Parliament Supports May on Brexit Bill

The British Parliament seems primed to participate in a smooth transition out of the European Union, as the House of Commons approved the Brexit bill submitted by Prime Minister Theresa May. Next week, the lower house gets its final turn to vote on the May’s plan to trigger Article 50 in March. In a clear signal of a unified front, an attempt by Scottish legislators to defeat the bill was quickly defeated.

brexit-approved

Supreme Court Forced Prime Minister’s Hand on Brexit

The Parliament hearings became necessary after the British Supreme Court denied May’s appeal of a ruling by a lower court assigning the power to start the process of leaving the EU. In order to meet her self-imposed target of March 31st, May presented Parliament with a brief directive intentionally crafted to avoid the possibility for lengthy debate. The statement merely asks that the houses of Parliament give the Prime Minister the power to withdraw from the EU.

Labour Promises to Support May in Brexit Bill Vote

Opposition leader Jeremy Corbyn agreed to follow the lead of the British people, and cautioned Labour MK’s not to block the bill. Most complied, although about 50 representatives voted against the measure. Several of Corbyn’s Ministers also resigned rather than follow Corbyn’s decision.

House of Lords Could Still Derail Brexit Bill

After the second vote goes through, it reaches the U.K.’s upper house of Parliament by February 20th. The House of Lords might be more difficult to win over. Peers serve at the pleasure of the King or Queen of England, and don’t need to fear a backlash at the polls if they block the Brexit bill. However, the Labour members from this House have already stated that they would not work to defeat Brexit outright. However, it is possible that they could attempt to amend the bill, which would force it back to the House of Commons for a new vote. Potentially, this could go on indefinitely.

May Releases Detailed Brexit White Paper

After the House of Commons vote, May released a more fleshed out “white paper” on Thursday which went into greater detail on the points emphasized in her twelve point plan which debuted shortly before the Supreme Court decision. As expected, the white paper emphasized the desire for a “hard Brexit”, in which most ties to the EU would be completely severed. In the paper, May gives the rationale behind the U.K.’s need to control immigration, simplify bureaucracy, and renegotiate trade deals.

The white paper seems designed to calm the fears of Bremainer MKs. Several Labour representatives support the public’s right to make decisions about the direction of the country while still feeling personally that the decision itself was wrong. May has addressed the key points that unite Brexit supporters. Net migration has hurt the U.K. by making housing more difficult to find. It also lowered salaries for the most vulnerable citizens. The Prime Minister proposes controlling immigration through a new immigration system.  This could possibly be phased in, giving businesses the ability to prepare for hiring more local workers.

Re-nogotiated Tax Treaties Should Benefit Britain

The combined EU countries represent the largest destination for goods produced in the U.K.. Still, Prime Minister May points out that there is a substantial trade deficit. Ireland is the only EU country which imports significantly more from the U.K. than it send in exports. Given the reliance of the rest of the EU on the British market, it seems likely that the members will be willing to able to negotiate favorable tax treaties once the current arrangement ends. Additionally, Brexit will allow the U.K. to pursue better deals with other countries directly.

May Supports Lawmakers in the U.K.

Finally, Brexit requires laws and standards to be decided in the capitals of the various countries that form the U.K.. Currently Brussels to create legislation which often conflicts with the history and character of the British people. The U.K. will also withdraw from the EU’s Court of Justice. This will require new methods of dispute resolution for handling interactions with EU states. Given the U.K.’s history of global conflict management, May feels that finding ways to solve cross-border conflicts should be feasible.

How Does the Brexit Bill Vote Affect Trading?

The pound is the major beneficiary of the relatively smooth vote in support of moving forward with the Brexit plan. At this point, the biggest enemy for the British economy is uncertainty. Labour’s assurance that the country should remain fairly stable throughout the next two years helps the economy.  Investors now see the pound as a favored currency, especially in comparison to the dollar. Gold prices should rise more slowly, although it will remain popular in the near future, thanks to President Trump.