Brexit “Big Finish” Ahead?
Yesterday saw the British Parliament vote again on indicative Brexit options. These “indicative” votes are non-binding, they are just taken so Parliament can feel like they are instructing the British Government, although the British Government is not bound by these votes. Not a single “real/full Brexit” option was put before the House, thanks to the blatant abuse of the process by pro-Remain Speaker Bercow. Yet his machinations amounted to almost nothing, as none of the four options were approved – all of them had more votes against than for. The only one which almost passed, failing by a margin of only three votes, was calling for the U.K. to remain in a customs union with the E.U.
I mentioned that the Government is not bound by these votes. Interestingly, provided the Government does not lose a full confidence vote in Parliament, the Government has the power to run out the clock and leave the E.U. on 12th April with no deal. I wrote on Sunday that I firmly believe that the Government would instead cancel Brexit by revoking Article 50 at the last minute if the only alternative was to allow a no deal Brexit to happen. Interestingly, rumors are coming out of the Government’s crisis cabinet meeting being held right now saying that Prime Minister May is still pushing for her deal but is now accepting that the alternative is no deal. I think she is bluffing, and that it was always going to come to this bluff in the end – no deal or her deal. The problem is that pro-Remain members of Parliament believe it is May that will fold in the face of a no deal Brexit, so they must force that choice on her between no deal and no Brexit. Don’t be fooled, the struggle in the U.K. is not between different types of Brexit, but over whether Brexit will happen at all, and whether Britain’s largest ever democratic vote in the 2016 will be respected. At stake is nothing less than whether the U.K. will remain a true democracy or not.
The Prime Minister may have another way out of this terrible binary choice – securing a long extension to the Brexit date, probably at least 8 or 9 months. This would almost certainly mean that the U.K. would have to participate in the elections for the European Parliament, and it is not certain that the E.U. would grant this extension. What would be the point? Even Prime Minister May knows this would only be kicking the can down the road.
I think we will see the British Parliament capitulate at the last minute before 12th April, if Prime Minister May holds her nerve. Yet that is a big “if”.
The British Pound has weakened since yesterday’s vote and is now trading just above the psychological level at 1.3000 against the U.S. Dollar. It looks heavy. If “no deal” were to happen, we will see the Pound plummet and make what will surely be the biggest move that will be seen all year in any major currency.