23 Oct

ABCC Brexit Update - MPs vote for PM Johnson's Brexit Deal then vote against its timeline - 23 October 2019

  • For the first time, MPs voted on Tuesday in favour of an EU Withdrawal Deal in the House of Commons.  With a majority of 30 (329 to 299), MPs voted to approve the first reading of PM Johnson's 110 page Withdrawal Agreement Bill (WAB).  Whilst the Northern Irish Democratic Unionist Party (DUP) voted against, 19 Labour MPs defied their party's whip to vote in favour of Johnson's deal.  Johnson had secured the deal with EU leaders last week.
     
  • However, in a blow to PM Johnson, MPs then voted with a majority of fourteen to reject the Government's accelerated timetable of three days to pass the WAB to meet the 31 October Brexit deadline.  Nine former Conservative MPs, having been thrown out of the party in September, voted to reject the timetable stating that more time was needed to scrutinise the Bill.
     
  • Johnson subsequently announced that he would pause the Bill's progression and again push for a General Election to break the parliamentary deadlock.  
     
  • Johnson said he would speak to EU leaders following the UK's 19 October request to extend the Brexit deadline to 31 January in the absence of a Brexit deal.  Speaking in the Commons, however, Johnson maintained his policy of leaving the EU on 31 October. 
     
  • Responding to the developments in a tweet, European Council President Donald Tusk said he will recommend to EU leaders that they accept the UK's request for an extension to avoid a no-deal Brexit on 31 October.  Tusk's tweet also stated that an EU summit would not be required to accomplish this.
     
  • Whilst it is likely that the request for an extension would be accepted, it remains unclear how long the EU would grant a further extension to allow the UK to come to a consensus.  The October 19 letter, as stipulated under the Benn Act, requests a delay extending to 31 January.  
     
  • The 19 October or ‘Super Saturday’ request to extend Brexit was sent to the EU after Parliament voted for the Letwin Amendment.  This prohibited PM Johnson from holding a ‘meaningful vote’  or clean ‘yes/no’ on his deal and required Parliament to withhold approval until the WAB is passed. This allows for amendments to the Bill.
     
  • On Monday 21 October, Speaker of the House of Commons John Bercow ruled against a request from Johnson to hold another ‘meaningful vote’, leading to yesterday’s votes on the WAB.
     
  • Commentators now moot the possibility of either a short technical extension from the EU to allow enough time to pass the WAB through the UK Parliament or a 'flextension', whereby a fixed deadline is set (possibly 31 January) but allows the UK to leave earlier if the UK is ready.  Once the UK Parliament passes a withdrawal bill, the EU Parliament will also hold a confirmatory vote.
     
  • ​​Speaking in the House of Commons, opposition Labour Leader Jeremy Corbyn said that Johnson was "the author of his own misfortune," but offered to discuss a "sensible" timetable for the WAB's scrutiny in Parliament.
     
  • ​Commentators note that whilst Parliament voting in favour of his deal can be seen as a success for Johnson (after three failed attempts to do the same by his predecessor PM Theresa May), it is now highly unlikely that PM Johnson will be able to meet his pledge to deliver Brexit by the 31 October deadline.
     
  • ​Commentators note that following the most recent developments, Johnson's options include:
    • 'taking a political hit' by reneging on his pledge to deliver Brexit by 31 October and accept the need for a short extension to allow time for Parliament to scrutinise the WAB; or 
    • should a delay extend to 31 January, withdraw the WAB and push for an election.  Possible General Election dates currently circulating amongst pundits include 28 November, 5 or 12 December.  Under the Fixed Terms Parliament Act, two-thirds of the House of Commons must agree to call an early election.  
       
  • MPs will now return to Parliament today and tomorrow to debate and vote on the contents of the 14 October Queen's Speech - when the Government set out its new legislative programme.  If the Government is unable to pass its Queen’s Speech (through a potential loss of support from the DUP), it would be the first time a Government has lost a vote on its Queen Speech since 1924.
     
  • Pound Sterling slipped against the U.S. Dollar following the outcomes in Parliament, down 0.5% at $1.29.

The ABCC and Brexit

The ABCC will continue to follow these developments closely. 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, General Manager, Victoria, South Australia & Western Australia

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