House of Lords Deals May a Second Brexit Blow by Requesting Veto Powers

Theresa May is fighting against members of her own party to retain control over the Brexit process. On Tuesday, a group of Conservatives led by advisor Michael Heseltine joined the vote to amend the bill May introduced to the U.K.’s House of Lords. This is the second proposed change to the Brexit bill, and could cause a delay in meeting May’s deadline for triggering article 50, thereby beginning the procedure of leaving the European Union. The House of Lords is trying to give Parliament more say in negotiations between Great Britain and Europe, and also hopes for more security for European nationals living in the U.K.

Theresa May faces a second defeat as House of Lords votes for Brexit veto powers.

The House of Lords Demands Veto Power Over Brexit Negotiations

In the latest defeat, the House of voted overwhelmingly in favor of the right to force May back to the negotiating table if she is unable to secure a favorable deal once she starts talking to the EU about the specific terms behind Great Britain’s departure. This undercuts the Prime Minister’s threat that she would be willing to unilaterally end the relationship by walking away if the discussions reach an impasse. House of Lords voiced concerns about the negative implications of a “hard” Brexit. They also added a clause which gives Parliament a veto over any agreement.

Heseltine Leads the Conservative Brexit Opposition

In retaliation for his role in the vote, Prime Minister May fired Heseltine from his role as a government advisor. He had spent the previous six years focusing primarily on real estate and infrastructure issues under former PM David Cameron. Heseltine expressed disappointment over May’s decision to end his position, but stood behind his actions, saying “All people like me in the House of Lords are saying is that the ultimate sovereignty of this country lies in Parliament. That’s what the Brexit people have been saying along: ‘We’ve got to have sovereignty back.'”

Second Defeat for May’s Brexit Bill

This is the second amendment made to the Brexit bill. The House of Commons originally passed the bill without any changes. The first change came last week. The House Lords demanded guarantees regarding residency rights for non-U.K. citizens who were living in the country as part of the EU open border policy. May admits that it is a priority to clarify the status of EU nationals. However, she prefers to nail down specifics regarding this matter after the other EU countries guarantee similar rights for U.K. citizens. So far, the EU has been unwilling to make assurances until article 50 is invoked.

The House of Lords Holds Brexit Hostage

Any amendments to the Brexit bill require a new vote in the House of Commons. Both the lower and upper houses must pass the final bill in an identical format. The opposition could theoretically delay the U.K.’s departure from the EU. They just need to suggest amendments until they are either accepted, or until the public outcry over the direction of the exit causes the matter to be dropped.

The Conservative Party has a slim majority in the House of Commons. The lower house is also subject to reelection worries. MP’s may switch their votes on a second round if public opinion begins to go against Brexit. Given the current situation, the likelihood that May will be able to meet her self-imposed deadline of March 31st for triggering Article 50 is in doubt.

How Does the House of Lords Vote Affect Trading?

Financial analysts worry that the pound will resume its fall. The currency experienced a drop after the government announced the results of the Brexit vote. Uncertainty is the major enemy of the British economy. Any delays in putting forth a specific plan and timetable work against the U.K.’s domestic industries. However, Europe can find some solace, as the upper house has definitely taken a stand against a “hard” Brexit. This means that there is more room for negotiation regarding the sticky issues of treaties and cross-border employment.

The London FTSE will also drop as British banks move out of London. The banks are sending staff to other EU locations in an attempt to maintain access to European clients. Additionally, some companies like Amazon were reassured when May first announced her 12 point plan. However, they may wait to go forward with expansion plans until the Brexit vote is completed.