Brexit Bulletin: Out of Control

(Bloomberg) -- Today in Brexit: Theresa May dusts herself off after a bruising set of defeats.

It was a dramatic day in Parliament — and the vote on Theresa May’s Brexit deal isn’t until next week. The prime minister lost three votes in the House of Commons, one a historic defeat declaring the government in contempt of Parliament. The defeat forces May, against her will, to release the full legal advice underpinning her Brexit deal.

Yet that landmark vote was just the warm-up act. The second key defeat, on a motion proposed by veteran Conservative lawmaker Dominic Grieve, was even more important. It could materially shape the final Brexit settlement in the weeks ahead, with a path now open for amendments that could take Brexit in quite a different direction.

When the lower house ended its session in the early hours of this morning, most of Britain was fast asleep. It woke up today to some brutal newspaper front pages.

Parliament now has the potential to decide on Britain’s “plan B” if, as expected, it rejects May’s divorce agreement with the European Union in the biggest vote of all next week.

“No longer must the will of Parliament — reflecting the will of the people — be diminished,” Grieve said afterwards. “Parliament must now take back control and then give the final decision back to the public because, in the end, only the people can sort this out.”

Every possible outcome — May’s deal, an amended deal, no deal, a general election or a second referendum — seems equally unlikely. But as professional Brexit-watcher Anand Menon pointed out recently, even the most implausible of them may happen. 

Today’s Must-Reads

• Want to understand exactly what happened on Tuesday? Rob Hutton has the lowdown on how Parliament is flexing its muscles.
• May’s plan raises the prospect of a U.K.-EU customs union, perhaps indefinitely. Ian Wishart has more on what that means.
• Brexit is sending Britons to the drugstore for antidepressants, writes Mark Buchanan, noting that political chaos has consequences for public health. 

Brexit in Brief

Carney Hits Back | Bank of England Governor Mark Carney launched a vigorous defense against what he called “unfair” criticism of the central bank’s Brexit analysis, which said a disorderly departure from the EU could devastate the economy. Among the critics: his predecessor as governor. Carney told the Treasury Committee, which asked for the report, that the work was the result of two years’ effort, involving about 170 staff.

We’re Not Afraid | Some of the biggest money managers aren’t spooked by the prospect of the Brexit deal being voted down. “The best route to agreement is by raising the probability of no deal,” said James Athey of Aberdeen Standard, which oversees $736 billion and has bought the pound against the euro.

Science Investment | Biotech company UCB SA plans to invest about £1 billion ($1.3 billion) in the U.K. over five years as part of a government strategy to spur the life-sciences industry. Swiss pharmaceutical giant Roche Holding AG will invest a further £30 million, mostly in a precision cancer research partnership, the government said on Wednesday.

Odds Rising? | The U.K. is more likely to stay than leave on March 29, according to Smarkets, an online bookmaker. This is the first time since July that bettors have tipped their wagers that way.

New Regrets | More people than ever think that Britain was wrong to vote to leave the EU, a YouGov poll for The Times reveals. It found that 49 percent thought Britain was wrong to vote to depart, the highest figure to date, while 38 percent said Britain was right to choose to leave. This 11-point gap is the largest YouGov has had in this direction.

On the Markets | The pound suffered as tension mounted at Westminster, hitting $1.2659 at one point on Tuesday, its weakest since June 2017. It was at $1.2694 in early trading on Wednesday.

Coming Up | Chancellor Philip Hammond gives evidence to the Treasury Select committee. Brexit debate continues in the House of Commons, with security the day’s theme. 

Searching for Brexit | The relentless news cycle might feel somewhat interminable, but we know you’re interested. Online searches for “Brexit” have hit a level not seen since the aftermath of the 2016 referendum, according to Google data. It keeps us busy, so thank you for reading.

Want to keep up with Brexit?

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Jones Hayden

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