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Countdown to Brexit – what happens now?

Written by Ipswich Building Society

16 Jan 2019


Brexit, Personal finance

3 min read

Well, they’ve only gone and done it!

After almost two years of painstaking negotiations, one withdrawn vote, one leadership challenge and no fewer than twenty-one government resignations, Parliament has voted overwhelmingly to reject Theresa May’s much-maligned Brexit deal.

So – what on Earth happens now?

The deal was defeated by 432 votes to 202, the largest defeat for a sitting government in modern UK history – and it’s now up to them to set out what should happen next, whether that be to go back to the EU and ask for more concessions, to commit to leaving without a deal or eventually to announce a fresh election or a referendum. One thing is clear however – the clock is still ticking and the economy is looking a bit more uncertain than it did yesterday.

To many of course, politics may as well be a foreign language – you might be asking what the political deadlock in this country actually means for the average joe.

Sterling rallied after the vote yesterday as most businesses and the stock market priced in a big government defeat. However, over the coming days and weeks any fall in the value of Sterling likely means more misery for those who might be waiting to book their European summer holidays. A weaker Pound also means the price of fuel and food is likely to start creeping up. And for businesses who rely on frictionless access to European markets or who import goods from overseas, they may now find that their prices have gone up as continuing uncertainty ahead of a possible no-deal exit from the EU forces companies and governments to ramp up their contingency planning.

It doesn’t take the most astute observer to see that Brexit has almost entirely sucked the life out of Parliament, with the monumental challenge of Brexit leaving little or no bandwidth to deal with many of the pressing challenges facing our country such as housing or social care.

You might be forgiven for thinking nothing has really changed – and while might seem true on the face of it, the fact that the deal has been voted down means Theresa May looks likely to secure more meaningful reassurances, or even changes, to the Withdrawal Agreement (providing she wins the no-confidence vote tabled in her government by Labour leader Jeremy Corbyn.) She has already stated her intention to work with parties across Parliament in order to seek consensus to move forward. It also looks certain that the PM will try again to push her amended deal through parliament, perhaps with the help of some Labour votes and by bringing members of her own party and the DUP back on side – and she may yet succeed, putting us back on course to leave the EU with the deal that has been agreed.

But should the deal fail a second time, it may be that the government or Parliament has to look again to find some sort of consensus, even if that means embracing a closer relationship with the EU than the Prime Minister intended or by announcing a referendum or an election to break the deadlock in Westminster.

The next few days are likely to become some of the most important in British political history – Brexit is now in the endgame, but there may yet be much further still to travel!

This article was published under our previous name of Ipswich Building Society. We changed our name in 2021 – find out more.

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