Parliament moves to delay Brexit

The British Parliament is moving closer to a plan to delay Brexit in order to stop the country dropping out of the European Union with no deal and avoid the risk of an economically damaging divorce.

The March 29, 2019 deadline was expected to arrive without a firm exit deal for Britain after the recent defeat of PM May’s Brexit plan. 

Background 

Parliament, is the supreme legislative body of the United Kingdom, and the British Overseas Territories. It alone possesses legislative supremacy and thereby ultimate power over all other political bodies in the UK and the overseas territories. Parliament is bicameral but has three parts, consisting of the Sovereign (the Queen-in-Parliament), the House of Lords, and the House of Commons (the primary chamber).

On June 23rd, 2016, Britain narrowly voted to leave the European Union, stunning Europe and the world in general. The EU employs a set of policies for its 28-member states that aim to ensure the free movement of people, goods and trade among other services. Britain is deeply intertwined with the workings of the EU especially with regard to trade.

PM Theresa May’s leadership in the negotiations has been heavily criticised. She has been unable to form a consensus within the Parliament, or even her own party, for the course of Brexit. Her “directionless” leadership has not convinced most of her peers in Westminster and she was challenged by a no-confidence motion in early December 2018, which she narrowly won.

Despite her best efforts, the British parliament is not accepting the proposed Brexit agreement. Irrespective of whether they arrive on a deal or not, the UK is officially set to leave in March 2019.

Analysis 

The main opposition Labour Party is now increasingly likely to support a proposal to extend the March 29 exit day deadline if Prime Minister Theresa May fails to negotiate a divorce agreement, said Mr. John McDonnell, the party's chief finance spokesman. He described the proposal as a "sensible" way to avoid the upheaval of a disastrous no-deal Brexit.

"I actually do believe that we are facing, with a no-deal, potentially quite catastrophic consequences for people's living standards - that's why we have said we've got to avoid it," Mr. McDonnell said. "I think there's a majority in Parliament for avoiding no-deal."

If Labour does support the proposal - put forward by lawmakers including Ms. Yvette Cooper, a former minister - it is far more likely to win enough backing to be passed. That would force Mrs. May's hand and ensure she cannot take Britain out of the EU without a deal in nine weeks' time.

Brexit is at an impasse, with members of Parliament overwhelmingly opposed to the divorce agreement Mrs. May has negotiated with the EU, and time running short for delivering an orderly separation. If Parliament refuses to endorse the exit terms, Britain will be on course to fall out of the EU with no agreement on March 29 - an outcome British authorities say could deliver as much as a 25 per cent hit to the pound and a 30 per cent hit to house prices, risking a recession.

Mrs. May's deal was rejected in the biggest defeat suffered by a British government in the House of Commons in recent history. In the week since she lost the vote, Mrs. May has tried - and so far, failed - to reach a cross-party consensus on the way forward. The Prime Minister is pinning her hopes on persuading the EU to back down and make changes to the terms of Britain's departure. With the prospect of any significant alterations to the deal seeming unlikely, British MPs are taking matters into their own hands.

Labour's Cooper has joined forces with senior politicians in Mrs. May's Conservative Party to put forward a plan that would potentially force the Premier to seek to delay Brexit by applying to extend the EU exit procedure.

With Labour's official support, such a plan will have a good chance of success when it's debated and voted on next week. The advantage of the Cooper plan for business would be in taking a potentially chaotic no-deal split off the table.

Assessment 

Our assessment is that the possibility of Brexit not happening altogether is getting stronger with every failure of the Theresa May government to reach a cross-party consensus on the way forward. We believe that a vast majority of  firms are not prepared to leave Britain without a trading agreement in place as they have complex supply chains that would get disrupted.