May faces uphill struggle to secure crunch Brexit vote

PM may gamble that negative market reaction will persuade MPs to change their minds

British Prime Minister Theresa May tells UK parliament that there's no deal without a backstop during a pitch for her deal on Monday November 26th. Video: Parliament TV

 

For the third time in less than two weeks, Theresa May stood at the dispatch box to make a statement about her Brexit deal and for the third time she had to wait an hour for a friendly question. Much of the hostile fire came from the benches behind her but after David Davis, Boris Johnson, Iain Duncan Smith and John Redwood savaged the deal, it looked as if the prime minister was about to get some respite.

The speaker called Michael Fallon, the former defence secretary who was such a reliable advocate for government policy that he was known as “the minister for the Today programme”. But even he could not support the deal.

If MPs reject the deal, a number of outcomes are possible, including a second referendum and no deal, but none is certain

“Nobody can now doubt that the prime minister has tried her very best. Are we not none the less being asked to take a huge gamble here: paying, leaving, surrendering our vote and our veto without any firm commitment to frictionless trade or the absolute right to dismantle external tariffs? Is it really wise to trust the future of our economy to a pledge simply to use best endeavours?” he said.

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With just two weeks to win over MPs before the “meaningful vote” on December 11th, the prime minister’s strongest argument is that her deal is the only one that guarantees a certain outcome. If MPs reject the deal, a number of outcomes are possible, including a second referendum and no deal, but none is certain.

Second vote

There has been much speculation that May will bring the deal back to the Commons for a second vote if it is defeated next month, hoping that a negative financial market reaction will persuade MPs to change their minds, as congressmen in the US did over the Tarp bank bailout programme a decade ago. The danger is not only that more MPs will vote against the deal if they think there will be a second vote but that the markets also fail to react to the first vote because they have priced in a second vote.

A narrow defeat could allow May to return to Brussels seeking some cosmetic changes or additions to the non-binding political declaration in the hope of persuading a handful of MPs to change their minds. A comprehensive defeat could make it impossible for her to remain in Downing Street, triggering a Conservative leadership contest in the midst of Britain’s most serious political crisis in living memory.

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