortnight.
While others, such as German Chancellor Angela Merkel and European Council President Donald Tusk, are looking to grant the full extension as per the UK request, to 31 January. This might potentially come with a clause such that, should the deal be ratified prior to this date, the UK could leave the EU before the deadline. Donald Tusk is expected to make the announcement tomorrow if an agreement has been reached, if not then the European Council may meet on Monday to force a decision.
If the extension to 31 January is granted, Prime Minister Boris Johnson is likely to push for a General Election in late November, with opposition leader Jeremy Corbyn also now coming to the view Labour will have to back an election motion once a suitable extension is granted, though with many in Labour also said to be opposed to this.
There is speculation that Johnson could make a third attempt at triggering an election as early as today. What is confirmed for today however, is the vote on  the government’s agenda that was laid out in the Queen’s Speech, expected around 17:00 in the House of Commons.  

Brexit in Parliament last night

Wednesday 23 October
Prime Minister (PM) Boris Johnson won the important “second reading” vote on the Withdrawal Agreement Bill (329-299). The result that shows Parliament now has a majority of MPs in favour of the PM’s Brexit deal.
However the joy for the PM was soon wiped away as the subsequent “programme motion” vote was defeated by  322 votes to 308, showing Parliament objecting to Mr Johnson’s plans to rush the legislation through Parliament with only limited time for debate.
Frustrated with this, the PM has now said he will “pause the legislation” whilst he waits to see how the EU responds to the extension request on the Brexit date, which was submitted to the EU at the weekend. EU Council President Donald Tusk tweeted  last night that he has recommended that the EU27 accept the UK’s extension request, but it is the length of any extension request that will be critical in determining what the PM’s next move will be.
It is not clear that even a fungible extension which would set out a period to 31 January, but allow an earlier exit after appropriate ratifications, would be enough to dissuade him from pushing for an imminent General Election – with Johnson seeming to favour just a 10-day extension, at most.
As we have said many times, the Fixed-term Parliaments Act does add hurdles to the triggering of a General Election and opposition leader Jeremy Corbyn might instead favour a renegotiation of the Withdrawal Agreement Bill timetable, rather than handing Mr Johnson an election on his timetable. All that said, the prospect a near term election remain probable, with a December vote still in focus, though we note also that there is continued talk of a Spring 2020 poll too. 

Brexit in Parliament – today and timetable forward

Tuesday 22 October 
Today the Withdrawal Agreement Bill (WAB) will get its ‘second reading’ in the House of Commons, after the Bill was introduced last night. Reports indicate that no.10 is quietly confident of winning the second reading vote. If the vote is won, the Bill will then be progressed into the Commons Committee stage, where more controversy will come into the mix.
In Committee stage, various amendments (such as on a confirmatory referendum being attached  or a requirement to compel the PM to negotiate a customs union future arrangement) will be proposed and potentially voted on. After committee stages, the Bill will go to third reading, currently touted for Thursday night and even after that the Lords then needs to go through the same stages and the Commons consider any amendments passed by the Lords.
In short, there is quite a road to travel before the Bill sees its way into law, with the current Brexit date just over a week away. With the second reading vote seemingly set to pass, the most critical vote today looks set to be on the 'programme motion' which will determine the parliamentary timetable for the Bill. If the government’s timetable proposal is defeated, then it is unlikely the Bill will pass the necessary stages in time for an EU exit on 31 October.
The EU will then likely respond to the UK’s extension request, faced with a much clearer prospect of the UK being unable to complete the necessary processes ahead of the deadline. This will further heighten speculation of a near-term General Election, as PM Johnson eyes a route to getting a clearer mandate to pass his Brexit deal. In terms of timing for today, the second reading vote is expected about 7pm, with the Programme Motion vote immediately after. 

No meaningful vote four (MV4) today

Monday 21 October
No meaningful vote four (MV4) today: Speaker of the House of Commons John Bercow has ruled out a fourth meaningful vote happening in Parliament today. As such the next step will be the presentation of the Withdrawal and Implementation Bill which will go for debate (2nd reading) in the House of Commons from tomorrow.
As such it now looks as if Parliament’s agreement, or not, with Prime Minister Boris Johnson’s Brexit deal with be tested in subsequent votes on this legislation. Given the scope for such discussions to get side-tracked with various amendments (particularly on a confirmatory referendum being attached and on customs union proposals), it may therefore take longer for the will of Parliament to be known.
In the meantime, expect Brussels to slowly mull over the UK’s Brexit extension request that was delivered on Saturday. Sterling is little changed after the news, after an initial dip, now at $1.2994.

Saturday's special sitting leads to further delay

Monday 21 October 
Saturday's special sitting of Parliament, designed to help Johnson get Brexit over the line by 31 Oct, has in fact provided further delay. No 'meaningful vote' was held in the House, thanks to an amendment to the Benn Act from Oliver Letwin.
This subsequently required the Prime Minister to send a letter to the EU requesting an extension, though he did not sign it. Thus far there has been no official response from the EU, though Donald Tusk confirmed receipt of the letter and said he would begin discussions with European leaders. With 'no-deal' at seemingly lower risk still, despite the delay, sterling is holding up at $1.2909 currently.
For today, the key focus will be on whether Mr Johnson's government gets another shot at holding a fourth meaningful vote and on the "programme motion" which, whilst sounding overly technical, would importantly clear the pace for the legislation to be discussed and progressed. On both fronts, there looks to be scope for the PM's plans to get tied up in opposition amendments and objections. 
Friday 18 October 
Last night the EU Council formally endorsed the deal agreed between the UK and EU and it is now left to the UK government to get it approved in the fourth meaningful vote (MV4) in Parliament tomorrow (Saturday). It is not clear how the numbers stack up.
MV3 was defeated by 58 votes, so a net 30 MPs is required for MV4 to pass through. Importantly the 10 DUP MPs are currently set to vote against it, though the government will no doubt be under discussions to offer it some sweeteners in exchange for their support. A number of the 28 Tory ERG MPs that voted against MV3 have suggested they will back the government tomorrow, although there is a danger that Conservatives that previously backed a deal will now vote against it. 
Boris Johnson will no doubt be persuading various Labour MPs to back it – 5 fell in behind MV3 in March. We suspect, but cannot be confident, that MV4 will be approved tomorrow.

Pound surges after UK and EU agree Brexit deal

Thursday 17 October 
News from Brussels this morning confirms that a deal between the UK and the EU has been reached over the UK’s exit from the European Union. This has been confirmed by both PM Boris Johnson and Jean Claude Juncker, who has stated that he will recommend that the European Council endorse the agreement later this afternoon.
In all likelihood this will mean that the government will put the deal to the House of Commons this Saturday for a vote. The full details of the arrangement are yet to be made public and the DUP’s exact position remains somewhat unclear given some reports that they are on board with the deal and others that they still have reservations.
Sterling has risen strongly, now trading at $1.2940 against the US dollar and 85.9p (€1.1627) against the euro.

Pound falls sharply amid uncertainty over support for Brexit deal in Commons

Thursday 17 October 
Brexit negotiations continued throughout the course of yesterday and reportedly reached an advanced stage with all but one of the outstanding issue having supposedly been resolved. Today’s papers suggest that the single remaining issue remains how VAT will be treated in Northern Ireland under the revised Irish protocol, with the latest proposals reportedly based on it remaining in the EU's VAT area.
But the Prime Minister has been delivered a blow this morning after the government’s confidence and supply partners the DUP signalled it “could not support what is being suggested on customs and consent issues”. Uncertainty over whether the deal will pass a ‘meaningful vote’ in the House of Commons has seen the pound fall sharply this morning, with cable dropping 60 pips to $1.2757 on the news.
Looking ahead to the two-day European Council Summit which kicks off today, the Prime Minister is scheduled to arrive in Brussels shortly before 2:00pm. In focus today will be whether negotiators are able to overcome the final hurdles to present a legal Brexit withdrawal text today and if the DUP can be persuaded to support the deal in a possible meaningful vote on Saturday.

Brexit talks resume ahead of EU Summit

Wednesday 16 October 
Brexit talks are set to resume later today after they ran into the early hours of the morning as negotiators race against the clock to produce a draft legal text of an agreement for the European Council Summit (17-18 October). Reports overnight suggest the two sides are close to reaching an accord, but one that hinges on whether the UK will accept a customs border in the Irish Sea while keeping Northern Ireland inside the UK’s customs union.
Crucially, this will be dependent upon whether this can be supported by the DUP (the government’s confidence and supply partners) as well as the eurosceptic ERG in any ‘meaningful vote’ given that the two have previously voiced opposition to an Irish Sea customs border.
In an effort to win them over, the Prime Minister, Boris Johnson, held meetings with the DUP and the ERG at Downing Street yesterday evening. Following these talks, head of the ERG Steve Baker concluded “I am optimistic it is possible to reach a tolerable deal that I am able to vote for” but the DUP still appear unconvinced after stating that “gaps remain”.
Looking ahead, a key moment today will be EU Chief Negotiator Michel Barnier’s briefing to EU ambassadors, which is expected at around 1:00 pm London time. Beyond this, Mr Johnson will convene his Cabinet around 4:00pm before then speaking to the 1922 Committee of backbench Tory MPs around 7:30pm.
Markets have reacted positively to signs that an agreement is within touching distance, with sterling now trading at around $1.2790, the highest since May this year.

‘More time’ needed to broker Brexit deal, says EU

Tuesday 15 October 
There has been an absence of concrete news from negotiations in Brussels over the past 24 hours and more talk of the gaps to be closed if there is to be any hope of a deal, ahead of the EU Summit later this week (17-18 October). Indeed, the Finnish PM Antti Rinne (with Finland holding the EU Presidency currently) said explicitly last night that “more time” was needed.
As such there is continued talk of a further last-minute Summit being arranged to discuss Brexit on 29-30 October, while the focus of the Brexit talks later this week is said to be on the shape of any extension. Domestically, Boris Johnson has postponed today’s Cabinet
meeting to give negotiators another day before they have to report back to his top team.
Today Brexit Secretary Stephen Barclay is set to make an unscheduled visit to Luxembourg to see European affairs ministers at the General Affairs Council. This morning, we await comments from Brussels' chief negotiator Michel Barnier who will update EU27 ministers and speak to the press afterwards.

Optimism for deal subsides after a weekend of intense talks

Monday 14 October 
After the optimism over a possible Brexit deal at the end of last week, the mood this morning is more hesitant ahead of the 17-18 October EU Summit. After intensive talks over the weekend, Brussels is still puzzled over the UK’s customs proposals, which would see Northern Ireland stand in a UK customs territory with goods charged appropriate tariffs, depending on whether they head into the Republic of Ireland or not.
EU negotiators are confused over how this would work and concerned that the model would leave the bloc vulnerable to fraud, in the absence of a hard border. As such, it appears that are quite sizeable differences still to be narrowed if a deal is to be struck at the Summit later this week. Talks will continue today, but there is also discussion of an additional Summit taking place 29-30 October to give a bit more time for a deal to be reached.
Additionally, questions remain over whether, if a deal is struck, Mr Johnson can secure the passage of this through UK Parliament, given more euro-sceptic Tory MPs have been less comfortable with the direction of movement of proposals over recent days.
Today marks the State of Opening of Parliament as the government presents its legislative program, with debate set to follow on this, most likely next week. Also of note will be Parliament’s special sitting on Saturday (19 October). Here Parliament will either be discussing a deal, if there is one, if not debating other options including other options, including the extension which is mandated to occur from that point, under the Benn Act.

Johnson and Varadkar agree they ‘can see a pathway to a possible deal’

Friday 11 October 
Prime Minister Boris Johnson met with the Irish Taoiseach Leo Varadkar for Brexit talks yesterday at Thornton Manor in Merseyside. After two hours of discussion, the two leaders “agreed that they could see a pathway to a possible deal”.
Mr Varadkar went on to describe the talks as “very positive and very promising”, adding that a new Brexit agreement was “possible” by the end of the month. So far no detail has emerged about what movement was made by either side, but the positive readout of the talks has served to reassure investors that a deal is not as elusive as previously thought. Sterling has surged on the back of the news; it has gained over two cents against the US dollar to currently trade at $1.2448, while versus the euro it has strengthened from 90p to 88.5p.
Focus will now turn to a meeting between Brexit Secretary Stephen Barclay and EU Chief Negotiator Michel Barnier today in Brussels which is set to commence at 8:00am London time and expected to last around 90 minutes. Talks are set to centre on the understanding reached between Mr Johnson and Mr Varadkar yesterday and will determine whether the EU believes they can form the basis of a deepening of the negotiations.
But despite the recent positive progress, we still judge it would be a herculean task to renegotiate a deal with Brussels in time for next week’s European Council Summit (17-18 October) to avoid the need to ask the EU for a third Article 50 extension on 19 October.

Johnson to meet Varadkar in bid to break Brexit impasse

Thursday 10 October 
Boris Johnson and Leo Varadkar meet face to face today in an attempt to break the impasse on a new deal. This may prove to be a tad ambitious. The EU27 has not responded positively to the UK’s proposals last week, objecting to the specific mechanism whereby NI gives ongoing consent to the arrangements and more importantly, to the UK’s plan whereby NI forms part of the UK’s customs territory, necessitating a customs border on the island of Ireland.
There is talk of a counterproposal from the ‘27’ whereby the UK enters a customs arrangement similar to that of Spain and the Canary Islands. However this would involve a customs border along the Irish Sea and is likely to be rejected by Westminster. Unless something dramatic happens soon, an accord will remain out
of sight this week and the UK will request a third extension on the 19th, or very soon after. Indeed it was announced yesterday that parliament would sit on 19 October, the first Saturday session in the Commons since 1982.
Separately Jeremy Corbyn is reported to be defying a large number of his MPs by pressuring them to back an election, if and when an extension is granted by the EU. On that subject, the PM assured the ‘One Nation Group’ Tory of MPs that he would not be fighting a general election on a platform of ‘no deal’.

Mood sours as Brexit negotiations reach a dead end

Wednesday 9 October 
Yesterday the mood over a possible Brexit deal ahead of the EU Summit (17-18 Oct) took on a notably more downbeat tone, with various UK and EU officials suggesting that negotiations were reaching a dead end.
This at least partly seems to be driven by a frosty call between PM Boris Johnson and German Chancellor Angela Merkel. Time remains, but it looks likely that the talks that David Frost had been undertaking in Brussels this week will not be continued today.
Meanwhile, a meeting between Boris Johnson and Leo Varadkar later this week (Thursday or Friday) looks to be a last-ditch attempt to reach a deal. But the general feeling is that these will be unfruitful, given the position Dublin has taken over the UK’s latest proposals. 
It has even been suggested that Boris Johnson may not even attend the EU Summit should an agreement not be reached. The result has been a number of accusations traded between the UK and the EU over the blame for the lack of progress. In the absence of any reversal in fortunes and an agreement being reached between the UK and the EU, it is looking increasingly likely that the Prime Minister will be forced into requesting an extension to the 31 October Brexit date (as mandated by the Benn Act).
Despite this legal assurance, a deal is seemingly further away than ever before and it is impossible to rule out a disorderly departure. 
Should the UK enter into another extension, a general election, possibly in mid-December, looks an increasingly likely outcome. Certainly there is already an air of an election in Westminster, with reports this morning suggesting that there are some differences in opinion over the party’s Brexit stance within any Conservative Party manifesto, with up to 50 Tory MPs unwilling to support any manifesto which pledged to pursue a no-deal Brexit.
The market reaction to the latest Brexit developments has been a renewed weakness in sterling, with GBP:USD just about holding onto the $1.22 level this morning.

Government to propose ‘customs clearance sites’ to replace backstop in Ireland

Tuesday 1 October 
The week will see the government put forward its formal proposals on how it plans to address the renegotiation of Brexit. Reports suggest this will be on Thursday following the end of the Conservative Party Conference tomorrow.
While will still don’t know the full detail, the outline of the government’s proposal to replace the so-called backstop centres on an ‘all-Ireland’ special economic zone for food and agricultural products. This would effectively see the necessary regulatory checks being carried out at “customs clearance sites” away from the border in the Republic of Ireland and rely heavily on technology to track and trace shipments, in a proposal that sounds remarkably similar to the Theresa May’s maximum facilitation plan.
According to the Financial Times the proposal also reportedly contains a transition period that runs until 2022 in order for the technology to be implemented. To date the plans only appear to cover agricultural and food products but there have been some suggestions that the plans could be widened out to manufactured goods as well, but that would be dependent on the consent on Stormont when it reconvenes.
However what we don’t yet know, is how the government plans to deal with customs arrangements, an area where the DUP is resolutely opposing any idea that would see customs checks being imposed across the Irish Sea. Ultimately how these Brexit proposal are received in the EU this week could be crucial in determining the likelihood of the UK reaching an agreement with the EU at the 17-18 October EU Summit. 

Prorogation of Parliament ruled unlawful

Tuesday 24 September
Today the Supreme Court ruled that the Prime Minister’s prorogation of Parliament was unlawful after having concluded that it was indeed a matter for the courts. In a statement explaining the decision, Lady Brenda Hale argued that it was “not a normal suspension of Parliament” and that no reasonable justification had been put forward by the government.
It ruled that the prorogation should be quashed but that it would be for the speakers of Parliament to decide on what steps to take. Note that House of Commons Speaker John Bercow has already said that MPs should “convene without delay”.
Meanwhile, Prime Minister Boris Johnson is currently in New York but we should hear his response around midday when he is set to attend a televised breakfast event.
Market sentiment has been bolstered by the ruling with sterling climbing sharply to $1.2486 in the immediate aftermath. Though it has since pared its gains to now trade at $1.2448, it is still 0.2% up on the day.

EU marvels at Johnson’s ‘Hulk’ comparison

Monday 16 September
The past weekend has been yet another busy one for Brexit news. One major focus has been talk of Boris Johnson defying the legislation which would force him to ask for an extension rather than accept no-deal, from 19 October.
Here PM Johnson’s parallel with the Hulk grabbed many headlines as he said “the madder Hulk gets, the stronger Hulk gets”. However, despite this talk there is more speculation that Mr Johnson is working towards a deal and looking at proposals to replace the backstop mechanism.
The PM is in Luxembourg today meeting European Commission President Jean-Claude Juncker, with other key advisers. Aside from the press that went to former PM David Cameron’s memoirs, the defection of Tory MP Sam Gyimah to the Liberal Democrats served as a reminder that Mr Johnson’s headache over divisions in his party are not over.
The Liberal Democrat party conference at the weekend confirmed speculation that the party would now move forward on a platform of campaigning for a revocation of Article 50. Coming up we have the Labour party conference over the coming weekend and into next week.
Finally, the Supreme Court is set to rule tomorrow on the legality of the decision to prorogue Parliament, which is now suspended until 14 October. Depending on the ruling, this could lead to Parliament being recalled and potentially then a second prorogation, kicking off another political storm.
At its current standing, sterling is holding onto gains from the perception that no-deal risks look to have lessened after the passage of the recent legislation and that a deal might be within reach. Indeed, cable is at $1.2475 this morning.

Signs of a DUP Brexit compromise?

Friday 13 September
Various reports suggest that the DUP is softening some of its red lines on the Irish backstop. In particular, the party is said to be considering accepting an alignment with EU rules on animal and agricultural products, providing that NI institutions are able to scrutinise EU legislation.
It is not clear how far the DUP is willing to shift its position on other goods. And of course, the thorny issue of customs checks will need to be addressed. But the direction of travel is positive and there is a related rise in sterling, which is currently trading a little above $1.24 and at 89.4p against the euro.

Parliament prorogued after PM loses bid to trigger early General Election

Tuesday 10 September
Prime Minister Boris Johnson lost his second attempt at triggering an early General Election yesterday after he failed to achieve the backing of 434 MPs (two-thirds of the 650 MPs), as required under the Fixed-term Parliaments Act.
Many Labour MPs abstained in the vote as expected, with only 293 votes, mainly Conservative, in favour of the early poll. In other unhelpful developments for the Prime Minister MPs passed a motion requiring Mr Johnson to hand over emails and call records related to no-deal Brexit planning and over the suspension of Parliament.
The prorogation came into effect in the early hours of this morning, with the Brexit extension legislation (to avoid no-deal on 31 October) having become law on Monday. MPs will now break from Westminster until October where the Queen’s Speech will mark the opening of a new Parliamentary session on 14 October.
Between now and then PM Johnson will be considering his options that could help him stick to his ‘do or die’ pledge to leave the EU on 31 October. Options said to be under consideration including
  1. Writing the extension letter, and then writing another expressing his view that he did not wish to make an extension request;
  2. Using emergency powers to annul the act;
  3. Resign and force Jeremy Corbyn into a position where he has to make any extension request; or 
  4. Ignore the new Act. 
None of the above look to be straightforward or even perhaps possible legally. For now though we may get a period of quiet as the PM considers his options and in the build up to party conference season.

Another chaotic week in Parliament?

Monday 9 September
After a chaotic week in Parliament, Brexit is set to dominate the political scene this week as well, particularly given that Parliament will be suspended (prorogued) until 14 October some time between today and Thursday. After last week’s fast tracking of the opposition/Tory rebel bill to extend Article 50 by 3 months, it is set to receive Royal Assent today. 
There were some question marks  over whether the government would take an unprecedented line and ignore the law, particularly in light of Boris’s comments that he would ‘rather die in a ditch’ than request an extension. But the reports this morning suggests that the government may toe the line and abide by the law. 
A further consequence of the extension bill passing for Royal Assent is that the government is set to table another general election motion today. However as with last week’s election attempt, that looks set to fail.
In terms of the rest of the political calendar for today Boris Johnson will be visiting Irish Prime Minister Leo Varadkar in Dublin, it is unlikely that there will be much progress on the Irish ‘backstop’ issue, with Mr Varadkar being quoted over the weekend saying that he did not expect any breakthrough.
Lastly, the bad news continued for the Prime Minister over the weekend, with Amber Rudd announcing her resignation. That followed Boris’s brother Jo Johnson’s resignation on Friday, leaving the government now 45 short of a majority, which is an untenable situation in the long term.

Anti no-dealers take control of Parliament

Wednesday 4 September
Boris Johnson’s defeat in Parliament last night means that anti no-dealers will take control of the order paper today and seek to legislate for a three-month extension to avoid a no-deal Brexit, if no deal is reached before 31 October.
A total of 21 backbench Conservative MPs crossed the aisle to defy the government, including Father of the House Ken Clarke, former Chancellor Philip Hammond and Winston Churchill's grandson Sir Nicholas Soames. All 21 have now been stripped of the Tory whip and will sit as independents in the House of Commons.
Mr Johnson’s government has now tabled a motion for an early General Election, unhappy that he considers his hands are now to be tied in Brexit negotiations by legislation which takes no-deal off the table. However, while Labour has been keen to see a General Election, there are doubts whether Labour will back the General Election motion today as they seek to tie Mr Johnson’s hands with the anti no-deal legislation first.
The challenge for the anti no-dealers is to get the legislation passed as quickly as possible, before Parliament is dissolved next week. Meanwhile there are some signs that steps are being taken by those who favour keeping no-deal on the table, to delay and therefore attempt to prevent the Bill receiving Royal Assent before Parliament is dissolved.
Indeed, there are reports of 92 amendments having been proposed to the Bill for its House of Lords consideration. In terms of timings, it is likely that the debate in the Commons will happen from 3pm onwards, with a vote on second reading penned in for around 5pm and with the item in its entirety listed on the order paper as running to 7pm.
In terms of the Early Parliamentary General Election motion, 90 minutes has been allocated for this. This is being slated to happen around 9pm. Finally note that just before 1pm Sajid Javid delivers his first spending review, setting out 2020/21 budgets for Whitehall departments.

Johnson defeated as opponents to no-deal Brexit take control of Parliament

Tuesday 3 September
Boris Johnson’s government has been defeated in Parliament tonight by a vote of 328-301. This means that anti no-dealers will take control of the order paper tomorrow to debate and legislate to seek a 3-month extension to avoid a no-deal Brexit.
PM Johnson has said he is now tabling a motion for a General Election, unhappy that he considers his hands are now to be tied in Brexit negotiations by legislation which takes no-deal off the table. It is likely that the anti no-deal legislation would get the required support in the Commons, but there are questions over whether it can pass in time before Parliament is dissolved, given discussion also about a ‘filibuster’ attempt in the House of Lords being used as a tactic to try to delay its progress.
As for the General Election, whether this motion passes depends on whether Labour backs the vote, given a two-thirds majority is required. Labour has been committed to seeking a General Election, but is wary of PM Johnson’s tactics here. Indeed, in the immediate aftermath of the vote result the Labour Leader Jeremy Corbyn indicated that he would support a General Election, but only once legislation blocking a no-deal Brexit had been passed.

Johnson puts UK on election watch

Tuesday 3 September
Prime Minister Boris Johnson spoke outside 10 Downing Street last night and warned that moves to block a no-deal Brexit would “plainly chop the legs out from under the UK position”. He went on to say “I don’t want an election, you don’t want an election”, but briefing to the media overnight suggests that Mr Johnson will call a ‘snap’ general election on 14 October if MPs successfully push through legislation to tie his hands.
Under the Fixed-term Parliaments Act (2011), Mr Johnson would have to lay down a motion “that there shall be an early parliamentary general election” and would then need two-thirds of MPs to vote in favour of it. It would, therefore, require the support of Labour MPs, but given comments by Leader Jeremy Corbyn it is not thought that the party will be an obstacle even though the Conservatives lead by around 10 points in recent polls.
Moves to block a no-deal Brexit would “plainly chop the legs out from under the UK position”.
Prime Minister Boris Johnson
In the meantime, attention will turn to the House of Commons where opposition parties and rebel MPs plan to apply for an emergency debate under Standing Order 24 in an effort to push through legislation that would prevent the Prime Minister from pursuing a no-deal Brexit without the consent of Parliament. The European Union (Withdrawal) (No. 6) Bill, as it is called, would require the Government to either a) reach a deal with the EU, or b) gain Parliament's approval for a no-deal Brexit.
If neither of these conditions are met by 19 October, then the government would be obligated to request a three-month Article 50 extension (i.e. until 31 January 2020). If Brussels agrees to this extension, then the Government must immediately accept, but if it proposes a Brexit delay to an alternative date then it must be accepted within two days unless it is rejected by the House of Commons. Parliament is set to reconvene around 3:30pm today and we expect the petition to be made to the House of Commons Speaker John Bercow around 6:30pm today with the vote (if accepted) to be held around 10:00pm.
Crucially, the plan would require Mr Bercow to accept the debate, but he is expected to do so after having labelled Mr Johnson’s lengthy five-week prorogation of Parliament a “constitutional outrage”. With speculation that the Bill has sufficient support, cable has slipped below $1.20 for the first time since 2017 this morning as investors eye the elevated risk of a general election which could see a hung parliament given that the Brexit party would be expected to split the eurosceptic vote with the Conservatives. 

Queen approves request to suspend Parliament ahead of Brexit deadline

Wednesday 28 August
The Queen today formaly approved a request by the government to prorogue Parliament (i.e. terminate the current parliamentary session). This had been threatened earlier in the summer in the context of preventing the House of Commons from meeting, in order to neutralise the risk of MPs blocking a ‘no deal’ Brexit.
It is not clear what the precise motivations are, however we note that there were stories overnight suggesting that Leader of the House Jacob Rees-Mogg was struggling to get enough MPs to back a three week recess over the party conference season, as is customary practice. The suspension will begin a few days after MPs return to work in September, and reopen with the Queen’s speech taking place on 14 October.
It should be noted that the conference recess is typically just over three weeks and that the final major party conference (Conservative) ends on 2 October. Hence the parliamentary break is longer than usual and, although pro-Brexit MPs contest the reasons behind its length, it is probably designed to limit parliamentary time to introduce legislation to force the government to negotiate a further extension to the Brexit date (currently 31 October).
Sterling fell sharply, slipping back more than a cent against the dollar from today’s highs to $1.2171, although it recovered later in the day, back to 1.2249 by 5pm.

Speaker ‘will not allow’ Johnson to close Parliament to force through Brexit

Wednesday 14 August
The Speaker of the House of Commons John Bercow has said he would not allow PM Johnson to close Parliament to push through Brexit. Note though that no-deal Brexit does nevertheless remain the default option, whether Parliament is open or not.
On the subject of suspending Parliament, there was also the first court outing yesterday to try and limit this, with Scotland’s highest civil court set to hear a bid by about 70 lawmakers to try stop PM Johnson suspending Parliament to force through Brexit.
The other big theme of the past 24-hours is election planning, after one Conservative politician accidentally published a draft email about his “GE2019 team.” Indeed with each day that passes, there are increasing signs that PM Johnson and his team are prepping to go to the polls over the next few months, although this is not hugely surprising given that with a majority of just 1 currently (with the DUP) the Johnson government is going to find the passage of legislation a very tall order.

Sterling weakens further over growing fears of a ‘no-deal’ Brexit

Monday 29 July
Growing fears of a no-deal Brexit have seen sterling weaken further over the weekend, with the pound now trading at just $1.2367 against the USD.
Sentiment has been dampened after Michael Gove said that the government is now “working on the assumption” that the UK will leave the EU without a deal on 31 October. Note that today he will chair today’s inaugural Brexit ‘war Cabinet’ (aka. XS) in the Prime Ministers absence.
The XS, or the ‘exit strategy committee’ to give it its formal name, is a group of six senior Cabinet ministers who will meet twice-weekly on Mondays and Thursdays to take crucial Brexit decisions. All the while, a number of rebel MPs have sounded demoralised since the appointment of Boris Johnson as Prime Minister.
This morning Reuters reports that Sir Oliver Letwin MP has warned that “we have to accept that we may find ourselves leaving without a deal”.

Sterling feels the heat over no-deal threat

Tuesday 16 July
Sterling is under particular pressure today after overnight news added to worries that the UK might be headed for a no-deal Brexit. The first source of concerns came as both Tory leadership candidates (Boris Johnson and Jeremy Hunt) indicated that they thought the Irish backstop was dead, raising difficult questions over the direction either candidates could move in, to secure a deal with Brussels and one which could pass Parliament. 
Secondly, no-deal concerns have been heightened by reports of yesterday’s meeting between EU Brexit negotiator Michel Barnier and UK Brexit Secretary Stephen Barclay. The trip was “to keep channels open,” but Barclay was said to be working to prepare the ground for his new boss’s arrival in Downing Street. The meeting was said to be a stormy one as Barclay told Barnier that the withdrawal agreement was dead, not once but five times. 
Against the euro, the pound is now languishing at lows last seen in January (currently 90.3p) whilst it stands at $1.2425 against the USD, having touched a low of $1.2408 just before midday, a low last seen in April 2017.
Thursday 13 June
After the first round results in the Tory leadership contest the field of candidates has been narrowed down to 7, with Leadsom (11), Harper (10) and McVey (9) all failing to make the cut. Rory Stewart also came close to being eliminated surpassing the 17 vote threshold by two.
Of the results the most notable figure is the 114 vote total for Boris Johnson, which puts him way out in front of his nearest rival Jeremy Hunt who received 43 votes. Michael Gove came in third with 37 votes. 
The key point to take from this, is that if Boris manages to maintain his backers he is going to be hard to beat. The next round of voting takes place on Tuesday 18 June. 

Labour fails in bid to prevent no-deal Brexit

Wednesday 12 June
Labour lost its bid to prevent a no-deal brexit after an opposition day motion was defeated by 309 votes to 298. If the vote had passed it wouldhave given MPs the chance to table legislation to prevent a no-deal Brexit on 31 October 2019.
Ten Tory rebels voted against the government by backing the motion, but eight eurosceptic Labour MPs voted against it.

Labour bids to prevent no-deal Brexit

Wednesday 12 June
It is being reported that today Labour will initiate a cross party effort to try and reduce the scope for a new Conservative party leader to deliver a ‘no-deal’ Brexit. This comes amid assertions, particularly from former Brexit Secretary Dominic Raab, that a no-deal Brexit could be achieved by simply failing to bring Brexit back to the Commons, including with talk of proroguing (suspending) Parliament to help achieve this.
Channels for Parliament to take control of the Brexit process are more limited now, with the Withdrawal Agreement Bill having not been taken to Parliament it is now not possible for amendments to be attached to such legislation to alter the course of events. As such Labour appears to be looking at using today’s opposition day debate, to attempt to gain control of the parliamentary agenda on 25 June.
Labour is expected to be backed by the likes of the Liberal Democrats and the SNP, plus some others, to seek measures including legislation, to help avoid a no-deal Brexit, while also preventing a future PM from proroguing Parliament to force Brexit through. Parliament has on balance been opposed to no-deal Brexit, so any action to avert no deal could pass the Commons.
Note though that a Bill brought by Labour’s Yvette Copper in April, seeking an extension to avoid no-deal, passed by just one vote. For sterling, positive steps that reduce the prospect of no-deal would likely provide a key footing to the pound, where nervousness over heightened no-deal Brexit risks amid the Tory leadership race have weighed on the currency of the late.
Monday 10 June
GDP figures for the month of April were weaker than expected with output falling 0.4% month on month - market consensus and our view had been for a 0.1% monthly fall.
Part of the reason for April’s weakness was a 24% mom fall in car output which was related to planned shutdowns in the sector, which in turn were linked to Brexit.
As a result manufacturing output was much weaker than expected with a 3.9% mom fall (consensus -1.4%, Investec -2.2%), as was the broader estimate of industrial production which witnessed a -2.7% fall (consensus -1.0%, Investec -1.5%). 

Tories reeling after fifth-placed finish in European elections

Tuesday 28 May
Following Theresa May’s resignation statement on Friday (she will stay on until 7 June and then act as caretaker PM until a successor is chosen), the Conservatives are reeling from Thursday’s European elections.
They came fifth behind the Green Party, with a 9% share of the vote, their worst performance in the past 200 years. The Brexit Party topped the vote with 32%. This has upped the ante on the government to leave the EU on 31 October, with a number of candidates to replace May (at the latest count there are 10 of them) stating the need to depart on that date, with or without a deal.
Just to highlight the degree of political pressure on the Tories, The next scheduled major political event takes place in the shape of the parliamentary by-election in Peterborough on 6 June to replace the disgraced Labour MP Fiona Onasanya. The Brexit Party is odds on favourite to capture the seat.  
Unsurprisingly, in the face of further political uncertainty and increased chance of a hard Brexit on Halloween, GBP didn’t manage to gather any support yesterday in markets and remains vulnerable.
There is a notion that GBP is becoming a bit long in the tooth for all this political malarkey and to an extent it has built a strong immune system to the Brexit seesaw but comments over the weekend from our peers in markets have raised the possibility of GBPUSD trading to 1.1000 in a no-deal scenario.
The dust needs to settle and the Tory leadership race now needs to play out for us to have greater clarity of the outlook for GBP but what is for sure is that rallies will be restrained in both GBP/USD and GBP/EUR until there is a hint of consensus on new leadership and alignment on a Brexit deal.

May to step down on 7 June

Friday 24 May
As widely anticipated Theresa May just delivered a statement outside No 10 Downing street, stating that she will formally resign as Tory leader and the Prime Minister on 7 June.
She will however remain in place in the meantime until a new leader is Tory leader is selected. Sterling has edged lower on the news to $1.2672 (GBP:USD), having initially jumped above $1.27. 

May on borrowed time as polls open for European Parliamentary elections

Thursday 23 May
Yesterday saw a rush of speculation as to whether Prime Minister May was going to step down voluntarily or be forced out. In the end she stood fast, refusing to meet various cabinet ministers.  
These developments followed PM May’s ‘bold new offer’ earlier in the week, which included a 10-point plan to try and entice Labour support for the Withdrawal Agreement Bill (WAB). However the inclusion of the a Commons vote on a second referendum galvanised opposition within the Tory Party and even within the Cabinet, where Leader of the House Andrea Leadsom resigned last night.
It would now appear that PM May’s remaining time is very limited, perhaps just days, although she will not go today given the European Parliamentary elections, as political coverage is restricted.
There has been some talk that she may go by the end of the weekend, but at this point it is simply not clear. It should be worth noting that the executive committee of the 1922 Committee of backbench MPs met last night, where it refrained from altering the leadership rules to allow an immediate confidence vote in the PM.
The committee has however reportedly agreed in principle a change to the rules by mid-June should PM May have not stood down by then. Despite the great deal of uncertainty over the Prime Minister, the broad points we would make are that;
  1. PM May’s time is almost up.
  2. A leadership contest is therefore likely to take place early summer.
  3. The limited time between a new Tory leader (and Prime Minister) taking their position and the end of the current extension (31 October) means another extension is becoming likely; and 
  4. The risks of various tail risks are increasing, including those of a general election and a no deal Brexit.

May’s gamble on ‘bold, new Brexit deal’ falls flat

Wednesday 22 May
Yesterday the Prime Minister delivered what she called a "bold, new Brexit offer", in a last-ditch attempt to secure support for her deal. In it she outlined a 10-point proposal of items that would be included in the Withdrawal Agreement Bill (WAB).
This included points such as:
  1. A commitment to conclude attempts to find an alternative to the Irish backstop arrangement by 2020 (the PM admitted that it could not be replaced in the Withdrawal Agreement)
  2. Protections on workers’ rights
  3. Environmental protections, and 
  4. Most notably an offer for MPs to vote on a second referendum, although this could only occur if the WAB was passed.
PM May will deliver a statement to the House of Commons today, with the Bill reportedly set for a Commons vote in the week commencing 3 June, potentially on the 4th or 5th. 
The points included in yesterday’s offer appeared to be a gamble by the Prime Minister to try and entice Labour support in trying to pass the WAB and on the hope that the vote on a second referendum failed to pass given that in the last indicative vote, it lost by 292 votes to 280.
However given the tone of reports overnight it would seem that PM May's gamble is almost certain to fail.
For one, the inclusion of a Commons vote on a second referendum has alienated many Tories, including some of those who supported her plan at the third meaningful vote. A meeting of around 40 ERG Tory MPs last night unanimously agreed to oppose PM May's plan.
Second, the response from Labour MPs has been less than glowing, suggesting that PM May’s plan has had little traction with the opposition. The arithmetic, if anything now looks more challenging and we would judge that the WAB will probably lose by a greater margin than in the third meaningful vote (on the Withdrawal Agreement only), which failed to pass by 58 votes.
This looks to be the last roll of the dice for the PM, who is set to meet the 1922 Committee Chair Sir Graham Brady after the vote to set out a path for her departure.
This will likely trigger a leadership contest over the summer, with a new Tory party leader and therefore new Prime Minister installed at the Tory party conference in September.
Sterling has remained weak on the continued Brexit uncertainty breaking through $1.27 to $1.2696 this morning.  

May promises ‘bold new’ Brexit offer

Monday 20 May
Brexit developments over the weekend have seen Prime Minister May promise a ‘bold new’ Brexit offer, in one final push to break the deadlock over Brexit. The government might even bring the Withdrawal Agreement Bill (WAB) to parliament next week, with talk of a vote on either the 4th or 5th June.
The details of this offer are reportedly set to be agreed at tomorrow’s cabinet meeting, but it is reportedly set to include protection of workers’ rights and environmental standards, the aim of these being to try and persuade some Labour MPs to support PM May’s Brexit plan.
However the arithmetic still remains challenging, with several MPs having already expressed their scepticism over the plans. Sterling has continued to suffer from Brexit uncertainty with GBP:USD having fallen to a low of $1.2721 on Friday, its lowest level since January.
On one final point, note that European Parliamentary elections are set to be held in the UK this week (23 May), with polls continuing to point to a poor showing for the Tories, with the latest poll (Opinium), showing the Tories coming fourth, with just 12%, while the Brexit party was polling at 34%. 

Breakthough on Brexit?

Wednesday 15 May
Government sources have indicated that there will be a further vote in the Commons on Brexit early next month. Specifically, this will be in the form of the Withdrawal Agreement Bill (the piece of legislation that will implement the EU Withdrawal Agreement), with the intention to introduce it to parliament in the week of 3 June.
A second reading and a vote are planned the following week. This will take place irrespective of whether or not the Tories and Labour enjoy any success in their cross-party talks. Of course, the Commons arithmetic remains difficult for the government with the previous ‘meaningful vote’ on the Withdrawal Agreement on failing by 58 votes on 29 March. 

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May planning fourth bid at getting Parliament to back Brexit deal

Friday 9 May
It is being reported that PM May plans to have a fourth shot at getting Parliament to back a Brexit deal, with plans to take the EU Withdrawal Agreement legislation to Parliament within the next two weeks.
The PM is doing so to try and stave off the risk new MEPs would actually have to take their seats following European Parliamentary elections (in the UK) on 23 May and as she fights for her own political survival for a time longer.
The PM looks to be pinning her hopes on reaching a deal with Labour, but almost all reports from these cross-party talks imply that they are getting nowhere fast amidst speculation that Labour will pull the plug any day now, bar a sudden and sizeable concession from the Conservative side of the negotiating table.
In terms of PM May’s position, the meeting of the 1922 Committee of backbench MPs held yesterday is reported as having been a gloomy and very frustrated one, with the PM having not yet laid out her plans to stand aside.
However she has promised to meet the executive of the 1922 Committee next week to discuss a timetable for her departure. Even so, Mrs May’s spokesman said yesterday that she “is here to deliver Brexit in phase one and then she will make way for phase two” so, depending on the passage of Brexit legislation, those frustrations amongst many on the 1922 Committee could persist a while longer.

UK concedes no Brexit deal will be reached before EU elections

Tuesday 8 May 
The Government held three hours of talks with the Labour Party yesterday, but the opposition claimed that the Conservatives’ proposals on a customs compromise was ‘a million miles away’ from an acceptable proposal.
That said, both sides agreed to meet again. Meanwhile the pressure on Theresa May to step down early continues to mount, with the PM urged by 1922 Committee Chairman Sir Graham Brady to set out a timetable for her departure.
However media reports suggest that Mrs May is planning to announce she will step down in mid-July. Also defacto Deputy PM David Lidington conceded yesterday that the UK would have to participate in elections to the European Parliament on 23 May.

EU agrees six-month extension to Article 50

Thursday 11 April 
Last night saw the EU offer PM Theresa May a longer extension than she initially requested. After lengthy discussions that went on into the early hours the EU finally offered the UK a new Article 50 extension that moves the Brexit date to 31 October 2019.
The EU itself was split on the length of the extension, with France pushing for a harder line and a shorter extension. In terms of the path from here, PM May will return to the UK today and attempt to sell the longer extension to her Cabinet.
Notably it is likely to face some opposition given that the October exit date now means that the UK will have to take part in European Parliamentary elections unless there is a miraculous turn in events and the UK is able to pass PM May’s Withdrawal Agreement - in such an event the UK would be permitted to leave earlier than 31 October. 
Talks between the government and the Labour party are also set to continue today, but whilst the government has described them as being constructive, Labour continues to accuse the government of being unwilling to move on red lines such as a permanent customs union.

EU divided on length of A50 extension

Wednesday 10 April 
Yesterday MPs voted 420 to 110 to back the Prime Minister’s proposals to extend the UK’s departure from the EU from 12 April to 30 June. But in a blow to the Prime Minister, 97 of the 110 MPs who opposed the “Brextension” were Eurosceptic Tories and a further 10 consisted of the government’s confidence and supply partners the DUP.
Nevertheless, parliament’s approval means that the Prime Minister will put forward her case as originally planned to EU27 leaders at 5:30pm London time tonight. Last night also saw the draft conclusions for this evening’s emergency Brexit Summit leaked to the media.
Notably, the document does not contain an explicit end date for any extension but rather states that it should be “no longer than [XX. XX. XXXX].” This comes amid reports that European capitals are divided on whether to extend Article 50 to the end of 2019 or to March 2020, with EU27 leaders set to make a firm decision tonight.
But the draft also offers an element of flexibility that would allow the UK to leave the EU earlier “if the Withdrawal Agreement is ratified by both parties before this date”, in which case Brexit would “take place on the first day of the following month”.
Overall it remains to be seen what the precise terms and length of any extension that will be offered by the EU27, but it looks almost certain to be longer than that sought by the Prime Minister.

May heads to Europe in bid to secure A50 extension

Tuesday 9 April 
Conservative ministers will meet their Labour equivalents today to try and break the Brexit impasse. It is understood that the PM has agreed to take up various EU employment and environmental protection laws after the UK leaves, but is not committing to remaining in a customs union.
Mrs May is due to have talks with both Angela Merkel and Emmanuel Macron today ahead of the emergency EU Summit tomorrow evening. The UK’s official request at the end of last week was for an extension to membership until 30 June.
This is largely thought to be unrealistic, with the EU more likely to make an offer for a longer delay to departure, and on the condition that the UK fights the European parliamentary elections in late May and that Britain agrees not to be obstructive within the EU during its prolonged membership.
While we are of the view that the EU will grant an extension, we should point out that the UK’s default path (i.e. if nothing happens), is that it leaves without a deal on Friday.

EU leaders remain cool on May's Brexit extension ahead of crucial summit

Monday 8 April 
The weekend’s Brexit news flow has actually been relatively light on fundamental game changing news despite the UK’s current 12 April exit date fast approaching. In terms of events in the week ahead, there remains a high degree of uncertainty.
First, it remains to be seen how talks between the government and Labour on the way forward progress, with Friday seeing reports from Labour claiming that the government was offering no real changes in negotiations.
There is some talk that PM Theresa May could meet Labour leader Jeremy Corbyn later today in an attempt to kick start negotiations and reach some form of agreement which she could take to the EU summit on Wednesday to support her request for another Article 50 extension. But these discussions have yet to be formally agreed.
Should an agreement between the two be reached there is a suggestion that further parliamentary votes would be held tomorrow ahead of the Summit, but again at present there is nothing confirmed.
Second, Wednesday will see the EU hold an emergency summit, the purpose of which will be to decide on whether to grant the UK another Article 50 extension.
On Friday PM May requested an extension to the 30 June, however EU leaders have various opinions on another extension. EU President Donald Tusk has suggested a ‘flexible’ 1-year extension to April 2020, whereby the UK could exit earlier if the Withdrawal Agreement were to be ratified by the British Parliament before then.
But there are also those among the EU taking a much harder line such as  French President Macron, which suggests the process of agreeing another extension this Wednesday might not be so straight forward.

Tusk proposes year-long flexible extension to Article 50 process

Friday 5 April 
News reports suggest that EU Council President Donald Tusk will offer the UK an Article 50 extension of up to a year at the emergency EU Summit on Wednesday next week. This follows reports that (perhaps unsurprisingly) the discussions between Theresa May and Jeremy Corbyn are unlikely to break the impasse.
Indeed Attorney General Geoffrey Cox remarked yesterday that if the talks failed, any delay would ‘likely to be a long one’. In terms of the wider political scene, yesterday’s by-election in Newport West resulted in Labour holding the seat with a reduced majority of 1,951.
This reduces the Tories’ effective majority in Parliament to 5.

Thursday 4 April 
There were two themes to Brexit developments yesterday. Firstly, the House of Commons approved legislation (by 313 votes to 312!) which would force Prime Minister Theresa May to seek a Brexit delay to prevent a disorderly no-deal outcome on 12 April.
The legislation still needs to pass the House of Lords (debate starts later this morning) and be signed into law. Even then, the UK would still be required to take action to actually avert a no-deal outcome, with this still the ‘default’ outcome.
As such, whilst the vote moves to put in law the will of the House, it still does not avert no deal. It will though allow the UK to argue in talks with Brussels that Parliament can at least agree that a Brexit delay/aversion of no deal is something UK Parliament wants to avoid.
Yesterday we also saw talks take place between PM May and Labour leader Jeremy Corbyn to try and find a way forward on the shape of future arrangement for UK-EU relations, which might be able to carry the will of the House and therefore form the basis of a further Brexit extension request to be taken to the EU Summit on 10 April.
The mood at these talks looks to have been a positive one, but the Labour leader also said that the PM had not yet moved enough. Talks will continue today whilst there look to be continuing internal discussions within the Labour party over whether to demand another (confirmatory) referendum.
In the Tory ranks, there continue to be significant grumblings over the discussions taking place with Labour. We saw two government resignations yesterday and there continue to be reports that more could follow, depending on the direction talks move in.
Sterling struggled for momentum early in the day yesterday following the poor UK services PMI, but recovered those losses through the day with the pound at $1.3186 at the time of writing.

Wednesday 3 April 
After a marathon seven-hour Cabinet meeting, the Prime Minister announced that the UK would seek a further extension of Article 50 at next week’s emergency Brexit summit.
In order to devise a “way forward” for the EU27 (upon which an extension would be conditional), she reached out to Leader of the Opposition, Jeremy Corbyn, to try to forge a new parliamentary consensus.
But if the two fail to reach an agreement, the Prime Minister has pledged to hold a “run-off” vote in the House of Commons between her agreed deal and alternative options. She has pledged to honour the result of this X Factor-style showdown, providing that Mr Corbyn makes the same commitment.
The two leaders are set to meet today, but we are sceptical whether there is sufficient time for a change in Brexit strategy given the proximity to next week’s EU Summit. At the same time it serves to further sow further division with the eurosceptic wing of the Tory party, not least after Downing Street confirmed it would lay a parliamentary order on 11 April to make preparations for European Parliament elections but pointed out that the poll could be cancelled at any date up until 22 May.
Further opposition has come from her confidence and supply partners, the DUP, who said the decision was “little surprise” given her “lamentable” handling of the Brexit negotiations. Note also that Sir Oliver Letwin MP is expected to put forward a motion this afternoon that is designed to clear a path for a bill sponsored by Yvette Cooper MP which is designed to take a no-deal Brexit off the table.
Overall markets have taken last night’s announcement positively, its vagaries notwithstanding, with cable rising around a cent overnight to $1.3146 currently.

Tuesday 2 April 
Last night saw the House of Commons hold another round of indicative votes on four alternative Brexit options, once again all failed to win a majority. The one option that came closest to securing a majority was Ken Clarke’s customs union proposal, which lost by three votes (276-273).
Nick Bole’s proposal of Common Market 2.0 (customs union + single market) lost by 21 votes (282-261). The remaining indicative votes were for a public vote on any Brexit deal (defeated 292-280) and motion G, which aimed to prevent the UK leaving without a deal (defeated 292-191).
Last night also saw Nick Boles quit as a Tory MP following the defeat of his Common Market 2.0 proposal, he will now sit as an ‘independent progressive conservative’. Importantly, this narrows the government’s majority to just 7, a majority which is set to be whittled down further to just 6 following the Newport West by-election this Thursday.
Additionally there are also some question marks over Dominic Grieve’s position, following his loss in a local party confidence vote on Friday and talk of possible de-selection, a prospect which would cut the Tory majority again.
In short the differences over Brexit are ever deepening the splits in the Tory party. Looking forward there is set to be an extended cabinet meeting today, where there is talk that some ministers will urge the PM to consider an early general election in order to try and break the deadlock. We would reiterate once more that we fail to see how this would help the current situation.
Beyond that a third round of indicative votes is set to be held this Wednesday, which could be followed by a fourth vote on PM May’s deal in a ‘play-off’ against any option that might win on Wednesday. However a fourth vote is yet to be confirmed.

MPs debate alternatives to May's Brexit plan

Monday 1 April 
Today MPs will seek to whittle down the number of alternatives to the Prime Minister’s Brexit deal through a second round of “indicative votes”. Eight motions have been proposed and will be debated sometime between 3:30pm and 6:00pm (at the latest), after which the Speaker of the House of Commons will select which will be put to a vote at 8:00pm.
Results are expected around 10:00pm, but the leading option appears to be the customs union mooted by Ken Clarke MP which (after a recount) was defeated by just six votes in the first round last week. Reports suggest that if any single proposal is able to command a majority, MPs will then seek to turn this non-binding display of parliamentary will into a legally-binding commitment on the government.
Having sensed that a softer Brexit is now in the works, some 170 Eurosceptic MPs (including 10 cabinet ministers) wrote to the Prime Minister at the weekend demanding a departure from the EU with or without a deal. There are also mumblings that the Prime Minister is considering whether to bring back the Withdrawal Agreement to the Commons, with Thursday apparently pencilled in, though other days have been mentioned.
There is also talk that May’s deal could be pitched in a run-off against any winner from tonight’s indicative votes. Note, however, that its confidence and supply partners the DUP still appears unwilling to support it, with Sammy Wilson MP saying that the party would not vote for it even if it was brought to the Commons a "a thousand times”.
Against this chaotic backdrop, it is perhaps unsurprising that the Sunday papers were full of speculation about a snap general election. The opposition Labour party can smell blood, with Shadow Foreign Secretary Emily Thornberry warning it now looked likely that Labour would put down another vote of no confidence in the government to get a general election.
But while the likelihood of another general election has risen over recent months, how it would solve the current deadlock in Westminster is unclear.

From the archive: 2019

  • January 2019

    EU resolute after MPs back removal of backstop from Withdrawal Agreement

    Wednesday 30 January 
    MPs last night voted in support of an amendment to replace the Irish backstop in Theresa May's Withdrawal Agreement. The amendment, raised by Sir Graeme Brady, was supported by 317 votes to 301. After the vote, Mrs May signalled her intention to return to Brussels and demand a "legally binding change" to her deal.
    But a spokesman for Donald Tusk, President of the European Council, said that "the Withdrawal Agreement is not open for renegotiation", saying it "remains the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union".
    Throughout Tuesday afternoon, Parliament debated Prime Minister May’s intention on how to proceed with the UK’s exit from the EU (i.e. her intended ‘Plan B’), following her crushing "meaningful vote" defeat a fortnight ago. But nothing could be considered a second "meaningful vote" – any new plan has not evolved formally and of course further agreement would need to be reached with the EU before it returned to the Commons.
    Donald Tusk, President of the European Council
    ‘The Withdrawal Agreement is not open for renegotiation.’

    Donald Tusk, President of the European Council

    Seven amendments to the motion were also debated and voted upon. The government defeated five of them, including key amendments G and B. Amendment G (Dominic Grieve) would have given MPs control of the Brexit agenda in the Commons on set days.
    Amendment B (Yvette Cooper) would have set up a bill to establish a vote to request an Article 50 extension, had a deal not passed parliament by 26 February. However the government lost a vote on amendment I, which rejects a "no deal" outturn. But in practice this is only symbolic.
    However, as a result of this amendment passing, the Labour Leader Jeremy Corbyn said that he was prepared to meet the Prime Minister for talks. He said: "We are prepared to meet her to put forward the points of view from the Labour Party."

    Tories unite behind 'Plan B'

    The Commons backed amendment N (Sir Graham Brady), which rejects the current backstop (to prevent a hard border on the island of Ireland) and insists on "alternative arrangements to avoid a hard border". This will give the government a parliamentary mandate to move negotiations with Brussels in such a direction. However, the EU reiterated its view, as it has done on countless occasions, that it is not open to renegotiating the Withdrawal Agreement.
    The government is hoping that in practice it might be more flexible, maybe with the use of a codicil. Perhaps more importantly though, it introduces a greater degree of unity in the Conservative Party and to a certain extent, with its "confidence and supply" partners, the DUP. The government was taken to have won the vote on the main motion (i.e. the ‘Plan B’).
    From here, it could be that the government now looks at what is termed the Malthouse compromise, which now seems to have a certain degree of traction across the Tory party. In short, this would involve a renegotiation of the backstop with a longer transition period.

    Sterling slips back

    Sterling fell back modestly to a touch below $1.3100 from $1.3160 earlier in the evening. This is because the defeat of Amendment B is seen as increasing modestly the risks of a "no deal". The mood music coming from the EU on Wednesday morning will probably set the tone of the forthcoming talks between London and Brussels.

    Brexit debate, part 2

    Tuesday 29 January 
    MPs will vote on various amendments to PM May's Brexit deal today with the amendments predicted to take place from around 7pm tonight. 
    Several of the amendments have particular significance, due to their potential impact, both on the terms on which the UK could leave the UK, and the likelihood of a deal being done. 
    It should be noted, if both the Cooper and Grieve Amendments are defeated, sterling would be vulnerable as both amendments look to reduce the risk of "no deal". Labour Leader Jeremy Corbyn reiterated his priority, to block a no-deal Brexit, and called on his party to back a three-month delay on the Brexit timeline.




    What are the amendments to watch?

    The Cooper Amendment

    This proposes a bill to request an Article 50 extension if parliament has not passed a deal by 26 February.

    The Grieve Amendment

    Effectively, this would allow MPs to table Brexit related motions, giving parliamentarians greater control over the agenda. 

    The Brady Amendment

    Which instructs the government to ditch the NI backstop in favour of an ‘alternative’ arrangement, which Mrs May seems likely to back.




    The Malthouse Compromise

    One additional point is that there is much talk about a ‘Plan C’ termed the Malthouse compromise, which seems to have a certain degree of traction across the Tory party. This involves a renegotiation of the backstop with a longer transition period. However this will not form part of Commons business today and we consider it likely to be a follow-up, especially if the Brady amendment is passed. 
    Speaking in the Commons, Mrs May said that her proposal is comprised of two parts. Plan A is to reopen the withdrawal agreement and renegotiate the backstop. This would see her go back to Brussels and attempt to transform the backstop into the version set out in a Brexiteer report last year.
    The transition period would also then be extended so there was more time to agree the future relationship. Should this fail, May would fall to Plan B which is akin to a managed "no deal". Here the Prime Minister would ask the EU to offer the transition period even though no withdrawal agreement had been agreed. In return, the UK would honour its financial contributions and commitment on EU citizens’ rights.
    However, EU officials reiterated their position that they would not be reopening the withdrawal agreement at this stage in proceedings. 

    MPs set for crucial Brexit vote

    Tuesday 29 January 
    Today UK Parliament with vote on PM May’s ‘Plan B’ for taking Brexit forward, following the thumping ‘meaningful vote’ against her current deal.
    Votes will also take place on any amendments to this; the number submitted is well into the double digits and House of Commons Speaker John Bercow will announce which are being taking forward for a vote around lunchtime, with the vote on the ‘Plan B’ and amendments set to take place from around 7pm.
    The outcome of tonight’s vote and in particular the amendments that pass will be important in shaping the path Brexit takes from here forward. Two particular amendments which have been well flagged are those sponsored by Yvette Cooper and Dominic Grieve.
    The first proposes a Bill which would set a date of 26 February to secure parliament’s backing for a Brexit deal, after which MPs could request an extension of Article 50 (which all EU member states would need to then agree to). The Grieve amendment would open the door to MPs considering alternative versions of Brexit and give priority to debates over backbench motions to discuss these in parliament.
    Note that another amendment which looks to be significant is one by Sir Graham Brady, Chair of the 1922 Committee of backbench MPs. His amendment calls for “alternative arrangements to avoid a hard border” on the island of Ireland.
    Return of Chequers?
    It is being backed by the Prime Minister, with the aim of reinvigorating her Chequers proposal and adding impetus to the prospect of a renegotiation of the backstop, which the EU’s deputy Chief Brexit Negotiator pushed back against yesterday. Note that of the above highlighted amendments it is far from certain that any will pass whilst it remains to be seen whether the Speaker would choose to select the Brady amendment (or others) in the first place.
    On the latter, the head of the European Research Group Rees-Mogg has said he would oppose this, but PM May is presumably still banking on using even a defeated amendment as a route to try and extract backstop concessions.
    Note that the path for Brexit from today onwards is far from clear, but if the Cooper amendment does pass there is talk of a vote on that Bill on 5 February while PM May is now planning to hold another Brexit planning vote around 13 February. Needless to say, the UK’s exit from the EU is set to take place two months today, so time is very tight.

    PM weighs up Brexit amendments

    Monday 28 January 
    Tomorrow MPs are set to vote on the Prime Minister’s "Plan B" for Brexit. Ahead of this, reports in the Sunday papers suggest that the Prime Minister is weighing up whether to support a number of amendments to the vote.
    The first, tabled by 1922 Committee Chairman Sir Graham Brady, would see the Irish backstop replaced with “alternative arrangements to avoid a hard border”, while another by Andrew Murrison which would set an explicit expiration date of end-2021 for the backstop.
    Both these amendments are seen as being mechanisms to placate the concerns of the DUP and eurosceptic MPs and secure their support for the Prime Minister’s plan. At the same time, Labour is reportedly considering whether to back a competing amendment by Yvette Cooper which would give the government until 26 February to get a deal through the Commons or be forced to apply for an extension to Article 50 for anything up to nine months.
    Note that MPs have until tonight to table any amendments, with Commons Speaker John Bercow then expected to announce those that he has selected around midday tomorrow.

    May sticks to her guns with Brexit 'Plan B'

    Tuesday 22 January 
    PM May delivered a statement to the House of Commons yesterday on her Brexit ‘plan B’, which in the end looked much like ‘plan A’, which suffered the thumping defeat in the Commons a week ago.
    After holding cross party discussions, the PM explained that little progress had been made and as such she planned to continue working with her proposal to try and gain further concessions, not least on the Irish backstop, which she hopes will convince her confidence and supply partner, the DUP, to back her proposal, as well as the European Research Group’s (ERG) 60+ members.
    Note that May’s stance is very much aimed at limiting divisions and the threat of a split in her party, whilst also eyeing signs that the right of her party look to be more willing to accept an amended version of her plan as the prospect of a delay to Brexit, or even no Brexit at all, have risen up the agenda.
    Indeed, we note that ERG Chair Jacob Rees-Mogg was quoted saying “If she can get a deal with the backstop, we’d mostly hold our nose and vote for it”. In the discussion that followed May’s statement yesterday, the Prime Minister repeatedly refused to rule out an extension to the Article 50 Brexit period.
    Movement towards an extension of the Brexit period and other ‘softer’ Brexit options are coming about as Parliament takes on a greater role in directing the Brexit process. Next Tuesday (29 Jan) MP’s will debate and vote on the PM’s ‘Plan B’ and amendments (selected) to this plan.
    Amendments proposed are set to include the likes of a plan to see a 9 month Brexit delay to be triggered if the UK Parliament has not backed a deal by 26 February and also an amendment by Dominic Grieve which would give backbench MPs the opportunity to propose their own Brexit plans.

    Corbyn proposes options to avoid 'no deal'

    Meanwhile Labour leader Jeremy Corbyn is proposing a series of votes in Parliament on options for how the UK can avoid ‘no deal’, with one of these expected to be a second referendum. As leader of the opposition, it is almost certain Mr Corbyn’s amendment would be voted on, though Labour’s
    official position on such a second vote remains unclear.
    As we said last week, the timetable for Brexit to be progressed in time for an exit on 29 March looks very tight and the prospect of an extension has risen. But for Brussels to grant such an extension the UK need to outline its plan/reason for the extension.
    Comments from Brussels yesterday showed the EU on the whole playing hardball on the prospect of May securing further major concessions to her Brexit plan.

    Cross-party talks on Brexit deal falter

    Monday 21 January 
    Theresa May is reported to have admitted last night to her Cabinet that she has made no progress with cross-party talks. Instead she will press forward with trying to get her existing deal by attempting to change the Northern Ireland backstop.
    The PM is due to present her ‘Plan B’ to the Commons this afternoon, which will be followed by the start of a debate tomorrow and another ‘meaningful’ vote on Tuesday week. Speculation over the weekend continued that Dominic Grieve and Yvette Cooper will table a specific amendment tomorrow. If passed next week, this would enable MPs to table business in the Commons, if backed by 300 MPs.
    This is significant as it would allow parliament to table a vote on whether, for example, to request an extension to Article 50, potentially delaying the UK’s exit from the EU, and preventing the PM from ‘running the clock down’.
    An article in the Telegraph suggests that the government is willing to consider making changes to the 1998 Good Friday agreement and to seek a bilateral agreement with Ireland. However Deputy Irish PM Simon Coveney has rejected this approach, stating that Ireland negotiates as part of the EU27.    

    What next in the Brexit debate?

    Thursday 17 January 
    The PM is set to take her ‘Plan B’ to the Commons on Monday 21st where she will outline her strategy for the next steps in the process. A full day of debate will take place on Tuesday 29 January culminating in a vote.
    The motion will be amendable which means that Parliament will be able to express its views on a number of options with respect to the type of deal it prefers. This may show whether there are any ways forward which could command the support of the House.
    In addition an amendment may be accepted which enables MPs to determine Brexit related business of the Commons, allowing them to table debates on whether to request (for example) an extension to Article 50. At present, government business generally has precedence.
    This is very procedural and technical, but in broad terms MPs will press for (and probably get) greater powers at the expense of the government.

    Government survives no confidence vote

    Wednesday 16 January 
    The government won the vote of no confidence tabled by Labour leader Jeremy Corbyn by 325 votes to 306, a majority of 19. This compares with an effective majority in the Commons of 13. This was no surprise bearing in mind that the DUP had previously insisted that it would support the Conservatives in this vote.
    Mr Corbyn has indicated that he may table several such motions in the future. We suspect that his intention is to continue to try to maintain the line that the Labour Party's main Brexit objective is to fight an General Election and deflect pressure to call for a second referendum which he judges could be politically toxic (as well as being contrary to his personal inclinations).
    Also there is a feeling that the Conservatives may fracture at some stage as the PM attempts to gather a consensus on Brexit across both sides of the House. PM May says she will continue to work to deliver the referendum result. She aims for cross party Brexit meetings to commence this evening and will deliver her 'Plan B' motion on Monday.

    Record loss for May as Parliament rejects her Brexit deal

    Tuesday 15 January 
    The government has suffered a thumping defeat in the ‘meaningful vote’ on its Brexit deal following five heated days of debate. Just 202 MPs backed the government’s deal, with 432 voting against it (a majority of 230 against).
    Following the defeat, Prime Minister Theresa May has pledged a statement about how she intends to proceed by Monday (21 January) after having “put forward realistic ideas to the EU”. We can also expect other forces in Parliament to seek to amend the government’s course whilst there will no doubt be calls for Parliamentary votes on the next steps.
    Ahead of the vote, European Commission President Jean-Claude Juncker pulled out of a scheduled debate in Strasbourg for Wednesday in order to remain in Brussels to deal with “this specific emergency”. Additionally, German Foreign Minister Heiko Maas indicated earlier in the day that the EU was prepared to offer further assurances on the contentious ‘backstop’ in the event that the government was defeated.
    However, before the Prime Minister meets with EU leaders, she will first face a motion of “no-confidence” in the government which has been tabled by Labour leader Jeremy Corbyn in an effort to bring about a General Election. This will take place tomorrow, though the timings are not yet clear, with House of Commons leader Andrea Leadsom having proposed that the debate on the motion will last “all day until 7:00pm”.
    It is widely expected that Mrs May will win the confidence vote with the government’s confidence and supply partner the DUP having pledged its support in such a challenge, despite having voted against the Prime Minister’s deal in tonight’s “meaningful vote”. In the lead up to tonight’s vote, cable was off more than 2 cents off its intraday high of $1.2916 seen this morning.
    Following the result, a knee-jerk reaction saw it sell off further, though it is now up around 1½ cents off its lows to $1.2850 after the Prime Minister pledged to stay on and fight for more concessions from the EU.

    Parliament set for meaningful vote

    Tuesday 15 January 
    The meaningful vote on PM May’s Brexit plan takes place in Parliament today with the main vote itself scheduled between 7 and 9 pm. There will also be various amendments to the proposal voted on prior to this, with the overarching vote based on the amendments which have been passed. It remains unclear at this stage which amendments will be selected or finally voted on.
    Labour stalwart Hilary Benn has withdrawn his notable amendment which would reject both PM May’s deal and a no-deal Brexit and give Parliament a say in what the government does next, after the inclusion of the amendment threatened to bolster support for May’s deal amongst hard line Brexiteer MPs.
    Note that May is firmly expected to lose in tonight’s vote and the question is clearly over the extent of her defeat. Media reports this morning are gloomy with some suggesting she will do well to keep the extent of the loss to less than 100 MPs.
    What happens after is unclear, though we might get some clarity this evening as PM May is expected to give a statement afterwards. Labour is expected to put forward a motion of “no-confidence” in the government and hence press for a General Election.
    However the government’s confidence and supply partners the DUP have said they would vote with the government in such a confidence challenge, even though they will vote against the government in tonight’s “meaningful vote”. After a loss tonight, May would be required to respond to Parliament within 3 sitting days (effectively Monday 21st).
    Media reports this morning confirm expectations that the Prime Minister is planning to force a second vote, seeking concessions from Brussels. We can also expect other forces in Parliament to seek to amend the government’s course while there will no doubt be calls for Parliamentary votes on the next steps.

    May facing heavy defeat despite increase in support

    Monday 14 January 
    Over the weekend a number of MPs have indicated that they will support the government in Tuesday’s "meaningful vote" including four more Conservative MPs, as well as John Mann from Labour.
    Regardless, the Prime Minister still looks on course for a heavy defeat, with the Sunday papers reporting that she could be on course to lose by between 100 and 200 votes. The rescheduled vote is set to be held at 7:00pm on Tuesday, though ahead of this there are set to be a number of fresh or revised amendments being laid in parliament today.
    With the vote having been delayed from its original 11 December date, the Evening Standard reported on Friday that some cabinet ministers now believe there is not sufficient time to pass Brexit legislation in time for the UK’s departure from the EU on 29 March.
    Further to this there are reports this morning that the government is well behind in its timetable even if Parliament works weekends and the February half term recess is cancelled. As such, some Cabinet members apparently expect that an extension of Article 50 will be required.
    A further headache for the government comes from reports in the Sunday Times that Downing Street now fears that rebel MPs are plotting to change Commons rules so that motions proposed by backbenchers take precedence over government business. Today the Prime Minister is set to give a speech in Stoke-on-Trent at around 9:50am in which she will warn that she now believes that Parliament blocking Brexit is a more likely outcome than the UK leaving with no deal.
    She is then reportedly set to return to Westminster to give a statement to the House of Commons at 3:30pm. There is speculation that this is in order to present assurances from European Commission President Jean-Claude Juncker concerning the controversial Irish "backstop", with conflicting reports that Brussels is set to provide a commitment to try to limit its duration to no longer than one year.

    Glimmer of hope for May's Brexit deal

    Friday 11 January 
    Today will see the House of Commons hold its third day of Brexit debate ahead of next Tuesday’s meaningful vote, which is expected to take place around 7pm.
    Just a couple of points to note from the past 24 hours, firstly you have seen two Tory MPs offering their support to May’s Brexit deal having previously been opposed. George Freeman and Trudy Harrison are the first Conservative Party MPs to publically switch their vote in favour of May’s deal and, while there
    still remains sizeable opposition to May’s deal within the Tory party, the switch in positions yesterday may suggest that with the clock running down and few other sensible options on the table more MPs may switch sides and back May in order to avoid a no deal scenario.
    Secondly there is some talk that the government may back an amendment put forward by Labour’s John Mann on social and environmental policy in the hope that it may bring a few Labour supporters on board. And finally, really just to clarify a point, but still worth noting, is that Jeremy Corbyn has not
    himself formally confirmed that he would bring a motion of no confidence in the government should Theresa May lose the meaningful vote next Tuesday. 

    Bercow lands government a body blow

    Thursday 10 January 
    The first day of the resumption of the Brexit debate resulted in the government’s second defeat of the week in the Commons, this time by 308 votes to 297. This was on an amendment, controversially permitted for vote by Speaker John Bercow, forcing the government to inform the Commons how it will proceed within three days, if it is defeated in Tuesday’s vote on PM May’s Brexit deal.
    Under the terms of the Withdrawal Act, the government would have had 21 days to respond. In what looks like a government loss of up to 100 next week, we would in any case have expected Mrs May to react quickly by asking for concessions from the EU on her Brexit plan.
    Moreover, although there is much talk about the Commons "taking back control" from the government, there does not seem to be a clear majority for any specific deal in Parliament (or indeed "no deal") and it might be that at the end of the day that a version of the PM’s deal scrapes through the Commons at the last minute.

    Parliament's Brexit vote (part 2)

    Monday 7 January 
    Parliament returns from its Christmas recess today, with MPs set to resume the debate on the Brexit deal, struck with Brussels before the festive break, on Wednesday.
    In an effort to try and win over support for the deal from her party, Prime Minister Theresa May has invited Conservative MPs to drinks receptions at 10 Downing Street both today and on Wednesday. While it is currently unknown how many days the deal will be debated for before it is put to a so-called meaningful vote, numerous media outlets report that 15 January has been pencilled in by the government.
    Indeed, the Prime Minister appeared to confirm such reports after being asked on the Andrew Marr Show whether the vote would take place on 15 January, to which she replied “That sort of timing, yes”.
    Note that if the government does indeed press ahead with its plans to hold the vote next week, then the latest day it can publically announce it is on Thursday as Leader of the House of Commons Andrea Leadsom will need to set it out in the order paper for next week.

  • February 2019

    Government accepts Cooper amendment as Labour backs second Brexit referendum

    Thursday 28 February 
    The latest evelopments on Brexit saw MPs vote on a number of amendments overnight. Most notably MPs voted overwhelmingly to back the Cooper amendment (amendment F), which had effectively given PM May a deadline of the 13 March to pass a Brexit bill.
    It was announced ahead of the vote that the government had accepted the amendment given that it put forward a very similar path to that outlined by the Prime Minister earlier this week. The amendment was passed with a vote of 502 MPs in favour. 
    Labour’s Brexit plan which sought a Brexit deal involving a customs union was defeated by 323 votes to 240, which subsequently saw the announcement from Labour leader Jeremy Corbyn that the party would formally back a second Brexit referendum. Additionally MPs approved PM May’s Brexit update she delivered to the House of Commons on Tuesday.
    Overall the votes last night do not materially alter the path of Brexit, predominantly as the PM had conceded several of the points from the Cooper amendment earlier this week when she outlined the government’s plans to hold a “meaningful vote” on or by the 12 March and laying out a path for further votes on “no deal” (on or by the 13 March) and a Brexit extension (on 14 March). 

    May lays out timetable for votes in March if parliament rejects her deal

    Tuesday 26 February 
    The Prime Minister has delivered a statement on Brexit to the House of Commons and how it intends to proceed. First, PM May outlined the current state of UK-EU talks. There was not much in terms of additional detail, but she summarised that recent discussions had focused on what was needed on the backstop arrangement for it to be passable through the UK parliament.
    Discussions also touched on the Political Declaration and again what could be done to reassure the UK. Talks are set to continue in the coming days, with the Attorney  General Geoffrey Cox returning to Brussels today. PM May and Jean Claude Juncker will then reconvene and take stock of developments before the "meaningful vote".
    The PM did however lay out a timetable of votes and marks mid-March as a very busy political period. As had been widely reported this morning PM May confirmed that the second “meaningful vote” on her deal would take place by 12 March. Subsequent to that, If Parliament rejects PM May’s deal, the House would then hold another vote on 13 March on whether Parliament accepts the UK leaving without a deal on 29 March.
    If Parliament rejects “no deal” there will then be a third vote on 14 March on whether Article 50 (i.e Brexit process should be extended). There is no specific detail on how long a extension would be, but the PM did point out that if Brexit was delayed beyond June the UK would need to participate in the European Parliamentary elections and highlighted the message that would send, hinting that the PM’s preference would be for only a short extension, ending before June. 

    Threat of no-deal Brexit subsides as momentum grows for Article 50 extension

    Tuesday 26 February 
    News late yesterday provided support to the pound as the two big stories seemingly lowered the perceived threat of a no-deal Brexit whilst also raising the possibility of the Brexit decision being reversed in its entirety.
    Various news sources were reporting last night that UK Prime Minister Theresa May would look to take the initiative and pave the way for a Brexit extension herself, if her Brexit deal is not backed in a “meaningful vote” on/by 12 March.
    This shift in position, looks to try and stem a rebellion from pro-remain MPs within her government ranks whilst also seeking to arm-twist the Eurosceptic ERG grouping to back her deal in the 12 March vote, given that they would see a delay to Brexit as particularly unwelcome.
    Note that there is no detail at this stage on what length of delay the PM might seek, though an amendment led by Simon Hart, a Tory backbencher, proposing a delay of eight weeks looks to be a key focus. A short delay such as this would look to be less politically damaging to the PM, who has so far insisted a delay would be avoided altogether. 
    The second piece of news was that the Labour party announced that it would back a new referendum on whether to leave the EU. Here Labour is expected to put forward an amendment today proposing a 5-point “alternative plan” for Brexit. It is then thought that if, as is likely, that plan is rejected by the House of Commons on Wednesday, the party will support a second referendum going forward.
    Note that the PM gives a statement in Parliament today, ahead of tomorrow’s vote on this progress update statement. Sterling is firmer against both the USD and the euro this morning. Indeed, Cable is at $1.3145 from just below $1.31 ahead of last night's news.

    May pledges to give MPs 'meaningful vote' on revised deal by 12 March

    Monday 25 February 
    Theresa May has pledged that a fresh ‘meaningful vote’ on a revised Brexit deal will take place in Parliament by 12 March. This appears to have arisen as a number of members of the government, including three members of the Cabinet, have indicated willingness to back the ‘Cooper/Letwin’ amendment on a vote on Brexit progress on Wednesday evening.
    This would direct the government to request an extension to the Article 50 process, should it not get a deal through Parliament by 13 March. The PM is currently in Egypt at an EU/Arab Summit at which relatively little concrete (in terms of Brexit) appears to have emerged.
    However it has been suggested that if the EU were to offer an extension to EU membership, it could be over a 21 month period. This could be designed to encourage the Tory Eurosceptics to back any revised deal that the PM puts to the Commons. Mrs May will be delivering a statement to the House tomorrow, before the debate the following day.

    Fitch puts UK's AA credit rating on 'negative watch' over Brexit uncertainty

    Thursday 21 February 
    UK PM Theresa May held important talks with European Commission president Jean-Claude Juncker yesterday evening. The “positive spirit” to the talks seems to have cleared the way for the two sides to actually get back to working out how the EU and UK might be able to agree the assurances on the Irish backstop, though there clearly remains quite a bit of work to be done.
    There will be three elements to the renegotiation talks. Efforts will made to see how the following could be achieved:
    1. Guarantees to emphasise “the temporary nature” of the backstop via “appropriate legal assurance”:
    2. Changes to the political declaration on future EU-UK relations to “increase confidence in the focus and ambition of both sides”:
    3. Efforts will also be made to look at “the role alternative arrangements could play in replacing the backstop in future”.
    This is clearly a welcome development for Downing Street, desperate to show some progress ahead of a vote in UK Parliament next week. At this stage however it still looks as if the next scheduled vote on 27 February would be a vote a progress report from PM May, rather than a meaningful vote.
    She is also desperate to show progress amidst the increased signs of turmoil within her own party, not least after three pro-remain MPs quit the Tory party to join the new Independent Group yesterday. Highlighting how little time is left now on the Brexit clock, Fitch has put the UK’s AA credit rating on “negative watch” over growing Brexit uncertainty, in what was an unscheduled update.

    Conservatives poised for defections to newly formed Independent Group

    Wednesday 20 February 
    A significant number of media stories overnight have pointed to the likelihood of three Tory MPs defecting to the newly formed Independent Group in parliament, whose tally increased to eight overnight. Robert Peston meanwhile is reporting that the number could be four.
    There is also talk that this could be announced today, perhaps ahead of PMQs at lunchtime and before PM May’s meeting this afternoon with Jean-Claude Juncker in Brussels. If this is true, we would note that even with DUP support, the government’s effective majority would be cut to 4 from 12 (Labour MP Paul Flynn died a couple of days ago).
    It is not clear how sterling would react. An even more perilous majority could add obvious downside. But it could be also argued that a greater centrist force in parliament makes a no-deal Brexit less likely. Also, newly defected MPs would be unlikely to want an election immediately as they have little in the way of campaign infrastructure and might be inclined not to support any vote of no confidence in the government.

    May backs away from Malthouse compromise

    Wednesday 20 February 
    Reports suggest that UK Prime Minister Theresa Minister May is backing away from the so called “Malthouse compromise” which, among other elements, would have looked at alternatives to the Irish backstop. Instead Mrs May is now focusing her efforts once again on legal assurances that would reassure on the UK’s ability to unilaterally exit the Irish backstop.
    This shift comes amidst concerns that there was not the time to work on the Malthouse plan ahead of Brexit. It also comes ahead of PM May and Attorney General Cox heading for important talks in Brussels from today which are also sought to focus in on backstop assurances.
    Note that Bloomberg is leading with the story that the Prime Minister is targeting a Brexit deal within days, however comments from key EU officials suggest there is much ground to cover. Focusing the mind of the Prime Minister is a vote in the UK Parliament on 27 February, which could become a “meaningful vote” if major steps forward are achieved in talks this week; if they are not this is likely to be a vote on a progress statement.
    Separately, while May is battling over in Brussels, Labour’s Jeremy Corbyn faces an ongoing battle amidst his own MPs, with an eighth Labour MP leaving for the new centrist The Independent Group yesterday.

    MPs inflict another embarrassing defeat for May over Brexit negotiations

    Friday 15 February 
    Parliamentarians have rejected the government's negotiating strategy for Brexit after voting down a motion that effectively endorsed the two amendments backed by MPs last month; to replace the Irish backstop with “alternative arrangements” and reject a no-deal Brexit.  
    Demands from the Eurosceptic Tory European Research Group (ERG), who pushed for the government to adopt the so-called Malthouse Compromise were rejected by Prime Minister Theresa May, resulting in a large number of the group choosing to abstain from the main vote.
    They were joined by a number of Europhile Tories, who opposed the reworking of the backstop. All in all, 67 Conservative MPs chose to remain seated in the Commons rather than pass through the division lobbies, resulting in the government losing the vote by 303 to 258 (a majority of 45).

    May seeks backing of MPs for more time on Brexit negotiations

    Thursday 14 February 
    Today Prime Minister Theresa May is set to table a motion effectively endorsing two amendments backed by MPs last month, to replace the Irish backstop with “alternative arrangements” and to reject a no-deal Brexit.
    By doing this she is seeking backing of MPs for more time to get a workable concession on the backstop and to continue talks with the EU to achieve this. The last bit of the motion, on rejecting no deal, was inserted in the previous Brexit ‘Plan B’ vote as an amendment tabled by Tory MP Caroline Spelman; note though that it is only symbolic.
    However, despite its symbolic nature, reports suggest that Eurosceptic Tories say would vote against today’s parliamentary motion unless it was reworded to make clear a no-deal Brexit remains on the table. Talks with whips will continue through the course of the day, but note that the Sun reports that if May does not back down, up to 50 Eurosceptic Tories could vote against or abstain tonight, likely leading to a defeat for the PM.
    There will also likely be various amendments voted on; Speaker John Bercow will decide which ones later this morning.  Voting is due to begin at 5pm and each vote will take around 15 minutes, with the final vote on May’s motion including any successful amendments.
    Note that if May is defeated, this will look to be a further blow to PM May’s Brexit strategy, which has suffered after her right hand man and main official on Brexit Olly Robbins was overhead in a bar reportedly saying that the final Brexit vote would not include the choice of a no-deal Brexit but rather a lengthy Brexit delay, set against the option of taking PM May’s deal. A loss tonight will likely make the EU less inclined to offer PM May a compromise on the Irish backstop option. It would also likely further embolden UK Parliament in taking greater control of Brexit.

    May’s chief negotiator overheard gossiping with colleagues on Brexit options

    Wednesday 13 February 
    ITV News has reportedly overheard the Prime Minister’s chief Brexit negotiator, Olly Robbins, gossiping with two colleagues in a Brussels hotel bar about Brexit, the Cabinet and MPs. His remarks cast doubt on the Prime Minister’s threat to MPs that failing to back her negotiated treaty with Brussels would result in a “no deal” Brexit on 29 March.
    Instead, Mr Robbins suggests that MPs will instead be presented with a different choice in the “week beginning end of March”; either vote for the Prime Minister’s revised deal or face a lengthy extension to Article 50. This follows reports that the EU would allow the UK to extend the Brexit process, but potentially for a minimum of a year to allow for a more fundamental shift in Westminster’s Brexit
    On this front, Mr Robbins is said to have remarked that “the issue is whether Brussels is clear on the terms of extension… in the end they will probably just give us an extension”. He was also reported to have outlined a strategy to satisfy parliament’s distain for the Irish ‘backstop’, saying the European Commission would need to agree that the word “necessary” in the protocol is defined as “necessary subject to the future trade deal”.
    Currently the text of the protocol specifies that the backstop must “maintain the necessary conditions” for North-South cooperation under the Good Friday Agreement. Overall, providing Mr Robbin’s comments are indeed genuine, they will no doubt frustrate the government’s Brexit plan and put further pressure on the Prime Minister.

    MPs debate government motion on plans to continue talks with Brussels

    Monday 11 February 
    On Thursday UK MPs are set to debate a government motion, with that expected to outline the government’s plan to continue talks with Brussels and try to extract the necessary concessions on the Brexit process and the Irish backstop in particular.
    MPs are then expected to vote again on a series of amendments, which might limit the PMs flexibility going forward. The government is seeking to quell a rebellion by guaranteeing another amendable motion will be brought back before parliament “no later than 27 February.”
    Note that this would not be the next meaningful vote, which the Sunday papers are speculating might even be pushed right back until a week before Brexit after the European Council on 21 March. Note that these worries about such a compressed timescale will underpin amendments brought forward this week.
    Indeed the Sunday Times is reported that the Shadow Brexit Secretary Keir Starmer was looking at an amendment which would “compel the prime minister to hold another ‘meaningful vote’ before 26 February”.

    Markets holding out for a last-minute breakthrough

    Wednesday 6 February 
    By Kevin Musisi
    Ahead of key meetings in Brussels on Thursday, the Prime Minster maintained her stance on Northern Ireland reaffirming her commitment to seek changes to the backstop border arrangement to secure support for her withdrawal agreement with the European Union.
    With 29 March fast approaching it seems the PM will tell EU leaders they must accept legally binding changes to the Irish border arrangements in the divorce deal or face the prospect of a disorderly no-deal Brexit.
    A Reuters poll released today pointed to sterling gaining between 2%-5% if the UK leaves the EU with a divorce deal but will slide between 5%-10% in the event of a disorderly Brexit. Investec Economist George Brown, remarked: “The rationale would be that markets are going to wait right up until the last possible moment to sell off in terms of how a no-deal might materialise. Markets will hold out for a last-minute breakthrough”.
    More modest gains would also be seen if a deal is reached because it would take form over time, and so should gradually be priced into the currency.

    May seeks to reassure Northern Ireland of her intention to avoid hard border

    Tuesday 5 February 
    In the latest developments on Brexit, PM May will today be delivering a speech in Belfast, where she will be aiming to reassure Northern Ireland that she intends to secure a deal with the EU which avoids a hard border between Northern and the Republic of Ireland.
    PM May will also be staying in Northern Ireland tonight ahead of talks with key political leaders there Wednesday morning. At the centre of this debate remains the contentious backstop plan.
    On this topic the Alternative Arrangement Working Group held its first day (of three) of discussions yesterday on an alternative backstop plan; talks were described as detailed and constructive, but as yet no firm new proposals have arisen.
    The EU for its part is maintaining a hard line, with various EU officials reiterating that there will be no legal changes to the Withdrawal Agreement. Other Brexit news has also seen reports that the UK is preparing to wave freight traffic through its ports without checks in the event of a no-deal Brexit in order to avoid the possibility of extended delays and chaos at UK entry points. 

  • March 2019

    MPs reject May's Withdrawal Agreement

    Friday 29 March 
    MPs have rejected Theresa's May's Withdrawal Agreement by 344 votes to 286, a majority of 58.
    This came despite a last-minute offer from Mrs May to give MPs a "significant and ongoing role in the next phase of talks". Following the defeat, the Prime Minister has said that the House of Commons will look at alternative approaches on Monday, presumably as part of the indicative votes process that has been spearheaded by Sir Oliver Letwin MP, and pledged to press the case for an “orderly Brexit”.
    This is a clear step down in tone from the Prime Minister who appears to have concluded that she has finally run out of road. Note also that President Donald Tusk has immediately called an emergency European Council Summit on April 10 (two days before the UK is now set to leave the EU).
    We suspect that today’s defeat, and the Prime Minister’s statement, means that we are on course for an eventual ‘softer’ Brexit. But markets have not taken well to the uncertainty; cable has fallen around 80 pips to below $1.30 while 10-year gilt yields have dropped 5bp to 0.98%. 

    MPs to vote on Withdrawal Agreement as May splits her deal in two

    Friday 29 March 
    The government has confirmed that it will hold a vote on the Withdrawal Agreement today. The vote is scheduled for 2.30pm, but there is a notable difference from the previous meaningful votes, with today’s vote being solely on the Withdrawal Agreement and excludes the Political Declaration, which sets out the UK’s future arrangements.
    One reason for the change was to get around Speaker John Bercow’s insistence that a third meaningful vote would need to be on proposition that included substantial changes. In an attempt to secure more votes in support of her deal, PM May offered a path for her departure earlier this week, but despite these overtures it remains an uphill task for PM May to win this afternoon’s vote given continued hold outs from ERG members and the DUP. 
    If the government were  to lose this afternoon’s vote it would mean that the UK’s exit day would move to 12 April. 

    MPs fail to agree on alternative Brexit plans

    Thursday 28 March 
    Last night MPs were given a free vote on eight alternative plans for Brexit, with Cabinet ministers abstaining. As expected, none of these commanded a majority, but suffering the narrowest defeats were proposals for a customs union (defeated by 8) and a second referendum (defeated by 27).
    Parliament also voted 441 to 105 in favour of a Statutory Instrument which amended the definition of “exit day”. This will now be 22 May if MPs approve the Withdrawal Agreement, or 12 April if they fail to do so. Attention now shifts to whether the government will choose to hold a third “meaningful vote” (or MV3) tomorrow (if it is even allowed to by House of Commons Speaker).
    In an effort to shore up support for her deal from her own party, the Prime Minister told the 1922 Committee of backbench Tory MPs that she would not lead Britain into the “second phase of the Brexit negotiations” if it meant that her deal was approved by Parliament. But she also needs to win the support of her confidence and supply partner the DUP, who told Sky News yesterday that they could not “be in favour of something that threatens the union”.
    Talks between the Conservatives and the DUP will continue today, but as things stand the Prime Minister faces a monumental task in winning the backing of the Northern Irish party, eurosceptics and Labour waverers. Sterling is lower amid the continued uncertainty and is currently trading at $1.3184.

    Wednesday 27 March 
    Today MPs will take control of the House of Commons agenda from the government in an effort to determine whether any alternatives to the Prime Minister’s Brexit deal can command a parliamentary majority.
    After the weekly Prime Minister’s Questions slot at midday, MPs will from 2pm hold a debate on the various Brexit options available to them, including those that would seek to overturn the UK’s departure from the UK altogether. Subsequently, the Speaker will then select which of these Brexit alternatives should be put to so-called indicative votes which MPs will indicate their support or opposition to by writing either “aye” or “noe” next to them on a single ballot paper.
    Voting is set to begin from 7pm, with the result expected around 9pm. There is then expected to be a second phase of voting on a short list on Monday. It remains to be seen whether any outcome can gain sufficient support to give clarity on how to take the Brexit process forward, which is something that would likely be required if the UK were to seek an extension from the EU taking Brexit beyond 12 April.
    Note that there is a meeting of the Eurosceptic ERG at 5pm, where there is much speculation the PM could provide clarity on her departure date in a last ditch effort to get her deal over the line in a third meaningful vote tomorrow. There are various reports that the sands are shifting within the ERG, with perhaps only 15 hardliners now pushing against May’s plan.
    The DUP’s latest position remains unclear; Sammy Wilson yesterday indicated he would favour a further Brexit delay of 12 months over May’s deal, but reports indicate he does not necessarily speak for the DUP overall, which is interesting given he is the DUP’s Brexit spokesperson. If PM May did manage to pull off and succeed in gaining backing for her deal in a 3rd “meaningful vote” before the end of this week, this would set the exit date to 22 May, rather than 12 April. 
    However the arithmetic, even with the shift in the ERG, still looks challenging. Finally note that on the subject of the UK’s exit date, Parliament today will vote on the Statutory Instrument which would change this date in UK law.
    A rejection of this would not prevent the UK’s extension to 12 April (or 22 May) taking effect (as EU law has supremacy), but it would be a further blow to the already weakened PM and a disruption to today’s events in Parliament. 

    MPs seize control of Brexit

    Tuesday 26 March 
    Last night MPs voted for an amendment put forward by Tory MP Oliver Letwin, passing by a vote of 329 to 302. This effectively allows MPs to take control of House of Commons business this Wednesday and provides time for a series of ‘indicative votes’ to be held.
    Notably 30 Tory MPs supported the amendment, with three Tory MPs resigning from their junior ministerial positions in order to support the amendment. At present we do not know what the exact propositions the indicative votes will be on, some suggestions include May’s deal plus a customs union or Nick Bole’s Common Market 2.0 (May’s deal plus custom union and single market access), and neither do we know how the voting process will take shape.
    It is still not clear whether there is a majority in the House for any one Brexit plan. Whatever the outcome of the indicative votes it is worth remembering that the results are non-binding on the government.
    In terms of the third meaningful vote there is still a lack of clarity as to when this might take place, previously there had been some expectation that it would take place today, but given that the government still lacks the support of the DUP and Tory Eurosceptics for PM May’s deal the exact date remains unclear. 

    Cabinet consipracy to oust May vanishes, but Brexit impasse remains

    Monday 25 March 
    16.30 update
    The PM's statement to Parliament this afternoon did not deliver the much hoped for clarity amidst all the Brexit uncertainty. As per reports, she said she does not have the votes to pass her deal at this stage and therefore we do not expect an imminent third "meaningful vote”.
    Mrs May also seemed to accept that the Oliver Letwin amendment – which seeks a series of indicative votes – could well pass (if selected) in tonight’s vote. That would pave the way for those indicative votes to be held, perhaps on Wednesday, but PM May rightly made clear that even these may well not clarify what the next step should be and may not recommend an outcome the government can take to Brussels (to secure a further extension beyond 12 April, if required).
    PM May also appeared to be still pressing MPs to get behind her deal as a “compromise” outcome to avoid no-deal and to avoid having to take a longer extension which she mentioned again would involve participation in European parliamentary elections and possibly a 2nd referendum.
    Needless to say, with much resistance to her deal still, something needs to shift to get the DUP and others to back May’s deal (before the end of the week if we are to get the extension to 22 May) and it is far from clear what that is. Finally note that the government has today laid the secondary legislation to change the exit date in law, though PM May effectively said it would not matter if this did not pass (i.e. the UK will not leave the EU this Friday now).

    Monday 25 March 
    Following a shambolic week last week, yesterday’s newspaper headlines all featured a Cabinet plot to oust Theresa May as PM and replace her with either David Lidington or Michael Gove as a ‘caretaker’.
    This conspiracy appears to have died a sudden death, but we seem to be no nearer to a resolution of the wider Brexit issue. Mrs May met key ERG members at Chequers yesterday to gain support for her deal, but reports suggest that this was unsuccessful with the PM refusing to agree to step down as a condition for the ERG’s support.
    It is not clear that the third meaningful vote will take place at all this week and a Cabinet meeting this morning will discuss the way ahead. This afternoon the PM will make a statement in the House on last week’s events in Brussels, but an amendment from Oliver Letwin, if called and passed, looks set to allow MPs to take control of Commons business to enable indicative votes on various alternative Brexit options.
    To head this off, it is possible that the government itself proposes that these votes take place.  Such a debate could take place on Wednesday, although this is not yet confirmed. We also note that the government will be laying the secondary legislation this week to enable the default Brexit date to be moved back by two weeks to 12 April, from 29 March.     

    EU sets terms on Article 50 extension

    Friday 22 March 
    Following eight hours of fraught late-night talks, leaders of the remaining 27 EU nations agreed to extend the UK’s Article 50 period beyond its initial expiration of 29 March. However, the length of the extension is dependent upon whether or not the Prime Minister can get the deal through the House of Commons next week.
    Providing that she can successfully win parliamentary backing through a third “meaningful vote” (MV3), then a short technical extension to 22 May will apply for the purposes of passing the necessary legislation.
    If she fails to do so, then the delay will only run until 12 April, at which point the Prime Minister would be required to “indicate a way forward”. The significance of these dates is that they relate to this year’s European Parliament elections; these are set to be held between 22-23 May, with the UK’s participation required to be decided by 12 April under domestic law.
    Though the EU’s offer was shorter and more complex than the straightforward extension to 30 June sought by the Prime Minister, it is nonetheless helpful for Downing Street in a number of ways; while it pushes back the “cliff-edge” by a fortnight, at the same time it keeps both a long extension and a disorderly divorce on the table.
    This is important as this will allow the Prime Minister to use the threat of each to help coax the various wings of her party into supporting the deal. But despite the offer made at yesterday’s Summit, the Prime Minister still has a mountain to climb if she is to overturn the 149 majority of MPs that rejected her deal in MV2.
    Domestic sentiment has nevertheless been assuaged by the EU’s offer; cable has climbed off yesterday’s lows of $1.30 and is currently trading at $1.3133.

    EU open to short extension, but only if May gets Parliament to approve her deal

    Thursday 21 March 
    The EU said yesterday that it was open to a short technical extension of the Article 50 period in response to Theresa May's formal request for a short extension to 30 June. But this would be conditional on the PM being able to pass her deal through the House of Commons next week and, would only be until the 23 May (i.e. the start of European Parliament elections).
    In terms of the calendar for next week the Government will lay out
    the motion on Monday, with the third “meaningful vote” (MV3) rumoured to be either Tuesday or Wednesday, but we await confirmation.
    The arithmetic for passing Theresa May’s Brexit plan remains daunting, MV2 saw the government’s Brexit plan defeated by 149 votes and whilst we suspect that some eurosceptic MPs and the DUP will eventually support the deal, there remains an element of the Tory Party which is unlikely to support PM May’s deal no matter what.
    The PM herself delivered a speech last night appealing to the public and attempting to put pressure on MPs to support her deal, but if anything the reaction from MPs has been one of anger. One big question is what happens if MV3 fails to pass next week.
    In this case it is possible that the EU offers a long extension to avoid a ‘no deal’ on the 29 March via an emergency summit at the end of next week, but any long extension is likely to be met with strong conditionality, with the phrase ‘new political process’ mentioned in various places. 
    We may learn more about the EU’s extension options at its summit latter on today, but the noises coming from some EU capitals have not been particularly positive, with Belgium, France and Spain all voicing their concerns overnight. 

    May asks for three-month extension: ‘UK has been waiting long enough.’

    Wednesday 20 March 
    The PM delayed sending a letter to the EU last night, which would have stated the nature of her request for an extension to the Article 50 negotiating process. There had been reports that Mrs May was going to ask for a 3-month delay to the UK’s EU departure, with the option of a longer (perhaps 21-month) postponement.
    But reports published earlier this morning indicate that Number 10 will simply request a 3-month ‘technical’ extension, seemingly because the country has been waiting ‘long enough’. The political read through is that a longer delay would be accompanied by demands by Brussels that it forges a consensus behind any deal, perhaps via a General Election or a second referendum.
    The PM would consider these conditions to be toxic. By taking this course Mrs May appears to be staking everything on being able to hold (and win!) a third meaningful vote on her deal by the end of next week. Note that the EU Summit takes place tomorrow and Friday.

    Government to request Brexit extension as Tories threaten to go on ‘vote strike’

    Tuesday 19 March 
    Following yesterday's ruling by the House of Commons Speaker John Bercow there is much confusion on what the government’s next steps will be, with Downing Street having made clear that it was blindsided by Mr Bercow’s move.
    It is taking legal advice to look at its options, but with the EU making clear negotiations over the deal have now ended (and therefore the scope for a meaningfully different version to be presented at this point), there is little hope Mrs May will be able to find a way to hold a third vote this week.
    The government is busy preparing for the EU Summit Thursday/Friday at which it is expected to formally request an extension. It is being reported in The Sun that this would be a 9-12 month extension, though the EU may well push back, looking for a longer period to allow a referendum (or other more substantial) changes to be made to the UK’s plans.
    Amidst talk of a lengthy extension, there is word of further frictions between the PM and the Eurosceptic ERG amid reports some Tory MPs could go on vote strike if a lengthy extension is pushed forward, raising the prospect of the government failing to pass any confidence test (motion) that is brought forward in Parliament.
    As things stand at the moment, it does look as if the next concrete step from the government will be the formal Article 50 period extension request, to which we will no doubt hear much more from Brussels on the acceptance of this (and conditions that would be attached) on Thursday evening, if not before. 

    Speaker rules out third ‘meaningful vote’ without substantial change

    Monday 18 March 
    The Speaker of the House John Bercow has delivered a statement to the House of Commons addressing a question put forward last week on whether the Government could continually bring forward a vote on the same proposition.
    Essentially Mr Bercow addressed MP’s questions over whether the government’s plans to bring forward another “meaningful vote” (MV3) on PM May’s Brexit plan contravened the Parliamentary rule book on re-proposing “matters that had already been decided in the same session”.
    While the speaker has not formally ruled out a third meaningful vote at this point, he has made it clear that the government “cannot legitimately resubmit to the House the same proposition”. In layman’s terms the speaker is arguing that if the government wants to hold a third vote it needs to be on something which is substantially different, the suggestion from the speaker being that it needs to include changes which have EU agreement.
    Today’s interjection from the speaker represents an issue for the government which had been hoping to bring forward MV3 once it had won support from the DUP. As such it is becoming increasingly likely that MV3 may not happen at all this week, with reports this afternoon suggesting that the government was itself moving towards a vote next week given the lack of an agreement with the DUP over the weekend.

    MPs vote to extend Article 50

    Friday 15 March 
    Last night MPs voted in favour (by 412 to 202) on the unamended government motion on whether to request an extension to the Article 50 period beyond 29 March. As such Parliament has now backed the notion that if a Brexit deal is reached (backed by the UK Parliament) by March 20, the UK will ask for the Brexit negotiating period to be extended until June 30, just before the new European Parliament meets.
    If a deal is not agreed before 20 March, the second part of the motion sees Parliament recognise that “it is highly likely the European Council at its meeting the following day would require a clear purpose for any extension, not least to determine its length, and any extension beyond 30 June 2019 would require the United Kingdom to hold European Parliament elections in May 2019”.
    The motion has paved the way for PM May to have a third attempt at getting her “meaningful vote” passed next week with the second point in the motion clearly another big hint to the Eurosceptic ERG that they might want to back PM May’s deal in the next “meaningful vote” if they want to avoid a lengthy delay and with it limit the risk of a second referendum or General Election.
    May might be banking on additional legal advice from Attorney General Geoffrey Cox, and a threat of a lengthy delay, to get her deal across the line.
    Of course, the arithmetic still looks very challenging given that May suffered a defeat of 149 votes on the Brexit deal vote earlier this week. Importantly also, although the vote on the overall motion today was a free vote, numerous senior Cabinet ministers (Gavin Williamson, Stephen Barclay and Liam Fox) were seen in the ‘no’ lobby, highlighting the battle the PM faces in bringing even her own government together. In terms of a third “meaningful vote”.
    PM May might be banking on additional legal advice from Attorney General Geoffrey Cox (based on Article 62 of the Vienna Convention), alongside the threat of a lengthy delay, as a route to get her deal across the line. Even so, this looks to be an uphill struggle for the PM, even if she manages to get her confidence and supply partner, the DUP, to back the deal next week.
    The extension request is now expected to be taken to the 21-22 March EU Summit and would no doubt be subject to plenty of horse trading, with it needing the backing of all other 27 EU member states and with various permutations possible. Sterling actually weakened a bit after the final vote count came in, with cable at $1.3248 (from $1.3280 before), with much being made of the ‘no’ voting senior Cabinet ministers.

    MPs reject leaving EU with no deal

    Thursday 14 March 
    Following last night’s pandemonium in the Commons, we move on today to a debate (and votes) in Parliament on whether to request an extension to the Article 50 period beyond 29 March, with Parliament having voted to express a desire to avoid no-deal last night.
    In the government’s motion, Parliament is asked to agree that if a deal is reached by March 20, the day before the 21-22 March EU Summit, Britain would ask for the Brexit negotiating period to be extended until 30 June, just before the new European Parliament meets.
    Here May seems to be planning on holding a third “meaningful vote” in Parliament next week, presumably based on some additional legal advice from Geoffrey Cox (based on the Vienna Convention) and amidst numerous reports of talks being held with her DUP confidence and supply partner in which Mrs May is seeking to persuade them to come onside with her plan.
    The second part of tonight’s motion states that if no deal was agreed by March 20, “then it is highly likely the European Council at its meeting the following day would require a clear purpose for any extension, not least to determine its length, and any extension beyond 30 June 2019 would require the United Kingdom to hold European Parliament elections in May 2019”.
    Here PM May is again focused on arm-twisting the Eurosceptic ERG to come on side with her plan, amidst the threat that a longer delay could bring with it a 2nd referendum and the eventual (possible) cancellation of Brexit altogether. Today there are numerous amendments being made to the government’s motion which could pave the way to further chaos in Parliament this evening.
    There will be attempts on various fronts to move away from May’s plan as other factions in Parliament seek out other options, such as a shift to a European Economic Area and Single Market model, amidst others. Depending on  developments today and PM May’s success in progressing a further “meaningful vote”, we may also see a series of indicative votes on future framework options next week.
    Note finally that there are wide variety of opinions across European capitals over what might be requested of the UK, in exchange for an extension, with the extension requiring a unanimous vote from EU27 countries. Ahead of next week’s EU Summit, EU diplomats are reportedly circulating possibilities for consideration. Votes tonight are expect to commence from 5pm onwards.

    Wednesday 13 March 
    On Wednesday the House of Commons voted on the government’s motion to reject the UK leaving the European Union without a deal. The motion was initially worded to rule out a “no-deal” scenario on the 29 March. However, amendment A (Spelman/Dromey) was passed by a vote of 312-308, which rejects leaving without a deal completely.
    The second amendment (F) on the so called Malthouse compromise was voted down by 374 to 164. The main vote on the government motion, as amended, which ruled out ‘no deal’ entirely was passed by 321 votes to 278.
    However the final vote was not as straightforward as had been initially expected due to the Spelman amendment. Given the amendment, the government did an about-turn and ordered its MPs to vote against the motion, but this failed and the government was defeated with several high profile ministers ignoring the whips by abstaining (Rudd, Gauke and Clarke are believed to have abstained).
    Sarah Newton also resigned after voting for it. Just to note that whilst the passing of the motion formerly expresses parliament’s view that it rejects any ‘no deal’ and sends a strong statement, it is non-binding and legally does not take a ‘no deal’ scenario off the table.
    Sterling has risen following tonight’s events with cable now trading at $1.33. Looking forward, the result of this evening’s vote paves the way for another vote in the House of Commons tomorrow evening on whether to request an extension of Article 50. 

    Government releases tariffs on imports in ‘no deal’ situation

    Wednesday 13 March 
    The media this morning is very mixed about the likely way forward, with several plans in the running:
    • A third meaningful vote
    • An alternative cross-party motion on a different form of deal
    • The PM being asked to resign
    • Asecond referendum
    • A General Election; and 
    • Talk of an extension to the UK’s EU membership.
    Earlier this morning the government stated that it would eliminate a number of tariffs on imports in a no-deal situation – there is little granularity so far, but there are no plans to levy any tariffs on imports to Northern Ireland from the Republic.
    Tonight sees a vote on whether the Commons will accept leaving the EU without a deal. It will be a free vote and the PM hinted last night said that she would vote against ‘no deal’. If rejected by the House, as most expect, a vote on applying for an Article 50 extension will take place tomorrow evening.
    The EU has indicated that it will only grant such an extension if the government demonstrates a clear reason for such a request.

    Tuesday 12 March 
    20:00 update
    The PM lost the second meaningful vote on her Brexit deal in the House of Commons on Tuesday evening by a margin of 391 to 242, a defeat of 149. A number of Mrs May’s own Conservative MPs voted against her, mainly members of the ‘eurosceptic’ European Research Group (ERG).
    They were joined by the 10 MPs from the Northern Irish DUP, which props up the government. The overall numbers compare a little more favourably with the calamitous margin of 230 in January, but events nonetheless represent a categorical rejection of the deal which leaves the nature of the UK’s future relationship with the EU very unclear.

    Legal risks of Irish backstop remain unchanged, says Attorney General

    Tuesday 12 March 
    The Attorney General (AG) Geoffrey Cox’s assessment of last night’s Brexit agreements has just been published. Crucially his overall assessment that the UK will be not be able to unilaterally extricate itself from the backstop is unchanged from his previous opinion.
    The AG does acknowledge that the clarifications provide some legal weight and that they reduce the risk that the UK could be “indefinitely and involuntarily detained within the backstop”. He also stated he has no doubt that they provide a binding reinforcement of the UK’s legal rights (if the EU did not act in good faith).
    However, importantly he continues to state that in his opinion, the legal risks remain unchanged, in that the UK would have “no internationally lawful means” of exiting the backstop unilaterally.
    The unchanged opinion of the AG may only partially soothe Tory Eurosceptic fears that the UK could be trapped indefinitely within the backstop and will likely erode hopes that the “interpretations” agreed last night would be able to sway some MPs to support Theresa May’s deal.
    Sterling is falling sharply on the back of the headlines, as markets reappraise the prospect of PM May’s deal winning approval at tonight’s vote, with sterling falling to $1.3008 vs the US dollar.
    13.30 update
    Ahead of tonight’s “meaningful vote” on the Brexit deal, it looks as if May is facing another chunky defeat. This afternoon the Eurosceptic Conservative ERG wing said that the legal advice does not meet the tests the government set itself; the ERG has subsequently explicitly recommended not backing the government's motion. 
    The government’s confidence and supply partner the DUP has also said it will vote against the deal. The Attorney General gave as robust a defence as possible of the advances in the UK’s legal position, given last night’s concessions from the EU. But his advice was that the UK still has no right to withdraw unilaterally from the backstop (if it is triggered).

    May secures ‘meaningful legal assurances’ over Irish backstop

    Tuesday 12 March 
    Ahead of today’s “meaningful vote” in the British Parliament, Prime Minister Theresa May has secured further legal assurances from the EU which she hopes will reassure MPs to back her Brexit plan.
    Specifically they are aimed at reducing concerns the UK would be unable to unilaterally extract itself from the Irish backstop, which is there to maintain the commitment to avoid a hard border on the island of Ireland. There are three parts to the reassurance package, which would sit alongside the Withdrawal Agreement, which has not been amended.
    The European Commission President Jean-Claude Juncker said these amounted to “meaningful legal assurances”. The first is a joint interpretative instrument which states that the EU could not deliberately seek to keep Britain in the backstop by not negotiating, in good faith, a new trade deal.
    The instrument makes clear that if it did, the UK could seek arbitration and an exit from the arrangement. The second is a joint UK/EU statement in the political declaration which commits both sides to developing new technologies to replace the need for the backstop.
    The third is a UK (only) declaration which states that there would be nothing to stop Britain launching a process to get out of the backstop, if the EU does not again act in good faith on trade discussions. All three planks are aimed at bolstering the UK’s legal standing in any dispute over whether the UK could extract itself the backstop (a temporary customs union) and thereby move on to sign its own trade deals.
    Today we will hear updated legal advice from Attorney General Geoffrey Cox on this point. MPs in Parliament are scrawling through the details of the instrument/declaration whilst awaiting Geoffrey Cox’s updated legal opinion.
    Ahead of this and a meeting of key ERG members we have heard relatively little by way of response, though the ERG’s Jacob Rees-Mogg tentatively indicated that the text looked to be a move in the right direction. The government’s confidence and supply partner the DUP has yet to state its view either.
    The arithmetic for PM May in tonight’s vote, even if the ERG flips to back the Brexit deal, would still be tight, but certainly after last night’s changes there looks to be a greater chance of success for the PM. The votes, including on amendments to the government’s motion, are expected to commence from 7pm today.

    PM pressed to set resignation date in last-ditch bid to get Brexit deal through

    Monday 11 March 
    In what is set to be a huge week for Brexit developments, there is much uncertainty over how events will pan out. Talks with Brussels have made little progress on the Irish backstop issue and as such PM May looks set to be faced with putting a virtually unchanged Brexit deal to Parliament (as the one that was defeated by 230 votes in January), or finding a way to pull the vote.
    It is not clear if PM May will even head to Brussels today to try and squeeze out last minute concessions, having said this morning that talks are deadlocked. If PM May does press ahead with the vote the timing would be for the “meaningful vote” to take place tomorrow; this would likely lead to a defeat for the PM and would therefore likely be followed by a vote on whether Parliament can back no deal and if that fails, over whether to seek an extension to the Article 50 period from Brussels.
    There are numerous reports swirling around such those suggesting the PM will have to set a forthcoming date for her standing down as PM, for her to get the Eurosceptic ERG on board to back her in this week’s big vote. But even then, it would remain to be seen if she would have the numbers. Needless to say, with Brexit day looming ever closer, sterling is reflecting this chaos in Westminster with cable down at $1.2990 this morning.

    Downing Street braced for defeat after lack of progress in talks

    Friday 8 March 
    Reports suggest a distinct lack of progress in talks with Brussels on the Irish backstop, with no. 10 preparing itself for another loss in the meaningful vote on Tuesday, unless things change dramatically over the next few days.
    One plan suggested is that on a defeat, debates on whether ‘no deal’ is acceptable and a request for an Article 50 extension will both take place on Wednesday, instead of Wednesday and Thursday as currently envisaged. The government is also under pressure to hold a series of indicative votes on various trading arrangements next week, if and when Mrs May loses.
    Meanwhile the PM is due to give a speech in Grimsby at lunchtime today. It is not clear whether she is due to go to Brussels over the weekend and/or Monday, bearing in mind what currently appears to be a serious deadlock.

    EU urges UK to table fresh proposals after existing ideas fail to gain traction

    Thursday 7 March 
    Talks between the EU and UK negotiators continued at official level yesterday, but while they were said to have been conducted in a constructive atmosphere they were described as “difficult”. It is clear that there is much ground to cover if PM May is to secure a sufficient concession on the Irish backstop that will be enough to persuade MPs, particularly the eurosceptic ERG, to back her Brexit plan in a meaningful vote next week (expected 12 March).
    Talks look set to run to the wire amidst discussion that the Prime Minister could be in Brussels as late as Monday trying to find a compromise.
    Meanwhile EU officials have urged the UK to table fresh proposals within the next 48 hours after ideas tabled by UK Attorney General Geoffrey Cox seem to have failed to gain traction so far.
    In the search for new ideas, the UK is to set up three Brexit advisory groups to find alternative arrangements for the Irish border.  One group will consist of technical experts in trade and customs, which will review advanced use of IT systems and “cutting-edge technologies”. The others will be a business and trade union engagement group and a parliamentary engagement group.

    Hope for May as ERG hints at compromise over Irish backstop

    Monday 4 March 
    Developments over the last week have, if anything. seen some marginal progress at home. Notably there has been more talk of PM May possibly being able to get her deal through parliament in a “meaningful vote”. 
    Various reports over the week have suggested that there has been some softening among Tory Brexiteers, with the ERG reportedly willing to compromise over the backstop, if they are provided reassurances that the UK would not be stuck within it indefinitely.
    The weekend’s press has also been led with reports that Brexiteers may be willing to support changes to PM May’s deal should it meet 3 tests:
    1. That the mechanism is legally binding
    2. The language cannot be a reinterpretation of the Withdrawal agreement
    3. There is a clear exit route.
    There is still no formal word from Brussels on any agreement, but we would expect the EU to offer some kind of compromise to try and help PM May pass a Brexit deal through parliament, most likely in the form of a codicil.
    Any deal is currently scheduled to be put to the House of Commons on or before the 12 March for a “meaningful vote”, but there have been a number of reports suggesting that there may in fact be two “meaningful votes”, with the first one taking place this Wednesday (6 March). 


  • December 2018

    Corbyn tables motion of no-confidence in May

    Tuesday 18 December
    Labour leader Jeremy Corbyn has tabled a motion of no-confidence in PM May, saying she has led the UK into a national crisis after she indicated the ‘Meaningful Vote’ on the Brexit deal would not now be held until the week of 14 January.
    Downing Street was dismissive of the move however, which is not a formal motion of no-confidence in the government and therefore does not have to have time allocated for a debate in Parliament. It remains to be seen whether the largely symbolic Labour motion will be debated this week, though indications are that it would not.
    Labour leader Jeremy Corbyn speaks with volunteers as he eats a Christmas Lunch at Nelson Hall Community Centre on December 16, 2018

    Labour leader Jeremy Corbyn is coming under pressure to call a vote of no-confidence in the government

    Note that the SNP, Lib Dems, Plaid Cymru and Greens have called on Mr Corbyn to press for a no-confidence vote against the government too, though at this stage the Labour leader appears reluctant to do this, particularly given that a number of anti-May Tory MPs have dismissed suggestions they would support Labour in such a vote.
    The Prime Minister appears set on trying to get to the Christmas parliamentary recess starting Thursday, with the strategy perhaps to give MPs some reflection time over Christmas.
    Today in Cabinet, discussions will be focused on whether the government should ramp up preparation for no-deal Brexit whilst there will also no doubt be debate on the PM’s Brexit strategy, given the various reports that her ministers are openly asking her to test other Brexit options in a series of Commons votes.

    Brexit - which way now?

    Monday 17 December
    The direction of the Brexit process is taking a fresh turn into opaqueness. Theresa May’s favoured strategy is that the UK should continue to negotiate with Brussels over the next few weeks and hold the "meaningful vote" in parliament on 14 January.
    However eight cabinet ministers are demanding that that the Commons takes a series of indicative votes on various ways forward to gauge which options might secure a Commons majority. There have also been further rumblings over a second referendum as a way of breaking the deadlock, and on the other side, a couple of cabinet members apparently favour a "managed" no deal.
    The PM is back in the Commons today at which she is expected to say that a second referendum will cause "irreparable damage to the integrity of our politics".  

    Mixed reception to an inconclusive summit

    Friday 14 December
    Last night Theresa May met with European leaders at the last EU Council meeting of 2018. Reports vary on how warm a reception she received in Brussels, but the summit was inconclusive in terms of any new compromise, although that was as more or less as expected.
    Donald Tusk’s statement following the summit reiterated that the Withdrawal Treaty was not open to renegotiation, a position that has been pushed by European leaders including Angela Merkel ever since PM May decided to postpone the meaningful vote earlier this week. Given that the Withdrawal Treaty, a legal text, has been agreed we believe that there is little chance for any reworking at this stage.
    The same underlying issues remain, in the fact that PM May has an incredibly difficult task in pushing her deal through parliament.
    We suspect that the EU will offer some reassurances over the all contentious backstop. Indeed Mr Tusk tried to push the point that it was intended to be temporary in nature within his official remarks. However we suspect that any side letters, legal codicils or any of the other reported ideas will fall short of a legally binding text, which Tory MPs would want to see.
    In short the same underlying issues remain, in the fact that PM May has an incredibly difficult task in pushing her deal through parliament. In terms of the way forward, there is still no word on when the meaningful vote will take place, although Downing Street have confirmed that it will be in January.
    Ahead of that another EU summit may be required to approve any reassurances the EU may be prepared to give the UK - the next scheduled one is on 21 March, but we suspect that they will be able to schedule an emergency January meeting.  

    May heads to Brussels after surviving vote

    Thursday 13 December
    After last night’s confidence vote, in which May secured victory, but with 117 of her MPs voting against her (200 in favour), she heads to Brussels today for an EU Summit. Her task is to try and get some serious concessions from Brussels on the Irish backstop to try and bring some of those opposing MPs onside and therefore increase the chance of her getting a "meaningful vote" on her Brexit deal through the British Parliament.
    This remains an uphill struggle since Brussels looks to be offering supplements like a "legal codicil", effectively an addition to a legal document, rather than adjustments to the Withdrawal Act; many opposing MPs and the confidence and supply partner the DUP are looking for a legally binding commitment for the UK to be able to exit the Irish backstop unilaterally.
    There is talk that if PM May gets some reasonable concessions from Brussels over the next two days she might try and squeeze in the ‘"meaningful vote" before Christmas. If May is unable to secure sufficient concessions, she will struggle to progress her proposal and in such circumstances Parliament could take greater control of the process, as we have said for some time, which might lead to a ‘softer’ Brexit.
    Tory MPs who backed Theresa May
    Tory MPs who voted against Theresa May
    It also raises the prospect of a 2nd referendum. Overall, the outcome of last night’s vote does not resolve the issue that the PM does not have the support to pass her Brexit proposal in Parliament as it stands.
    She faces a year’s grace now before she could face another formal leadership vote, but with 117 of her own MPs opposing her (and her reported promise to not seek to remain as PM after the next election) she now faces the important task of trying to bring more of her party onside. If she does not, she remains vulnerable.

    Speculation grows over leadership challenge

    Wednesday 12 December
    Speculation over a challenge to Theresa May’s leadership of the Conservative Party has increased further over the past 24 hours. Of course we have heard claims that Tory rebels have amassed the 48 letters necessary for a leadership challenge before.
    But Chief Whip Julian Smith was at no. 10 Downing Street late last night and stories have circulated that 1922 Committee Chairman Sir Graham Brady has asked to see Mrs May after PM questions at lunchtime, though there are conflicting reports about this.
    Somehow though there does seem to be more credence over an imminent challenge. Yesterday the PM spoke to her counterparts in the Netherlands and Germany, the latter after she had been locked in her car before seeing Angela Merkel. The broad picture is that EU27 leaders want to help, but changes to the Withdrawal Agreement (i.e. the legal treaty) are off the cards.
    Alternative solutions have been touted to provide reassurances about the Northern Ireland backstop, such as a ‘legal codicil’, effectively an addition to a legal document. Whether this would be enough to stem the rebellion in the Tory Party or to help amass a parliamentary majority on the meaningful vote on Brexit remains to be seen.   

    PM confirms delay to Parliament's Brexit vote

    Tuesday 11 December
    PM Minister May confirmed in Parliament yesterday afternoon that she would not be pressing ahead with the "meaningful vote" on her Brexit deal at this stage, admitting it would have faced defeat.
    Instead she said she would talk to Brussels and embark on a tour of European capitals to try and find support for some key changes. The big issue is the Irish backstop, where the PM is facing considerable opposition to the current legal text which would leave the UK unable to exit this unilaterally.
    However PM May looks to be facing an uphill struggle here with Brussels seemingly not willing to look at a reopening of the legal Withdrawal Agreement text and more focused on the idea of adding a side declaration which might provide for a show of good faith with regards to the UK’s control over its exit from the backstop and indeed the timing around this, but not give the UK sole legal control.
    Indeed, European Council president Tusk said last night that the EU was “ready to discuss how to facilitate the UK ratification” but warned there could be no renegotiation of the Brexit deal or backstop. There is an EU Summit taking place later this week (13-14 Dec) and this will now be focused on Brexit talks whilst the EU has again indicated it will be ramping up no deal planning.
    The scenes in UK Parliament yesterday were more than chaotic. Moving forward from here it appears that PM May is determined to try and secure concessions with the idea that she would then put a re-worked proposal to the vote.
    There is a good chance that a motion is carried that sees Parliament gain greater control of the Brexit process.
    However, short of May getting a very sizeable concession on the Backstop, she is still likely to find she is short of the support needed to pass the "meaningful vote". As such we continue to judge that there is a good chance that a motion is carried that sees Parliament gain greater control of the Brexit process, perhaps in the New Year, which would likely see a Brexit process progressed that is of a softer nature, quite possible a Norway +++ style model.
    Following the heightened level of chaos displayed yesterday, which saw sterling fall to a low of $1.2509 against the USD and take a big hit against the euro too (it reached 90.875p), there looks to be an increasing chance that a second referendum is called as one route through this process.
    Note that this is not likely to be possible within the current Brexit timescales and would like require delay of the UK’s exit point beyond March 2019 via an Article 50 extension. Finally, Labour leader Jeremy Corbyn is facing increased calls to press for a no confidence motion in the Government whilst there is continued talk of PM May facing a leadership challenge as leader of the Tory party.

    UK economic data released

    Monday 10 December
    Monthly GDP figures for October showed GDP growing by 0.1% mom, in line with consensus expectations but below our +0.2% forecast. Here the weak spot was the manufacturing sector, where output fell by 0.9% mom (-1.0% yoy), defying consensus expectations and our own forecast for a flat mom reading.
    The slump in the manufacturing sector print was “driven by the manufacture of motor vehicles, trailers and semi-trailers, which fell by 6.6%”, partly related to shutdowns. Across the GDP sectors overall the 0.1% monthly rise is an improvement after the flat readings of the prior two months, but a more obvious step up in the growth pace was still lacking amidst the disruption to vehicle production, in particular.
    Slump in the UK's manufacturing sector
    Note though that services output did actually rise by 0.2% mom showing that at least the UK’s dominant sector has moved onto a firmer footing at the start of Q4. Note that the pound was relatively uninterested in these figures, remaining pre-occupied with Brexit news.

    Delay to Brexit vote?

    Friday 7 December
    With PM May facing almost certain defeat on Tuesday’s meaningful vote, the option of delaying it has gained prominence, should no. 10 consider that the margin of defeat is likely to be wide. While the PM’s official line is still that the vote will take place as planned, several ministers are said to be in favour of a postponement.
    Indeed 1922 Committee chairman Sir Graham Brady remarked yesterday that there was no point in ‘ploughing ahead and losing the vote heavily’. The alternative scenario would be to go back to Brussels in an attempt to squeeze concessions from the EU, which holds a Summit on Thursday and Friday, most notably in the direction of the Northern Ireland backstop. 

    May advised to delay Commons vote on Brexit

    Thursday 6 December
    A few developments have surfaced over the past 24 hours, but none provides huge clarity. According to news reports, Mrs May is being advised to delay next Tuesday’s "meaningful vote" if it looks as though she is heading for a defeat of 100 or more.
    Presumably the PM would then ask the EU for changes to the political declaration on the future UK/EU relationship (an EU Summit is set for 13-14 December). Of course a vote in the Commons would still need to take place at some stage, but on this scenario, it could still be squeezed in ahead of the Christmas recess.
    Meanwhile there has been more talk of a cross-party (i.e. Conservative/Labour) move to present a motion calling for close ties with the EU, such as the so-called ‘Norway plus’ (EEA membership plus a customs union). Ironically this may to help to coalesce Tory right wing MPs behind the PM in next week’s vote.
    If it still goes ahead as planned on Tuesday, and the PM loses badly, the indications are that Labour may aim to hold a vote of no confidence in the government. However the DUP has indicated that it will continue to support the Conservatives in votes of confidence. Sterling looks soggy this morning, trading at $1.2710 vs the USD an 89.1p vs the EUR.  

    May suffers trio of embarrasing defeats

    Wednesday 5 December
    PM May suffered an embarrassing three defeats in the House of Commons yesterday, the first time a government has lost three votes in the same day since 1978. The first two defeats came over the publication of the government’s legal advice over Brexit.
    The government had initially attempted to delay proceedings by sending the contempt of Parliament  charge to the Privileges Committee, but the government was defeated by a vote of 311 to 307. The government was then found in contempt of Parliament for not publishing the full legal advice as demanded; the vote stood at 321-299, which now means that David Lidington or Geoffrey Cox or possibly both are suspended.
    The DUP voted against the government on both counts. The third defeat came on an amendment put forward by Tory MP Dominic Grieve, which the government lost by 321-299 as Tory rebels voted against the government. In the event that the government loses the meaningful vote next week, as is expected, the government is required to return to Parliament within 21 days, laying out what it intends to do.
    The Grieve amendment would ensure that any motion brought forward by the government on what it plans to do next in such circumstances is amendable, rather than in neutral terms. Does this dramatically alter the governments hand, we suspect not, instead we would suggest that it formalises the process of what we thought might happen in that following the vote next week, where PM May is highly likely to lose, we suspect that quick negotiations would resume with Brussels to make very marginal tweaks on the Brexit deal before returning to Parliament again for a second vote.
    At the margin last night’s defeat makes the chances of a second referendum slightly greater although we still suspect this is unlikely, whilst at the same time the chances of a ‘no deal’ are slightly lower.

    The Brexit week ahead

    Monday 3 December
    The week looks to be yet another critical one for PM May, with the House of Commons set to begin its formal debate ahead of the ‘meaningful vote’ on the Brexit deal next week (11 December). Ahead of this the parliamentary arithmetic has turned more unfavourably against May.
    For one, we saw the pro-remain universities minister Sam Gyimah quit the government. Today the Attorney-General Geoffrey Cox will face a Q&A in Parliament and he is expected to face continued pressure to publish his full legal advice to the government on Brexit, something which PM May has been keen to avoid.
    There are continued questions over the DUP’s confidence and supply agreement with the government.
    On the DUP front, there are also continued questions over the DUP’s confidence and supply agreement with the government; reports from party sources at the weekend suggested the DUP might oppose the government in a confidence vote. Talk of a confidence vote against the government, should the first "meaningful vote" yield a "no", has also risen up the agenda over the weekend with Labour pushing this more forcefully.
    Today in Parliament, in addition to Geoffrey Cox’s appearance, PM May will give a statement following the G20 Summit and the new Brexit secretary, Stephen Barclay, will makes his first appearance before the Commons Brexit committee at 1.30 pm alongside chief Europe adviser Olly Robbins. Questions for Barclay will likely focus on the state of Britain’s no-deal preparations.

  • November 2018

    Trouble at home for May

    Tuesday 27 November
    Theresa May encountered a significant amount of opposition in the House of Commons yesterday after she delivered a statement detailing the agreement that the UK had reached with the EU. She has subsequently come under further pressure after Conservative MP Andrew Lewer announced that he had lodged a letter of no confidence in Mrs May, the 27th Tory MP to have done so publicly.
    Just as it looked as though things could not get any worse, the majority of the front pages of today’s papers are emblazoned with criticism of the deal by President Donald Trump. He is quoted as having said that the deal looks “good for the EU” and as having questioned whether a UK/US trade deal would be possible.
    The widespread opposition to the deal demonstrates the uphill struggle that the Prime Minister faces ahead of the ‘meaningful vote’ by MPs, the date of which has now been confirmed to be the 11 December after five scheduled days of debate. In an effort to win over the public, the Prime Minister has kicked off a nationwide tour of the UK this morning with her first port of call being Powys in Wales.

    Brexit impact analysis

    Wednesday 28 November
    HM Government has published its assessment of the long-term economic impacts of various scenarios for the UK’s future relationship with the EU.
    These include:
    1. The July 2018 White Paper (Chequers)

    2. A hypothetical FTA with zero tariffs and reflecting average FTA non-tariff costs

    3. An EEA-type scenario (which reflects being outside of the Customs Union and as such primarily reflects the costs of standard customs arrangements with the EU); and,

    4. A no-deal scenario based on an assessment of average non-tariff barriers (NTBs) between countries trading on non-preferential World Trade Organization (WTO) terms and applying EU applied Most Favoured Nation (MFN) tariffs.
    The scenarios are then considered in two ways. The modelled White Paper and average FTA scenarios are compared against the no-deal scenario whilst all of the scenarios are also compared against today's arrangements.
    The analytical approach is based on an assessment of the trade costs likely to prevail under each scenario on a tariff and non-tariff basis. This is then run through a macroeconomic model to gauge the likely impact (and range) around this for the economy.
    The approach results in an estimate in which the level of GDP under the Chequers scenario would be 6.9% higher after 15-years than in a “no-deal” scenario, or some 5.4% higher assuming a higher level of assumed non-tariff barriers. Given the likely differences in tariff levels that would apply between these two scenarios, this result does not appear unreasonable to us.
    The modelled FTA scenario is estimated to leave GDP 2.7% higher after 15% years than in the no-deal scenario. Compared against the status quo, i.e. remaining in the EU, GDP is lower in all alternative states of the world assessed.  Under the Chequers White Paper, GDP is 0.7% lower, whilst under a modelled average FTA, GDP is 4.9% down.
    These poorer outcomes again result from the higher average tariff and non-tariff barriers which would likely prevail under such scenarios. Note that we will get the Bank of England’s analysis of the impact of PM May’s deal compared against a no-deal scenario later today; we would expect to see a broadly similar results, give or take some differences in the assumptions underpinning the analysis.
    Of course, it remains to be seen whether the estimated economic impacts of the Brexit scenarios will sway Parliament over the course of the debate (and votes) set to follow over the next couple of weeks. 

    Trouble at home for May

    Tuesday 27 November
    Theresa May encountered a significant amount of opposition in the House of Commons yesterday after she delivered a statement detailing the agreement that the UK had reached with the EU. She has subsequently come under further pressure after Conservative MP Andrew Lewer announced that he had lodged a letter of no confidence in Mrs May, the 27th Tory MP to have done so publicly.
    Just as it looked as though things could not get any worse, the majority of the front pages of today’s papers are emblazoned with criticism of the deal by President Donald Trump. He is quoted as having said that the deal looks “good for the EU” and as having questioned whether a UK/US trade deal would be possible.
    The widespread opposition to the deal demonstrates the uphill struggle that the Prime Minister faces ahead of the ‘meaningful vote’ by MPs, the date of which has now been confirmed to be the 11 December after five scheduled days of debate. In an effort to win over the public, the Prime Minister has kicked off a nationwide tour of the UK this morning with her first port of call being Powys in Wales.

    EU approves Brexit deal

    Monday 26 November
    Sunday’s EU Summit signed off on the agreed deal in somewhere close to half an hour. Faced with considerable opposition in the Commons, Theresa May began a roadshow trying to sell the deal to the public with an 800 word letter in its defence.
    While the EU insists that there is ‘no Plan B’, there are a number of stories circulating about various courses of action, such as second votes, should the government lose its ‘meaningful vote’ in Westminster, still expected around 12 December.
    Theresa May is expected to give a statement to the Commons today at around 15.00. Sterling is little changed from Friday afternoon and is currently trading $1.2825 and 88.5p against the euro.

    Final political declaration agreed

    Thursday 22 November
    Latest EU/UK political declaration. The final political declaration runs to 26 pages instead of 7 (last week’s draft), although a fair proportion of it is concerned with issues such as Security and Institutional arrangements. 
    In terms of areas related to the economy, we would make the following points:
    1. A free trade zone in goods between the UK and EU is envisaged; 

    2. On customs the declaration says that both parties will put in place ‘ambitious customs arrangements’. This hints (without committing to) the Chequers plan idea of a partnership to negate the need for UK/EU customs checks, including on the island of Ireland.

      There is a specific mention here of using all available technologies, which could be read as a ‘sop’ to Brexiteers whose preferred solution to the NI/RoI border issue was to use technology to track goods across Ireland (maximum facilitation); 

    3. For financial services, each party should assess each other’s frameworks to judge whether they are equivalent, ideally by the end of June 2020, to facilitate market access; 

    4. On fishing, a new fisheries agreement should be ratified by 1 July 2020. But there is not much granularity in the document, especially compared with the 585 page Withdrawal Agreement (WA). 
    Indeed in certain areas there are some very short generalisations. For example, the UK and the EU have been at odds on space and the Galileo project. Here the declaration simply says, ‘The Parties should consider appropriate arrangements for cooperation in space’.
    In other words specific negotiations on various aspects of the future relationship have yet to take place. We would also note that this document is not a legal treaty (in contrast with the Withdrawal Agreement) and is not enforceable, save that the WA insists that negotiations have to be conducted in good faith. 

    'Very good progress' made on political declaration

    Thursday 22 November
    Last night Prime Minister Theresa May met with European Commission President Jean-Claude Juncker in Brussels. After two hours of talks, the UK and the EU made “very good progress” towards narrowing differences on the proposed political declaration on the future trading relationship.
    Still there remain a number of significant outstanding issues. Among these are the UK’s demand that a reference to attempt to retain “frictionless” trade after Brexit be included, a suggestion that has been dismissed by France and Germany who argue that the UK cannot enjoy all the benefits of the single market without adhering to all its obligations.
    A number of EU states that border the North Sea also want to make retaining fishing access to British coastal waters a precondition to a broad trade agreement across all sectors, in opposition to the UK’s plan to gain independence in setting fishing policy. Meanwhile, negotiators from both sides have insisted that the draft withdrawal agreement cannot be reopened.
    One notable exception to this is Spain who is threatening to “veto” a deal unless it is accompanied by a separate text specifying that Gibraltar will be excluded from any future trade agreement. In contrast, the UK is proposing to add language to the political declaration that would explicitly include the disputed territory in the future trade agreement.
    Overall, while the substance of the remaining differences means that Sunday’s Summit is not certain to go ahead, the positive language from last night’s meeting suggests that the EU is now at a stage where it can begin consulting member states on the current state of the political declaration.
    Top officials from the European Commission are due to meet this morning to take stock of progress. Mrs May and Mr Juncker will also meet again on Saturday in an effort to conclude these and to discuss how they “can bring to a conclusion this process” that is in the interests of both sides.

    May heads off to Brussels

    Wednesday 21 November
    Developments on Brexit have been relatively quiet over the last 24 hours, but there are a couple of points worth noting. Firstly, PM May is off to Brussels today and is meeting Jean Claude Juncker this afternoon (reportedly at 16:30), where they are set to hold discussions before this Sunday’s EU Summit.  
    Ahead of the Summit Spain has been voicing concerns over the issue of Gibraltar and has threatened to vote against the draft Withdrawal Treaty unless its concerns are addressed. Reports several weeks ago had suggested that a deal had been reached over Gibraltar.
    However Spanish PM Pedro Sanchez has faced domestic criticism for being too soft on the issue, which is likely to have led to Spain’s recent objection. However we would expect these differences over Gibraltar to be overcome. Secondly,  there is still no word on when the full political declaration will be published, with there seemingly being some wrangling over its length.  
    Lastly, Tory rebel momentum in trying to oust PM May is waning further, with Jacob Rees Mogg yesterday conceding that efforts to reach the required 48 letters to force a confidence vote had stalled. 

    Change of publication date for BoE stress tests

    Tuesday 20 November
    It has been announced this morning that the Bank of England will bring forward publication of bank stress tests to Nov 28 from Dec 5. The reason given is that the BoE’s Brexit analysis (of the economic impact of the deal and an alternative ‘no deal’) will draw on material from both the Financial Stability Report (FSR) and the market sensitive stress test results.
    Given that it will be sent to the Treasury Select Committee on 29 November it will be necessary to bring the publication date of the FSR and stress test results forward. The specific timings are that the Financial Stability Report and stress test results will be published at 7am on 28 November and the Record of the FPC’s Meeting will be published at 9.30 on 5 December now.

    Expanded political declaration delayed

    Tuesday 20 November
    Heading into this week, the original plan was for the EU to publish an expanded version of the seven-page draft political declaration of its future relationship with the UK today (Tuesday). It now appears that this will not be published until later in the week, with the FT reporting that France and Spain are pushing for the inclusion of so called side-declarations.
    These are a commonly used mechanism by the EU in fraught negotiations which serve to clarify the bloc’s interpretation of a deal. This has been met with pushback from Michel Barnier, the EU’s chief negotiator, who fears that this would risk giving British eurosceptic MPs a reason to renegotiate the draft Withdrawal Agreement.
    Causing another headache for Mrs May was the decision by the Democratic Unionist Party (DUP) to abstain on three parts of the Finance Bill last night and vote with the Labour Party on a fourth. While this would appear to be an overt breach of the confidence and supply pact reached with the Conservative Party in June 2017, the DUP argued that the move has not breached the arrangement because the amendments were cost-neutral.
    In any case, it is clearly intended to signal that its support in the eventual “meaningful vote” on the final Brexit deal is not assured. Note also that the DUP is back to its full strength of 10 MPs from today now that the 30-day suspension of MP Ian Paisley Jr has ended.

    Calm after the storm

    Monday 19 November
    Events over the weekend were relatively low key, but perhaps this was always likely, given the chaotic events last week. Ahead of the EU Summit on Sunday, Theresa May plans to fly to Brussels this week to take charge of the Brexit negotiations herself and speak with EU Commission President Jean-Claude Juncker.
    At some stage this week, the EU is expected to publish a fuller version of the draft political declaration of the future relationship with the UK, a seven page version of which was released last Tuesday. This compares with the 585 page Withdrawal Agreement, which technically is also in draft form.
    However it seems unlikely that at this stage, the EU will allow any major alterations to the treaty; reports are that EU chief negotiator Barnier is focused on the remaining ‘xxx’ in the text, with the offer of an extension of the transition out to 2022. At home the PM continues to face talk of a challenge to her leadership.
    As we write, two more MPs had submitted letters publicly to Sir Graham Brady, the Chair of the 1922 Committee, taking the number to 25. This is 23 short of the number required to force a vote of confidence in Mrs May’s leadership of the party.
    It has also been claimed that a number of secret letters have also been lodged, although at the weekend Sir Graham was tight lipped over the number that he had received. He did mention however that Mrs May was likely to survive such a vote, should it take place.

    Political mayhem

    Friday 16 November
    Following yesterday’s political mayhem, overnight news has been relatively quiet. Theresa May remained defiant last night as she delivered a press conference defending the current deal and vowed to fight on. Note that she is set to speak again this morning at 8am on LBC radio.
    However the situation in government is likely to remain very uncertain, with question marks remaining over the possibility of further resignations and whether the number of letters held by Sir Graham Brady is nearing the 48 needed for a leadership challenge.
    On resignations, there were seven government members in total yesterday, including two Cabinet ministers. There remains a big question mark over Michael Gove, who has reportedly rejected the Brexit Minister role unless he is permitted to renegotiate the Withdrawal Treaty.
    With regard to letters of no confidence in May’s leadership, we know that 17 have been submitted given public announcements, but it remains to be seen how close we are to the 48 necessary to force a vote of confidence. But given previous rumours it would seem close and speculation remains as to whether more will be submitted over the weekend.
    As things currently stand, PM May will now push on with the draft Withdrawal Treaty and seek EU27 approval at the summit next Sunday (25 November), although with the very fluid situation in Westminster, we suspect that there will still be twists and turns to come. UK markets have been relatively steady overnight, with sterling gaining against the USD, rising to $1.2796.

    Brexit secretary Dominic Raab resigns

    Thursday 15 November
    UK Brexit Secretary Dominic Raab has resigned, after yesterday’s Cabinet debate on the draft Brexit agreement. His comment is that the backstop arrangement is the starting point for talks on future ties, which he says severely prejudices the second phase of negotiations.
    PM May is set to give a statement to Parliament on the draft Brexit agreement at 10.30am to try and get some momentum in Parliament behind the deal; this is now looking like even more of an uphill struggle.
    Of course, more questions follow too about the prospects of May’s personal survival as PM amidst a report from ITV’s Robert Peston that Conservative lawmakers have now lodged the 48 letter of no confidence required to trigger a leadership challenge.

    The draft agreement

    Thursday 15 November
    After a marathon Cabinet session on the draft technical Brexit agreement with Brussels, Prime Minister May emerged on the steps of Downing Street to say that collectively the Cabinet had agreed to back the proposal. However this had clearly been a very difficult meeting with a significant number of the Cabinet objecting.
    We have just seen the resignation of junior Northern Ireland minister Shailesh Vara. We now wait to hear if any Cabinet level minister resignations follow, with Brexiteer Ester McVey, Secretary of State for Work and Pensions, said to have been the most disgruntled.
    The 585-page draft withdrawal agreement was published after the Cabinet, laying bare why the Brexiter-leaning ministers are disgruntled with the proposal. Firstly, after the UK’s exit from the EU on 29 March, the proposal places the UK into a transition in which it effectively operates as if it is an EU member state.
    The proposal places the UK into a transition in which it effectively operates as if it is an EU member state.
    This transition provisionally runs until end-2020, though with the possibility that this could be extended for an unspecified period (as a way to avoid the Northern Ireland backstop coming into force); any extension would be by joint agreement.
    The backstop puts the whole of the UK into a customs territory, but with Northern Ireland retaining the rules of the single market too to avoid the need for a hard  border on the island of Ireland. The DUP is particularly displeased with the proposal, with Northern Ireland effectively facing a regulatory/rules border down the Irish sea.
    This idea of a UK wide customs union backstop is also particularly unwelcome amongst the Brexiters, particularly given that the UK has not secured an agreement that it can unilaterally chose to exit to a new permanent end state. 
    On future arrangements, there is currently only a seven page proposal ready at this stage; the full political declaration is still to be put together. The real, legal negotiations, on this will not start until after the UK exits the EU next March while work on the political declaration with the European Parliament will begin today, according the EU’s chief negotiator Michel Barnier.
    The opposition to the proposal in Cabinet yesterday lays bare the uphill struggle May will face getting Parliament to back her in a “meaningful vote” on the proposed deal. This is particularly so given that May’s DUP confidence and supply partners are displeased and may well therefore not back the vote, unless further concessions can be gained in the coming days.
    The EU has confirmed sufficient progress has been made for a Summit to go ahead; this is set for 25 November, though there is clearly more work to be done. On the domestic political front, May is giving a statement to Parliament this morning; expected at 10.30am.
    Sources are citing the 18 December as a date for a Parliamentary vote, perhaps with the idea of PM May bouncing MPs into accepting her proposal.
    This will further clarify the mood of Parliament on this will no doubt serve to highlight the uphill struggle May will face in passing the proposal as it stands. This will also serve to highlight the thin detail on future trading arrangements proposed for the permanent end state.
    Sources are citing the 18 December as a date for a Parliamentary vote, perhaps with the idea of PM May bouncing MPs into accepting her proposal, faced with a ‘no deal’ alternative and very little time for a re-work.
    As noted previously, if May fails to get Parliament behind her, one route forward could be a cross party motion, instructing the government to return to negotiations with Brussels. This could lead towards the UK seeking a closer relationship with the EU than Mrs May’s proposals.

    Technical talks with Brussels

    Wednesday 14 November
    Downing Street confirmed last night that technical talks with Brussels has settled on a draft Brexit agreement. Cabinet is set to meet at 2pm today to discuss the shape of the agreement, which has not yet been published. PM May met with a number of Cabinet ministers last night for some arm twisting to try and ensure Cabinet would back the deal at today’s meeting.
    Assuming Cabinet does get behind the deal, it seems likely that that the text would be released shortly. Comments so far from the DUP, based only on reports on the shape of the deal, suggest the deal would not be seen favourably by them, though no doubt we will hear more once the package has
    been released.
    The DUP is said to be unhappy that while a hard border on the island of Ireland or down the Irish Sea is avoided, the UK has been hit with other regulatory requirements set by Brussels. Assuming PM May does not face a sizeable rebellion, it seems likely that the deal will then go for consideration at an EU Summit on 25 November, with any final adjustments made in the time between now and then.
    We remain of the view that the biggest challenge of all will be getting the ‘meaningful vote’ on the Brexit deal passed through Parliament. As noted yesterday, if May fails to get Parliament behind her, one route forward could be a cross party motion, instructing the government to return to negotiations with Brussels. This could lead towards the UK seeking a closer relationship with the EU than Mrs May’s proposals.

    Theresa May's Brexit speech

    Tuesday 13 November
    PM Theresa May gave a speech at the Guildhall last night  in which she said Brexit talks were “in the endgame” and that the issues being addressed were “extremely difficult”, as is often the case with the final stretch of negotiations.
    As widely reported, she reiterated the intensity of talks that were underway, with Downing Street highlighting the Irish border as being the biggest remaining issue. Earlier yesterday the chief EU Brexit negotiator Michel Barnier reportedly said that the main elements of an exit treaty text are ready to present to the UK cabinet on Tuesday, with that comment rebuked by PM May for forcing the pace of divorce deal talks and attempting to ‘bounce’ the UK into accepting Brussels’ latest proposal.
    PM May clearly cannot be viewed as being corralled into accepting Brussels’ proposals for the exit mechanism from the temporary customs union arrangement. Cabinet convenes for its regularly scheduled meeting today and whilst Brexit will be discussed, it seems unlikely that this will be a final ‘sign-off’ meeting with another round of push back to Brussels likely.
    Indeed, May is trying to wed her Cabinet together behind what needs to look like a UK-led backdrop exit mechanism. Of course, beyond that PM May also needs reach an agreement with Brussels which has at least a decent chance of passing Parliament, with the prospect of ‘no deal’ offered as an alternative.
    Developments in Cabinet today and any UK response to Brussels will give us a clearer idea of whether the parts can move into place for a last minute November Summit to be scheduled for sign-off of any package in the European Council.

    Brexit's (lack of) progress

    Monday 12 November
    Reports of negotiations from Brussels suggest a lack of agreement between the EU and the UK. The main issue seems to be (still) Northern Ireland and specifically who can adjudge that the UK can leave the Temporary Customs Union, which has been proposed to avoid a hard border with the Republic.
    Lack of an accord before the end of the week would appear to end prospects of a special Summit towards the end of the month to agree an overall deal. Things have not been going well at home either. Following junior Transport Minister Jo Johnson’s resignation on Friday, several other pro-EU ministers are alleged to have threatened to resign.
    Similar threats remain in place from hardline Brexiteers. Hence not only does it look as if an accord between the UK and the EU is unlikely this month, Theresa May’s battle to pass a deal through parliament when a deal is struck, looks as tough a challenge as ever.
    Given this background, it is not surprising that sterling is weaker this morning. The pound is currently trading at $1.2875 and 87.6p.

    Latest developments

    Thursday 8 November
    UK Cabinet members were allowed to read the latest draft of the withdrawal treaty yesterday, which is reportedly now 95% complete. Of course, the main sticking point remains the text on the backstop on the NI/RoI border.
    Chief EU negotiator Michel Barnier warned that there is ‘more work to do’. Even so, there are reports that negotiators are meeting at the weekend, which could pave the way for UK and EU27 ministers to assess it early next week.
    If all goes well, and course it is an ‘if’, a special EU Summit could be arranged towards the end of the month. The process of legislation though Westminster would take place in December. 

    Brexit media grid leak

    Wednesday 7 November
    The FT reports this morning that Prime Minister Theresa May instructed her Cabinet yesterday to make a push to secure a Brexit deal this week, with ministers told to expect to meet again on Friday or Saturday in order to approve the outline of the deal.
    Separately, the BBC has reportedly obtained the Government’s media grid for Brexit this autumn. It claims that Brexit secretary Dominic Raab will announce a “moment of decisive progress” in negotiations on Thursday, which will then be followed by 10 days of “Sherpa” meetings with the remaining 27 EU states.
    The Prime Minister will then reportedly say in her keynote speech at the CBI’s annual conference on 19 November that “we [the Government] have delivered on the referendum” and that the country should unite behind it for the good of all our futures.
    Later that day, the Withdrawal Agreement and the framework for the future trading relationship will be presented to MPs by way of a ministerial statement by Mr Raab. Seven theme days on the deal will then follow starting on 21 November with ministers speaking in the media on topics that include the economy, immigration and striking trade deals with the rest of the world.
    Crucially, on the 27 November (i.e. final theme day) the “meaningful vote” on the deal will, according to these reports, be put to Parliament with the government message to MPs reported to be that they should put the country before their own interests by backing the deal.
    However, the media grid looks to be somewhat out of date, given that it expected Cabinet to approve a deal yesterday. As such, some of the near-term dates (such as the Thursday statement by Mr Raab) are likely to have been pushed back. Still, if the media grid is the genuine article, it suggests that the government is optimistic that it will strike a Brexit deal that is palatable to the Commons by the end of the month.

    UK Cabinet meeting today

    Thursday 1 November
    According to newspaper reports, the PM is urging her Cabinet to back her stance on Brexit, warning that failure to conclude a deal this month would mean businesses having to begin to implement plans for a no deal Brexit.
    Over the weekend, Brexit Secretary Dominic Raab threw a curveball into the process, saying that the UK should be able to walk away from a temporary customs arrangement (TCA) with three or six months’ notice, to prevent Britain form being locked into a permanent customs union. 
    (A TCA has been suggested to enable the NI/RoI border to remain open ahead of a final trade deal and/or technological solutions being ready).
    Yesterday the Irish PM Leo Varadkar suggested that the TCA could be subject to a joint review, with the EU also having a say in the arrangements. Overall though the current direction of travel is still that both sides are hopeful that enough progress in talks can be made this week to schedule a special Summit to endorse a formal agreement. Such a gathering, were it to take place, would now be arranged at some point between 22 and 24 November. 

    Secret deal takes shape?

    Monday 5 November
    Various articles in the Sunday Times suggest that Brexit negotiations have progressed further than publicly disclosed. These include the NI backstop, where the arrangement is said to involve the UK remaining in a customs union with the EU.
    Furthermore the EU is said to have agreed that regulatory inspections on goods travelling between NI and GB can take place at the ‘marketplace’ rather than at the port. Meanwhile a ‘Future Economic Partnership’ will balance market access and checks at EU borders. The latter will be outlined by a political declaration, but this will set the arrangements out in some detail and is expected to run to about 50 pages.
    Westminster’s game plan now appears to be to make sufficient progress in negotiations this week so that the two sides agree to hold an emergency Summit, perhaps on the 15 or 22 November. Meanwhile Brexit Secretary Dominic Raab has insisted that the UK has the right to withdraw from the backstop plan with 3-6 months’ notice.
    It is not clear whether Mr Raab is playing to the gallery of eurosceptic MPs, or whether this is prove to be a red line in negotiations. Further reports suggest that the PM will pitch the plan to the Cabinet tomorrow.   

    Brexit deal on financial services close?

    Thursday 1 November
    Media reports suggest that the UK government is close to striking a deal on financial services with the EU. The Times suggests that British financial services firms will be granted ‘equivalent’ status to deal with EU entities by Brussels, enabling them to operate much as they do currently.
    In addition it has been suggested that the EU will not be able to suspend ‘equivalence’ with a month’s notice as it can at present, but would have to take any planned withdrawal of market access to an arbitration mechanism. Reports also suggest that there is progress on other areas of negotiations.
    A source has suggested that the parties were not far from a wider agreement and there are still hopes that a special Summit (still to be scheduled) on 17/18 November could push a broad deal through. Sterling has risen sharply on this news and is currently trading at $1.2870 and 88.2p against the euro. 

  • October 2018

    Thursday 25 October

    PM Theresa May survives 1922 Committee meeting. The PM addressed a meeting of the Conservative 1922 Committee of backbench MPs yesterday in an exercise that had been billed as a potentially hostile encounter. The reality was different, with reports stating the PM won over the great majority of MPs with an impassioned performance and that she had received a warm reception.
    Various stories suggest that rebels have not yet lodged the 48 letters necessary with 1922 Chairman Sir Graham Brady, to trigger a party leadership challenge. That said, there does not seem to have been material progress on Brexit negotiations. Indeed reports suggest that the government will begin full-scale legislative preparations for a no-deal Brexit in three weeks’ time.

    Wednesday 24 October

    The Times reports that Cabinet ministers have been presented with the proposal that the UK remains in the transition period for an indefinite number of years, rather than its current planned end date of 31 December 2020.
    This would be achieved using an “annual decision point” which would essentially give the UK government the binary option of either extending the transition period or reverting to the backstop if the future trading partnership with the EU is not ready.
    This comes at a critical point for the Prime Minister amid rumours that the number of letters received by 1922 Committee chair, Sir Graham Brady, calling for a vote of confidence was reaching the critical number of 48 (i.e. 15% of Tory MPs). In an effort to quell the rank-and-file of her party, the Prime Minister will attend today’s 1922 Committee.
    While it isn’t clear at this stage what atmosphere she will be met with, numerous outlets report that the Prime Minister faced opposition at yesterday’s Cabinet meeting to her proposal that the Irish backstop entails the whole of the UK remaining in the EU customs union without a guaranteed end date.
    Ministers said to have been in opposition include ‘moderates’ such as Jeremy Hunt, Liz Truss and Sajid Javid. Attorney General Geoffrey Cox even reportedly likened it to being stuck in Dante’s first circle of hell.
    Ahead of this, Theresa May is set to go in front of the Commons at midday for the weekly Prime Minister’s Questions (PMQs), which should serve as a litmus test for what reception she can expect this evening.

    Tuesday 23 October

    Brexit/UK political update: PM Theresa May delivered a statement to the House of Commons yesterday afternoon on Brexit. In it she outlined her plan to advance talks with Brussels, whilst also trying to appease ever growing concerns within factions of the Tory party and across Parliament
    over her Brexit game plan.
    Specifically Mrs May reassured Parliament that she would not accept Northern Ireland being treated as a separate customs territory from the rest of the UK. Indeed, her plan included a proposed backstop based on “a commitment to a temporary UK-EU joint customs territory”.
    She also kept in play the option of an extension to the transition period, if a final free trade deal was not agreed by that point, but she did not put a length on any extension.
    Broadly, the PM’s parliamentary appearance does look to have settled tensions a little with Mrs May’s week also made easier by the former Brexit Minister Steve Baker pulling an earlier proposed amendment to Northern Ireland legislation (in Parliament Wednesday) which would have made the EU’s version of the Northern Ireland/Republic of Ireland backstop effectively illegal. Today, we have a meeting of Cabinet to discuss the Brexit negotiations.
    As for the mooted Wednesday meeting of the backbench 1922 Committee (the Chair of Committee that would be responsible for calling a confidence vote on the PM), Mrs May has said she has not currently received an invitation. Cable is at $1.2950 currently, having taking a lurch lower this morning amidst a broader dollar move.

    Monday 22 October

    Numerous reports over the weekend suggest Theresa May is set to face a significant amount of pressure from her party this week over her Brexit plans. The Sunday Times reports that up to 40 Conservative MPs could be set to rebel against her by backing amendments to Northern Ireland legislation on Wednesday.
    These are being put forward by Former Brexit Minister Steve Baker, which if passed would effectively kill any backstop that retained any elements of the EU’s original proposal. Meanwhile, the Daily Telegraph reports that the Prime Minister held an "an extraordinary" hour-and-a-half long conference call with Cabinet ministers in an effort to shore up support for her Brexit plans.
    However Esther McVey, Sajid Javid and Geoffrey Cox are all understood to have raised significant concerns about aspects of her negotiating strategy. In an effort to push back against this pressure, the Prime Minister has penned an editorial in The Sun today in which she writes that Brexit is “not about me or my personal fortunes. They’re about the national interest”.
    She is also set to address the Commons today at 3:30pm to give an update on Brexit negotiations, which should serve as a good litmus test for the meeting of the Tory backbenchers 1922 Committee meeting on Wednesday. Some MPs have called for her to attend the meeting, but a formal invitation has yet to be extended to her.

    Thursday 18 October

    Last night Theresa May delivered a short update on the UK’s views on Brexit to an EU27 working dinner. Here the overall tone between PM May and the EU’s Leaders was more positive than at the Salzburg summit a month ago.
    Despite the more constructive air in the PM’s address there was little in terms of new proposals from the PM, the only point of note being the fact that the PM stated that she was ready to consider an extension of the transition period, opening up the possibility of this lasting until the end of 2021.
    Over the working dinner (which PM May did not attend) the EU judged that there had been insufficient progress on the withdrawal treaty and the backstop for the EU to sanction an extraordinary summit in November, Michel Barnier himself stating that more time was needed than just a few weeks to break the deadlock.
    Given the EU decision over a November summit, the timeframe for agreeing a deal now looks to be heading towards the EU Council summit on the 13 December, although we would note that there is the possibility that the timetable slips further and that a final agreement is not reached until January. Sterling is weaker this morning with GBP:USD trading at $1.3081, although this partly reflects a firmer USD generally.

    Wednesday 17 October

    The EU Summit begins today when UK PM Theresa May speaks ahead of a dinner attended by EU27 leaders. There seems no progress on a backstop on Ireland.
    Indeed some stories suggest that Westminster is dragging its heels on its own proposals until after the Budget on 29 October, in order to ensure that the DUP votes for the Finance Bill, expected to be presented on 1 November.
    One idea that has been floated is to extend the length of the transition period beyond December 2020, perhaps by a year. Nonetheless this would confer few tangible benefits to the process (note that the UK has already floated the idea of a temporary period in a customs union after 2020) and a firm backstop on RoI/NI would still be required.
    While no-one expects a breakthrough to be reached this time around, markets will watch carefully to see if the EU feels sufficiently positive about prospects for a deal to schedule an emergency Summit during the weekend of 17/18 November.

    Tuesday 16 October

    Theresa May delivered a statement to Parliament yesterday on the state of the Brexit negotiations. She appeared to be playing for time and a bit of patience from her Commons colleagues, saying that she did not believe the “EU and UK are far apart” and saying that she continued to believe a “deal is achievable”. 
    In a heated session, Mrs May outlined the sticking points on talks. Here the PM explained that Britain wanted a “temporary” UK wide customs union with the EU, but that Brussels was objecting to this on the grounds that there was not the time to work out the detail. 
    The temporary customs union is sought as a means to avoid a hard border between the Republic of Ireland and Northern Ireland until the UK can move into its new permanent end state. However Mrs May also noted that Brussels was requiring a “backstop to the backstop” such this could be applied if the future arrangements were not ready when the temporary customs union expired.
    May stated that the UK must reserve the right to pull out of the customs union if the EU were not to cooperate on future relationship arrangement.
    The UK and EU are seemingly continuing to spar over the shape the backstop to the backstop will take, with PM May continuing to push for a solution that avoids a border down the Irish sea (to appease her DUP colleagues).
    Mrs May also stated that the UK must reserve the right to pull out of the customs union if the EU were not to cooperate on future relationship arrangement, which it appears Brussels is unhappy about. At this stage, given the breadth of issues on the divorce agreement still to be resolved, it looks as if we are unlikely to see clear steps forward at this week’s EU Summit, which starts with a dinner on Wednesday evening.
    This is not a particular surprise, given that make or break EU negotiations on almost anything typically head to the 11th hour of talks. A key issue is whether the EU will refuse to schedule a November Summit date to progress talks at this week’s meeting, until it sees further progress.
    There has been a notable absence of any discussion on future trading arrangements.
    There are reports that the Summit will announce a November Summit, but earmark it for no-deal planning. The pound is holding its ground ahead of the Summit so far, with cable at $1.3150. But we again flag the prospect of further painful negotiations before clear steps forward are made. Note also that there has been a notable absence of any discussion on future trading arrangements.
    We heard yesterday from a number of Labour MP’s that they would not back a “blind Brexit” if it comes to a vote on just the divorce agreement, but with no steer on future arrangements, in Parliament.

    Friday 12 October

    The PM’s "war cabinet" met yesterday with a number of stories (officially denied) suggesting that the UK and the EU are close to a deal. Brexiteers are concerned that the backstop on Northern Ireland includes an open ended commitment for the whole of the UK to remain in a customs union with the EU until a longer-term, workable solution is available.
    It is still believed that the agreement on the future relationship with the EU will be settled by a loosely worded political declaration where the specifics of the arrangements will be settled after 29 March i.e. there will be a certain degree of can kicking.
    However no-one knows for sure, as the EU side of the negotiations is currently in ‘tunnel’ mode where officials are effectively in lockdown ahead of a sherpas (i.e. lower level) meeting early next week and the EU Summit itself which starts on Wednesday evening.
    Sterling is little moved overnight at $1.3225 and 87.6p against the euro.

    Thursday 11 October

    There were two main parts to yesterday’s Brexit/UK political news. The first was that the DUP, seemingly unhappy with the latest proposals on the Northern Ireland/Republic of Ireland border issue, threatened to vote down the UK Finance Bill, will would typically be viewed as a vote of no confidence in the government.
    No.10 however has sought to downplay this, saying that it would not see a defeat on its Finance Bill in such a light. Meanwhile, it is being reported that Downing Street continues to judge that it can bring the DUP on board on the Brexit package, with a political declaration that states the deal would be “temporary and time limited”.
    Secondly, and not unrelated, we had the press conference from the EU’s Chief Brexit negotiator which sought to strike an upbeat tone on the status of divorce agreement talks and seeking to play down the customs/border checks that might be required.
    On future arrangements, Mr Barnier also said the EU found many points of convergence with PM May’s Chequers plan, though clearly there is much more ground to cover on this than over the divorce deal.  It is being reported that May will meet with her inner Cabinet this evening, ahead of the Article 50 part of next week’s EU Summit (scheduled for 17 Oct).
    It looks as if the inner Cabinet will discuss how time limited the backstop (and with it continued UK customs union membership) should be, amidst the material pushback coming from the DUP. There are also rumours of threatened resignations of a couple of Cabinet ministers who have been excluded from this inner Cabinet gathering.
    Sterling remains above $1.32, albeit buoyed by a USD clearly on the backfoot.

    Thursday 4 October

    Bloomberg reports that Prime Minister Theresa May is drawing up plans to push a Brexit deal through the House of Commons within two weeks of it being agreed with Brussels.
    Rushing the deal through Parliament is a gambit to try and limit the opportunity for rebellion from within the Conservative Party itself, although it is likely to expose the Prime Minister to accusations she is denying MPs adequate time to scrutinise the terms of the deal.
    Bloomberg also reports that government ministers are aiming for a breakthrough on th Irish backdrop - the biggest sticking point in talks – by next week in time for the next EU summit on October 17-18.
    Overall the report suggests that the UK government is already war gaming how to get a deal approved by the Commons, although it remains far from certain whether they will be able to successfully head off any rebels.

  • September 2018

    Tuesday 25 September

    Labour party conference continues today, with shadow Brexit Secretary Keir Starmer set to give a speech saying Prime Minister Theresa May’s Brexit deal is increasingly unlikely to meet Labour’s six tests, with Labour therefore preparing to vote against the deal.
    While not a huge surprise, given reports to this effect in recent days, this is only likely to serve to highlight the challenge Mrs May is set to face when searching for support to see a vote on the Brexit package backed by Parliament later in the year or early next year.
    Note that the Labour conference will also vote later on today on keeping a second Brexit referendum as an option amidst a backlash from party supporters who favoured a tougher line which would have seen a second referendum as Labour’s favoured option; instead the party leadership continues to press for another general election.
    Meanwhile, from the government, yesterday’s Cabinet produced few fireworks, despite the reports over the weekend that Cabinet opinion was increasingly shifting against May towards a Canada style free trade arrangement. Indeed, at the end of it all it was reported that the Cabinet gave its full support to Mrs May’s Chequers White Paper, seemingly keeping differences in check ahead of Sunday’s Tory party conference.
    The pound recovered through much of Monday, albeit having ceded some ground overnight; currently the pound is at $1.31.

    Monday 24 September

    The fallout from the Salzburg Summit continued over the weekend, as the latest reports suggested that Theresa May will come under pressure at today’s cabinet meeting to ditch the Chequer’s plan following the EU’s rejection of the proposal last week.
    Sentiment within the Cabinet is reportedly moving towards some form of free trade agreement with the EU, with the Daily Telegraph this morning reporting that a majority now favour a Canadian style agreement. Last week PM May reiterated that the Chequers plan was the only option, but clearly there now looks to be some renewed pressure on the PM for a change of tact and notably this comes ahead of the Tory party conference, which begins this Sunday (30 September).
    The Labour party conference is also being held across the early part of this week, with Labour having agreed to hold a vote on Tuesday, for keeping all Brexit options on the table, including considering whether to hold a ‘peoples' vote’ or second referendum.  

    Friday 21 September

    Theresa May suffered a difficult day in Salzburg yesterday, as EU Council President Donald Tusk delivered a press conference which seemingly rejected the government’s Chequer’s proposal. Mr Tusk stated that the UK government’s suggested framework for economic cooperation would not work, as it undermines the single market.
    Tusk also failed to formally confirm a 17-18 November EU Summit, as some had expected. Instead the President stated that the possibility of a November summit would be considered at October’s EU Summit and would depend on whether sufficient progress had been made by that point. As well as the push back against the government’s Chequers proposal on future arrangements, there was also a call for further progress on the Northern Ireland border issues. Clearly there remains much that still needs to be agreed and the EU’s apparent rejection of the government’s plans leaves little time between now and the 18-19 October EU Summit to achieve Tusk’s ‘maximum progress’ to enable a November summit.
    Bloomberg has reported that PM is preparing fresh plans to break the deadlock, but this has not been confirmed anywhere else. Sterling is off is highs from yesterday afternoon, but cable still trading at $1.3250 this morning.

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    In Australia refers to Investec Securities a division of Investec Australia Limited. Investec Australia Limited is authorised and regulated by the Australian Securities & Investments Commission (Licence Number 342737, ABN 77 140 381 184)

    Registered Office Address: Level 23, Chifley Tower, 2 Chifley Square, Sydney, NSW 2000


    In Hong Kong refers to Investec Capital Asia Limited a Securities and Futures Commission licensed
    corporation (Central Entity Number AFT069). Registered Office Address: Suite 3609, 36/F, Two International Finance Centre 8 Finance Street, Central Hong Kong


    In India refers to Investec Capital Services (India) Private Limited which is registered with the Securities and Exchange Board of India, the Capital Market regulator in India as a research analyst,

    Registration number INH000000263.

    Registered Office Address: Unit no 607, 6th floor The Capital, Plot no C-70, GBlock, Bandra Kurla Complex, Bandra East, Mumbai 400051

    In Singapore refers to Investec Singapore Pte. Ltd. an exempt financial adviser which is regulated by the Monetary Authority of Singapore as a capital markets services licence holder.

    Registration No. 201634931E

    Registered Office Address: 80 Raffles Place #36-09, UOB Plaza, Singapore 048624


    In the United States refers to Investec Securities (US) LLC.
    Registered Office Address: 10 East 53rd Street, 22nd Floor New York, NY 10022


    Further details of Investec office locations, including postal addresses and telephone/fax contact details: