Boris Johnson ups the ante in fight with MPs
Downing St raises the stakes in the fight with MPs over the “timetable motion”, the key vote tonight on whether Boris Johnson can railroad through the Withdrawal Agreement bill by October 31, writes George Parker.
Number 10 says that if MPs defeat the motion, they hand control over the Brexit process to the EU.
“There’s no guarantee the EU will support an extension,” Mr Johnson’s spokesman said.
“If MPs do finally vote for the deal, the public will expect them to get on with passing the legislation so we leave on October 31,” he added.
Barnier hints job ‘rebuilding’ EU-UK ties could outlast transition period
Michel Barnier, standing, and Jean-Claude Juncker at the European Parliament in Strasbourg
Michel Barnier, who will move from EU chief Brexit negotiator to a role helping to “rebuild” the EU-UK future relationship, hinted that his new job could last for as long as four years, well beyond the end of the 2020 transition period.
“Brexit is not the end of the story,” Mr Barnier told MEPs in Strasbourg. “The UK remains our friend, ally, partner and we have to rebuild.”
The 68-year-old Frenchman has spent the past three years working on the departure of the first EU member state to leave the bloc. He will lead a newly formed “UK task force” to oversee future trade talks and co-operation in judicial affairs, defence, and foreign policy with Britain after it becomes a third country, according to officials.
Negotiations could last “maybe two, three, four years for some areas to rebuild everything that is having to be unpicked as a result of the desire of those who wanted Brexit”, said the former French defence minister.
Brexit marks the “unpicking of 45 years of co-operation”, he said.
Read the full story here.
What’s ahead for the pound?
Traders have begun winding down their expectations for tumult in the currency markets as they weigh the chances of Boris Johnson’s Brexit deal rushing through parliament.
Moves in the options market show that expectations for sterling volatility over the next week have fallen sharply over the past few trading days, although they are still at elevated levels:
“We have turned bullish on the pound as the risks around Brexit have receded,” Deutsche Bank’s strategists said in a note published on Tuesday.
UK in 1972 took nine months to join; MPs in 2019 barely have nine days to take it out
Boris Johnson is asking the House of Commons to approve the WIthdrawal Agreement Bill in just three days, writes James Blitz, Whitehall editor.
Many MPs are certain to resist this timetable tonight when a Programme motion is put to the House.
Ahead of the vote, it’s worth considering how this compares with the time allowed parliament when the then prime minister Edward Heath introduced the European Communities Bill in 1972 to take Britain into the EC in the first place.
Heath signed the Treaty of Accession in Brussels on January 22 that year. The European Communities Bill was brought to the Commons on January 26 for First Reading.
MPs were then given more than three weeks to study the text before the big second reading vote on February 17.
On July 13, the House of Commons completed the third and final reading before passing the bill to the House of Lords. The bill received Royal Assent on October 17 1972.
In other words, Heath gave parliament a full nine months to scrutinise the legislative process to take the UK into the EC.
Mr Johnson is proposing that parliament has, at the very most, nine days to take Britain out.
Fears of a future no-deal will be in MPs’ minds
Just as fears over one no-deal deadline fade, another could be looming in the distance.
One of the most important and contentious parts of the parliamentary debate on the Withdrawal Bill is likely to be over the details of the post-Brexit transition period.
The government’s so-called WAB would introduce a transition period from the day Britain leaves the EU through to December 2020.
Many believe it is totally unrealistic to conclude a free trade agreement in that time, and so some MPs fear Britain could crash out of the transition arrangements – essentially a new no-deal Brexit risk – at the end of next year.
Labour MP Hilary Benn, who has been one of the key figures working to block a no-deal Brexit this year in parliament, tweeted:
If the Government doesn’t propose an extension, Parliament would have no say and we would exit the transition period on the 31 Dec 2020 even if a new trade agreement hadn’t been reached by then with the EU; ie it would mean no deal in just 14 months from now.
MPs bridle at lack of scrutiny as government hopes to ram through deal
Many MPs are furious at the unusually tight timetable for parliamentary scrutiny of the Withdrawal Bill.
The Johnson government is hoping to push the legislation though the Commons by the end of play on Thursday, as it zeroes in on that October 31 Brexit date.
The Institute for Government said this morning that such a timetable would be inappropriate for any major legislation, let alone one of such constitutional significance.
Dr Hannah White, the deputy director at the Institute for Government, said: “Anyone who claims meaningful legislative scrutiny is possible on this timetable is – at best – misguided.”
“Some MPs would have objected whatever scrutiny timetable the government had proposed. But this proposal seems designed to frustrate and anger MPs and to reinforce Boris Johnson’s pre-election messaging. It may also be designed to allow government to offer some concessions in the hope of persuading MPs to vote for the bill.
The Commons should not agree to the government’s proposed timetable for scrutiny of its Brexit deal today. It’s hard to believe the government thinks that they will.”
You can read the full report (it is significantly shorter than the actual hundred-odd page Bill) here.
Caroline Lucas, MP for Brighton Pavilion and leader of the Green Party, has pointed out that MPs had more time to debate the Wild Animals in Circuses Act.
Traders relish prospects of a pound rally
Sterling traders are becoming really quite excited about the prospect of a big rally tonight, writes FT’s currencies correspondent Eva Szalay.
If MPs back Boris Johnson’s deal when they vote at around 7pm, the much-talked-about sterling upside could materialise.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said the pound could rise to $1.35, from the $1.295 it was trading at recently, if the vote comes down in favour of a deal. Analysts at financial consultancy Capital Economics predict the same reaction.
However neither UBS nor Capital Economics is convinced that the deal will garner the required support while the threat of the UK’s leaving the EU without a deal lingers. Deutsche Bank analysts said the most likely outcome remains a general election but there are reasons to be “more optimistic”.
“There is now a roadmap towards a deal,” the German bank said in its latest house view.
Boles tables amendment to force government to request transition extension
Nick Boles, the Independent MP who left the Tory party this April, has tabled an amendment that would force the government to request an extension of the Brexit transition period to December 2022.
The legislation would avoid a chaotic situation in the case that the UK exits the EU under Boris Johnson’s withdrawal deal, but then fails to negotiate a trade pact before the Brexit transition ends in December 2020.
Mr Boles said his amendment would force the government’s hand, unless MPs pass a resolution to the contrary. “We must stop no-deal Brexit in December 2020 ,” he said.
Sterling hovers just below $1.30
The pound this morning has been steady, a day after it broke through the $1.30 level for the first time since May, as Boris Johnson looks to have a slender majority of five to pass his Brexit deal through parliament.
Sterling was recently down 0.2 per cent against the dollar at $1.2935 while it was down 0.1 per cent against the euro at €1.1610. Yesterday’s high against the dollar was $1.3012, according to Refinitiv data.
“The government’s Brexit deal will have to pass smoothly in the week ahead for cable to extend its advance and sustain levels above $1.3000,” analysts at MUFG Bank said in a note this morning. “Downside risks though should remain more contained now given it is difficult to see no-deal risk rising back up significantly.”
A Financial Times analysis, based on a forecast of MPs’ voting intentions, shows that 320 are expected to vote for his deal while 315 may oppose it.
“Pound volatility further out along the curve is already falling back in anticipation of Brexit risk fading in the coming months,” the MUFG analysts said.
In the three months since Boris Johnson came to power on July 24, the pound has had a choppy time. An initial tumble brought it to its lowest in that three-month period against the dollar of $1.1957 in early September. Since then it has gained more than 8 per cent against the US currency. Against the euro the dive came earlier, in August, but the gain since has been similar.
If the trend continues to the end of October, it will be on track to post its biggest monthly gain since September 2017.
Zara Myers at UBS expects a rally to $1.35 if the deal eventually passes in parliament.
Tusk: EU should treat UK extension request ‘in all seriousness’
Donald Tusk, European Council president, has told the European Parliament it should treat the British request for a Brexit extension “in all seriousness.”
Mr Tusk’s remarks come after he consulted with EU leaders today on how to respond to the request Boris Johnson sent begrudgingly (but did not sign) earlier this week.
The EU official said on Twitter:
Barnier urges UK MPs to vote for Johnson’s Brexit deal
The FT’s Mehreen Khan reports from Brussels:
Speaking to MEPs, the EU’s top negotiator Michel Barnier urged MPs to vote with the government and support a deal he said was the “only possible agreement”.
“If Britain wants an orderly exit, which is far better than a disorderly exit, then this is the only possible agreement”, said Mr Barnier.
What’s in the WAB
For something easier to digest, here’s a snippet with the crucial issues in the document.
The withdrawal agreement bill details these key points: the £39bn exit payment that the UK is paying the EU; the rights of EU citizens once the UK has left the bloc; and the trade settlement for Northern Ireland.
MPs and many other experts however have criticised the government’s decision to ram the 110-page document through all the stages by Thursday night. Second readings on bills normally take place no sooner than two weekends after the first.
Progress of the bill through parliament
So here’s what to expect for the bill to progress through to UK law:
The next step would be to vote for a second reading as the first came last night with the publication of the bill.
The second reading is the first opportunity for MPs to debate the main principles of the bill, which in normal times usually takes place no sooner than two weekends after the first reading, according to the House of Commons website.
Hello for another edition of ‘What’s going on at Westminster’
MPs are more than likely to have spent the night poring over the 110-page withdrawal agreement bill that Boris Johnson’s government published late last night. If you haven’t yet, do grab a coffee and take a read.
James Blitz gives a good round up for you to catch up on what to expect in coming days from Brexit
MPs will start debating around midday. Voting on the bill, the legislation that would bring Mr Johnson’s Brexit deal into UK law, is expected to take place this evening, around 7pm London time for the first one.
Parliamentary approval of the bill is critical to the Brexit process, as James Blitz writes. The treaty agreed between Mr Johnson and the EU cannot be ratified unless parliament has passed a statute to implement it.
If Mr Johnson rustles up the numbers to get the vote in principle through, that will pave the way for a second reading. As Adam says, that will be a moment since it will be the first time parliament has voted in favour of a Brexit agreement.
Today’s docket: House of Commons order paper
Will today be the day?
Boris Johnson seems to have the votes he needs to secure a majority on a vote in principle expected this evening on his Brexit bill.
This would represent a big moment for the UK prime minister since it will be the first time the House of Commons has voted in favour of a Brexit agreement.
Mr Johnson still faces a series of big challenges in getting the measure through the next stages of the approval process. He’ll attempt shortly after the so-called “second reading” of the Brexit legislation to push through a “programme motion” that would set a breakneck timetable for formal passage of the Brexit bill.
The prime minister is expected to face a tight vote on the programme motion. If it fails, the EU may be minded to offer an extension past the October 31 deadline, potentially of a few weeks.
Team FT will be here covering all the twists and turns in real time. Stick around for an exciting day and let us know what you think in the comments section.