Market news
21.10.2019, 13:44

Five big Brexit hurdles facing UK's PM this week - ING

James Smith, a developed markets economist at ING, notes that, though the UK PM may have a narrow majority for his revised Brexit deal, there are plenty of things that could derail the government's efforts to ratify the agreement before 31 October.

"1. Meaningful vote 2.0

  • Now that PM Boris Johnson has sent the letter asking for an Article 50 extension, there is talk that the government will have another stab at a meaningful vote.
  • The hope is that if the government can demonstrate it has a majority for its deal, it will give momentum to the passage of the withdrawal agreement bill (WAB) later in the week.

2. Second reading of the Withdrawal Agreement Bill - Tuesday

  • That means the first big event this week is likely to be the second reading of the Withdrawal Agreement Bill (WAB) - currently pencilled in for Tuesday, 22 October.
  • This is where MPs get to give their initial consent to the Brexit legislation - so effectively this is likely to be where we find out whether there really is a majority for PM Boris Johnson's deal.
  • Clearing the second reading milestone will be a big win for the government, although, in reality, this is likely to be where the real fight begins.

3. Programme motion

  • If the second reading of the bill passes, then the government will need to formally spell out how it intends to get it through parliament at breakneck speed.
  • Don't forget that by historical standards, 10 days is a very ambitious timeframe to get a bill approved by lawmakers.
  • Lawmakers will need to approve this timeline, and given that this is a matter of significant importance, will MPs be comfortable with the legislation going through so quickly and with minimal scrutiny? This could be a challenge for the government, and failure to get this motion approved will basically rule out leaving the EU on 31 October.

4. The amendments (committee stage)

  • However, if MPs give their blessing to the government's accelerated timeline, the process will move to the committee stage. This is where MPs put forward amendments - and this could make-or-break the government's ambitions of getting the Brexit deal ratified this side of a general election. You can safely bet there will be an amendment put forward to make ratification of the deal conditional on holding a second referendum. But despite the Labour Party giving their blessing, most do not think this has the numbers in parliament. 
  • There may also be amendments trying to add conditions to the payment of the £39bn 'divorce bill'. But the real focus will be on an amendment to try and force the government into negotiating customs union access as part of future trade talks.

5. A vote on whether to trigger a general election - later in the week

  • If the government goes with the latter option, then there may well be a vote at some point this week on whether to trigger a general election. That could feasibly see the UK go to the polls in late November or early December.
  • But as we discussed last week, Labour MPs will also need to agree to an election - and with the Conservatives flying in the polls, many will be very reluctant.
  • These lawmakers are unlikely to be able to resist the pressure for an election forever, but there is growing talk that the timing of it could slip into 2020. Labour MPs may be hoping that some of the recent Conservative momentum will fade over the winter, which could in-turn help Labour shift attention back to its domestic agenda."


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