Brexit Bulletin: The Rebels Strike Back

Brexit is 57 Days away.

(Bloomberg) --

Today in Brexit: The rebel alliance takes back control as a wounded Boris Johnson seeks an electoral escape.

What’s Happening? Lots, to be honest. Shortly after 10 p.m. last night Boris Johnson lost his first parliamentary vote as U.K. prime minister by 328 votes to 301, a key victory for lawmakers intent on ruling out a no-deal Brexit on Oct. 31. In an immediate response, Johnson said he is prepared to seek a general election, a move that requires the consent of two-thirds of MPs. Almost as quickly, opposition leader Jeremy Corbyn, who controls many of those votes, said his party would oppose any election plan until no-deal is formally off the table. 

As the dust settled, the 21 Conservatives who rebelled against their prime minister in the vote were effectively thrown out of the party in retribution. They included Philip Hammond, chancellor of the exchequer until July this year, Kenneth Clarke, who held the same job in the 1990s, and Nicholas Soames, a veteran MP and grandson of Johnson’s hero Winston Churchill.

None of this solves the U.K.’s Brexit riddle. Opponents of a no-deal divorce from across the House of Commons now have a chance to push through a bill requiring the prime minister to seek a new Brexit extension. That’s on the cards for today. But a delay will not on its own produce a revised Brexit deal that this divided Parliament can vote for. And yes, Corbyn can try to hold out against an election until no-deal is a more distant prospect. But delaying an election doesn’t make one any less necessary. Johnson’s majority in Parliament collapsed on Tuesday from 1 to -43, usually an untenable position for any prime minister.

With his “do or die” Brexit policy now under huge pressure, the ball, to paraphrase Boris Johnson himself, is about to come loose at the back of the scrum. To unlock a solution to Britain’s exit from the European Union, surely someone will have to pick it up.

Today’s Must-Reads

Brexit in Brief

On the Markets | The pound took this all in its stride, rising slightly through the evening’s drama and reaching $1.21 early this morning. However, the bounce from Tuesday’s lows will probably be short-lived while a no-deal Brexit remains the default setting, says Bloomberg’s Richard Jones.

Remember Prorogation? | A Scottish judge will rule today on the legality of Johnson’s decision last week to prorogue — or shut down — Parliament from the middle of September. Judge Raymond Doherty’s ruling in Edinburgh will be the first verdict, while similar cases are underway in Belfast and London. The U.K. Supreme Court is poised to hear any appeals later in the month.

Javid’s Debut | There is another key piece of business on the agenda for today, but Chancellor of the Exchequer Sajid Javid is struggling to make himself heard over the din. Javid is due to stand up in the House of Commons today to announce an eye-catching £2 billion in extra funding for delivering Brexit, as well as a slew of other spending priorities, in his first major speech as Britain’s finance minister. 

Safe Hands? | The fiscal plans with which Labour fought the 2017 election are likely to be more growth-friendly than the Conservatives’ plans, according to Bloomberg Economics. BE thinks the impact of investment spending is about three times bigger than tax cuts for the wealthy.

Brexit Bulletin: The Rebels Strike Back

Tourism Troubles | Brexit has hasn’t made Britain a more attractive place to visit. According to the World Economic Forum’s tourism rankings, released today, the U.K. actually fell from fifth to sixth most competitive nation for travel this year. Among the top 10 countries, it was the only nation to drop in the rankings, overtaken by the U.S.

Laid Back | The big talking point on social media as last night’s proceedings came to a close was not the detail of the proposed legislation, but the posture of Jacob Rees-Mogg, arch-Brexiteer and now Boris Johnson’s point man in the House of Commons. His laid-back attitude provoked the ire of Labour MP Anna Turley, whose tweet might just have gone a bit more viral than any other part of the debate.

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