27 Mar

ABCC Brexit Update – 27 March 2019 - Parliament to Hold Indicative Votes on Alternative Brexit Options

  • Following the EU’s decision to extend Brexit until 22 May, the UK Parliament voted on 25 March by 329 to 302 to hold a series of ‘indicative votes’ on Brexit alternatives to PM May’s Brexit Withdrawal Deal.  The amendment to hold such votes and ‘take control of parliamentary business’ was tabled by pro-Remain Conservative MP and former Cabinet Office minister Oliver Letwin.
  • Thirty Conservative MPs voted against the Government in support of Letwin’s amendment.  Three ministers, Business Minister Richard Harrington, Health Minister Steve Brine and Foreign Minister Alistair Burt resigned after voting in favour of the amendment.
  • The vote followed rumours over the weekend of potential challenges to PM May’s premiership by leading figures such as David Lidington, the de-facto Deputy Prime Minister and Michael Gove, Secretary of State for Environment, Food and Rural Affairs.  Both subsequently distanced themselves from the rumours and backed PM May’s continued leadership.
  • The series of indicative votes on Brexit alternatives will take place later today, 27 March at 7pm London time (6am tomorrow, AEST) in the House of Commons. 
  • In a process which could last until next week, MPs will first have the ability to vote for an unlimited amount of Brexit options.  In light of the Government’s inability to so far pass PM May’s Brexit Deal, the aim of tonight’s exercise is to identify an alternative that could coalesce enough support in Parliament to move forward.  A second round would follow in the coming days to whittle down possible alternatives.
  • Subject to agreement by the Speaker of the House of Commons, indicative votes could be held on possible Brexit alternatives including:
    • No Deal – with the UK leaving the EU and trading on World Trade Organisation (WTO) terms
    • Free Trade Agreement – similar to the existing EU-Canada Free Trade Agreement.
    • European Free Trade Association (EFTA) or European Economic Area (EEA) Membership
    • Common Market 2.0 – also known as Norway Plus with the UK remaining in the Customs Union and Single Market with a ‘comprehensive customs partnership’ to replace the Northern Irish backstop plan.
    • Malthouse Compromise:  PM May’s Deal without the Northern Irish Backstop.
    • Second Brexit Referendum
    • Revocation of Article 50 – effectively cancelling Brexit.
    • For further information, please refer to the Financial Times and the BBC
  • It is still unclear whether Government ministers will be permitted to vote according to their conscience (or in a free vote) for the indicative votes.
  • The indicative votes are not binding on the Government.  However, any coalescence around a single alternative would put pressure on PM May to seek a Plan B if she is unable to pass her Brexit deal in a third meaningful vote (now known as ‘MV3’). 
  • Any option that reaches coalescence in the House of Commons would still need to be agreed by the EU.
  • Despite speculation that PM May’s existing deal would be tabled for an indicative vote, Downing Street has confirmed that this will not occur on 27 March. 
  • PM May is not expected to table her Deal for a third time until she gains the support of the influential Conservative pro-Leave European Reform Group (ERG) and the Northern Irish Democratic Unionist Party (DUP).  Both have refused to back her deal over the contentious issue of the Northern Irish Backstop.
  • With Parliament ‘taking control of parliamentary business’, there is growing speculation that hardline Brexiteers and ERG members may reconsider backing PM May’s Deal in an MV3. 
  • According to The Telegraph, eleven Conservative MPs, including Jacob Rees-Mogg, who previously voted against May’s Deal have signalled they are prepared to switch sides.  Mogg, the leader of the ERG group, said that the deal was “definitely not” worse than remaining in the EU.
  • There is strong speculation that ‘many more’ Conservative MPs, who have previously voted against May’s Deal, could be persuaded to change their minds if May agreed to set out her departure date as Prime Minister.  May is expected to address the 1922 Committee of Conservative backbench MPs later today.  It is expected that they will press their case for a timeline of the PM’s departure.
  • Former Foreign Secretary and prominent Leaver, Boris Johnson hinted he could be persuaded to back the Deal if PM May agreed to quit.  Speaking on 26 March, Johnson said, “if people like me are to support this deal…then we need to see the proof that the second phase of negotiations [on a future UK/EU trading relationship] will be different from the first.”
  • There are conflicting messages from the DUP on whether they will back May’s Deal in an MV3.  Sammy Wilson, the DUP’s Brexit spokesman said a one-year delay to Brexit would be a “better strategy” than May’s Deal.  According to commentators however, Wilson’s comments do not reflect party thinking and an official spokesman said that its position remains unchanged.
  • DUP support is essential if PM May wants to pass her deal in an MV3.
  • Should PM May be unable to pass her Deal through Parliament in an MV3, the UK Government is obliged to propose a different way forward to the EU by 12 April or leave the EU without a deal.
  • If May is able to pass her Deal, the UK is scheduled to leave the EU on 22 May.

The ABCC and Brexit

The ABCC will continue to follow these developments closely in the coming weeks.  We look forward to keeping members up to date with the very latest from London and what it possibly means for the Australian-British business community.   Earlier ABCC Brexit updates can be found on the ABCC Blog.

If you would like to receive more frequent Brexit updates or have any questions, please feel free to contact our office on abcc@britishchamber.com.

By Paul O’Hagan

Paul O’Hagan is the ABCC’s General Manager in Victoria, South Australia and Western Australia.  Prior to joining the ABCC, Paul was Senior Political and Economic Advisor to the U.S. Government in London, covering Brexit.


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