28 Feb 2019

For a built-up area, Westminster appears to have an ample supply of long grass into which the key Brexit questions have been kicked since January 2019. Significantly, the House of Commons' latest round of votes has identified 12 March as the date by which the fate of the government's Withdrawal Agreement must be determined. However, that does not mean that the final shape – or even the final date – of Brexit will be known by the end of that day. For now, the most credible potential outcomes are:

  • The government secures a House of Commons resolution by 12 March in favour of the Withdrawal Agreement and Political Declaration (WA), perhaps with some amendment or supplement to address concerns relating to the Northern Ireland "backstop" arrangements; or
  • The House of Commons again rejects the WA, but then votes on 13 or 14 March to rule out a "no deal" Brexit; and
  • The House of Commons then votes on 14 March "on whether parliament wants to seek a short limited extension to article 50, and if the house votes for an extension, seek to agree that extension approved by the house with the EU, and bring forward the necessary legislation to change the exit date commensurate with that extension.”

Can we rule out a "no deal" Brexit?

Those outcomes reflect the House of Commons' 502 - 20 vote in favour of the "Cooper Amendment", tabled on 27 February to hold the Prime Minister to her assurance that the House of Commons would be allowed to vote on a motion ruling out a "no deal" Brexit if the WA has not been approved by 12 March. However, we cannot yet advise clients that a "no deal" Brexit has been successfully averted – nor can we point to any new clarity on the final terms on which Brexit would occur following that process. 

The closing words of the Cooper amendment are crucial. If the House of Commons were to rule out a "no deal" Brexit then it would also have to vote for an extension to the Article 50 notice period (which is due to expire on 29 March), secure the EU's agreement to that extension, and then pass the legislation needed to reverse the current legal position, which dictates a 29 March Brexit whether or not there is a deal.

The Cooper amendment did not address the length of any possible delay to the Article 50 notice period. While the amendment passed with a majority of 482 votes, that majority does not include a consensus on the extent of any delay, or on what might replace the government's current WA. In the same set of votes, the House of Commons rejected by 323 – 240 votes the Labour Party amendment setting out the key features of its preferred Brexit deal , including a customs union and regulatory alignment with the EU single market.  

Rejection of the Labour Party amendment demonstrates that while there might be a significant House of Commons majority against a "no deal" Brexit, there is no firm or reliable majority in favour of any particular deal. Further, rejection of Labour's amendment increases the likelihood that they will now seek a further referendum, quite possibly including a "no Brexit" option, but also providing for a renewed "leave" mandate.

Consequently, the Prime Minister's statement after the 15 January defeat remains valid. We may yet see Brexit with a deal, Brexit with no deal, or no Brexit. 

Hope for the best, prepare for the worst?

Many of the speeches during the 26-27 February debate in the House of Commons emphasised the negative consequences of a "no deal" Brexit. There does seem to be a strong and durable majority in Parliament seeking to avoid that outcome. However, given that the legislative position continues to prescribe a "no deal" Brexit as the default position, the House of Commons must act swiftly to match political will with Parliamentary skill if it is to avert that risk. Then, arguably, would come the more difficult task: finding a Parliamentary majority in favour of a withdrawal agreement that can also be agreed with the EU. 

The Cooper amendment might provide business with hope: it does not deliver certainty.