Never in the U.K.’s democratic era has a prime minister suffered such a parliamentary defeat. After a vote that took place on Tuesday, the MPs rejected the Brexit deal and simply crushed Theresa May’s plan to exit the European Union.
The Brexit deal was defeated with a resounding difference of 230 votes: 432 voted against the deal, while only 202 backed Theresa May. Although not everyone expected it, many of her own MPs turned against May and voted with the opposition.
After the vote, Labour leader Jeremy Corbyn called for another: a no confidence vote in the government which took place on Wednesday.
Reactions on Tuesday’s Vote from Key Names in the Brexit Deal
Jeremy Corbyn wasn’t the only one to react. Immediately after Tuesday’s vote, Theresa May said, according to Reuters, that she always believed that a clean Brexit deal would be the best way to exit the E.U. and she asked everyone who voted against to work with the government for a solution.
Key names representing the European Union also reacted on Tuesday:
• Jean-Claude Juncker, the President of the European Commission, wrote on his Twitter account about Tuesday’s vote: “I take note with regret of the outcome of the vote in the House of Commons this evening. I urge the U.K. to clarify its intentions as soon as possible. Time is almost up.”
• Antonio Tajani, the President of the European Parliament, asked the U.K. to surpass the political deadlock and to offer clear solutions regarding the Brexit deal, after the agreement was rejected by the House of Commons, Adnkronos reported.
• Donald Tusk, the President of the European Council, reacted as well on the same Social Media channel, questioning: “If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?”
The Question Everyone Has on Their Lips: What happens After the Results of the No-Confidence Vote?
Although Prime Minister Theresa May said on Wednesday that Britain will be leaving the E.U. on March 29 as agreed, on Wednesday a no-confidence motion took place.
Labour’s Liam Byrne declared that May has built “a cage of red lines” around her Brexit policy, while Theresa May believed that “a general election will not help the country find a solution to Brexit”.
Despite tension increasing with every minute, the British Prime Minister had a slim victory in the no-confidence vote, winning by 325 to 306 votes.
After the vote, Theresa May declared: “This evening the government has won the confidence of parliament. This now gives us the opportunity to focus on finding a way forward on Brexit. I understand that people getting on with their lives outside of Westminster, the events of last 24 hours will have been unsettling. Overwhelmingly, the British people want us to get on with delivering Brexit, and also address the other important issues they care about. But the deal I’ve worked to agree with the European Union was rejected by MPs and by a large margin. I believe it is my duty to deliver on the British people’s instruction to leave the European Union and I intend to do so. So now MPs have made clear what they don’t want, we must all work constructively together to set out what parliament does want. That’s why I’m inviting MPs from all parties to come together to find a way forward, one that both delivers on the referendum and can command the support of parliament. This is now the time to put self-interest aside. I have just held constructive meetings with the Leader of the Liberal Democrats [Vince Cable], and the Westminster leaders of the SNP and Plaid Cymru, [Ian Blackford and Liz Saville Roberts, respectively]. From tomorrow meetings will be taking place between senior government representatives, including myself, and groups of MPs that represent the widest possible range of views from across parliament, including our confidence and supply partners, the Democratic Unionist party. I am disappointed that the leader of the Labour party [Jeremy Corbyn] has not so far chosen to take part, but our door remains open. It will not be an easy task, but MPs know they have a duty to act in the national interest, reach a consensus and get this done. In a historic vote in 2016 the country decided to leave the EU. In 2017, 80% of people voted for parties that stood on manifestos promising to respect that result. Now, over two-and-a-half years later, it’s time for us to come together, put the national interest first – and deliver on the referendum.”
Corbyn’s refusal to participate in the discussions, Tuesday’s and Wednesday’s votes have led to uncertainty in the U.K. when there are only two-and-a-half months to the Brexit deal.
What Happened on the Markets Recently?
After May’s defeat on Tuesday, the sterling jumped by more than a cent against the U.S. dollar, and held close to that level on Wednesday. Although May’s deal suffered a great fail Tuesday, according to Investing.com, “many investors see the prospect of exiting with no deal at all receding as parliament hardens its stance against it.”
The U.K.’s Prime Minister believes that cancelling the Brexit is likelier than leaving with not deal. She also stressed out that she is determined to leave the E.U. and described that not leaving the E.U. as decided by the 2016 referendum would be “catastrophic” for the British democracy.
Companies also reacted to the discussions related to the Brexit deal, bracing a possible chaos due to a no-deal which could lead to changing the trade rules of the E.U. with the rules of the World Trade Organization. Many companies believe that such a move could disrupt supply chains to rely on friction-free trade. According to Investing.com, UBS Wealth Management even informed investors to limit their exposure to U.K assets.
FTSE 100 Hurt by the MPs Vote
Analysts interpreted Tuesday’s vote results as positive for the market, still Wednesday evening kept trading muted.
"There's still quite a lot of uncertainty...a hard exit is a lower probability risk than it was but I don't think we can completely discount it," said Caroline Simmons, deputy head of the UK investment office for UBS Global Wealth Management.
Still, the result of Tuesday’s vote had a different impact over trading instruments.
The FTSE 100 (FTSE) was down 0.6% by 0930 GMT, while euro zone stocks (STOXXE) held flat and Germany's DAX (GDAXI) fell 0.2%. The top British index was dragged down by stocks like Unilever (L:ULVR) and Diageo (L:DGE), while the biggest boost to European indices was provided by bank shares (SX7P), up 0.9%.
BNP Paribas (PA:BNPP), AXA (PA:AXAF) and Intesa Sanpaolo (MI:ISP) were the top three boosts to Europe's STOXX 600 (STOXX), but the gains were unconvincing.
What will happen next on the markets? Find out by keeping a close eye on the Brexit evolutions and our news section.
Sources: Euronews.com, TheGuardian.com, Twitter.com, @eucopresident, @JunckerEU, Adnkronos.com, Reuters.com, Investing.com, BBC.com
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