Fundamental Analysis Theresa May Channels King Canute Theresa May Channels King Canute Wednesday, 30 January 2019 11:17 Share 0 Tweet 0 Pin it 0 The legend of king Canute has it that as an object lesson to sycophants in his court who told him that he was all-powerful, he ordered the tide to retreat whilst he sat in a chair at the water’s edge with the predictable consequences. Theresa may seems to be attempting something similar with the EU, but it is unclear if she genuinely thinks she can command the political tide or is engaged in an object lesson for the right wing of her party. Yesterday saw parliament hold a series of debates and votes to amendments laid against Mrs May’s statement to the commons in the wake of the historic rejection of her EU withdrawal bill. Two of these amendments, the Grieve and Cooper amendments were thought to have a reasonable chance of being passed. The Grieve amendment could have passed control of the Brexit process back to MPs whilst the Cooper amendment would have mandated the PM to ask the EU to extend A50 notice if she had not got a withdrawal deal through the House by the end of February. In the end, both failed (by 20 and 23 votes, respectively – both would have passed if all Labour MPs had backed them). A further amendment, the Brady amendment got government support and passed with a majority of 16. The Brady amendment called on the PM to re-open negotiations with the EU with the intention of removing the provisions in the withdrawal agreement relating to the “backstop” from it such that it could no longer (theoretically) be permanent. The usual suspects were called upon to do this: incorporation of new technology to make physical checks on goods unnecessary; time limiting the backstop; enabling the UK to unilaterally withdraw from the backstop etc. All of these “solutions” had been discussed and rejected in the course of the negotiations either directly or tangentially, but Mrs Canute will try again. In backing the amendment, the government effectively voted against the deal which it had negotiated with the EU, a deal it claimed that was the only viable one. The sheer lunacy of the UK position was highlighted in the course of the day and immediately after the vote passed when the EU stated that it would not re-open negotiations on the withdrawal agreement, believing it to be the best (and indeed only) deal that could be made given Mrs May’s red lines. To add insult to injury, the ERG faction of her own party made it clear that they would not be bound by any deal she could bring back from the EU (should the EU change their stance), but would judge it on its merits. In practice, this kicks the can down the road for a further two weeks when, again, May is expected to make an amendable statement to the House. The other amendment of note (kinda) that passed last night was the Spellman amendment which, whilst not legally binding, called on the government to rule out a “no deal” exit from the EU, passing with a slim majority of 8 votes. It is significant in that May now knows that the House is opposed (formally) to a “no deal” Brexit. In the wake of last night’s entertainment, Sterling fell by more than a cent against the Dollar as forex investors tried to read the runes. At the time of writing, Sterling is again stable at the new, lower value. The development last night changes very little unless the EU buckle (which would seem highly unlikely) or May removes some of her red lines (which she can’t do if she wants to keep the ERG/DUP on board). Frankly, Canute had a more realistic chance of success. The leader of the opposition, Jeremy Corbyn, has agreed to meet the PM for talks on the withdrawal deal, but it seems unlikely that this will bear fruit either since he wants the UK to remain permanently in the EU’s customs union, something she has consistently rejected and something ERG would never condone. Dr. Mike Campbell Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.