Richard Lawrence – Senior Vice President, Portfolio Management

It was a head-spinning week in the U.K. where three significant votes took place in Parliament, along with several arguably less important amendment votes along the way also. To recap the key votes:

  • On Tuesday, March 12, Prime Minister Theresa May’s Brexit deal with the European Union (EU) was once again defeated (391-242), although by a narrower margin than in January (432-202)
  • On Wednesday, March 13, the House of Commons voted (321-278) to rule out leaving the EU with no deal on March 29, aka “Hard Brexit”
  • On Thursday, March 14, they voted to extend the Article 50 period which expires on March 29 (412-202)
  • On Monday, March 18, Speak of the House of Commons John Bercow refused to put the prime minister’s deal up for a re-vote if the content was “the same in substance.”

So where does this leave the process? May had expected to present her Brexit deal for a vote for the third time in two months. Why did she do this? Probably because the votes last week put her deal in a different light—with Hard Brexit theoretically off the table and an agreement to extend the Article 50 negotiation period, some members of Parliament who previously voted to reject the deal may be forced to reconsider their vote. This is particularly true of the Eurosceptic wing of the Conservative party who now have to choose between supporting this deal or face the prospect of a long extension of the Article 50 period, which creates the time—and possibly the momentum—to negotiate a softer Brexit, or perhaps even put the prospect of a second referendum on the table, which the Eurosceptic wing wants to avoid at all costs. Furthermore, a long extension will then require the U.K. to participate in elections for European Parliament in May. Now, the speaker has complicated her negotiation strategy, and the prime minister will go to Brussels later this week to negotiate the duration of the Article 50 extension.