Last week, the Minister of European Affairs of France, Nathalie Loiseau, publicly joked that she called her cat by the name of "Brexit" because she constantly asked to go outside but when she opened the door, she refused to go out. This allegory very accurately describes the behavior of the British Parliament, which managed to reject all eight legislative initiatives just yesterday and designated the options for the development of further events. Although it was an indicative vote, the results of which are not binding. The results made it possible to understand what moods are ruling among British parliamentarians.
If we place all 8 proposed projects on a kind of "hardness scale" then we can conclude that the House of Commons has softened its position in many ways regarding further relations with the European Union. For example, the variant "J" scored as much as 264 votes, which according to Britain has to create a customs union with the EU after Brexit. About 272 deputies voted against it, hence, the odds turned out to be minimal. We also considered the "D" option, which included the "Common Market 2.0" option, in which the UK would remain in the European Economic Area and agree with the EU on a temporary customs union. This is valid until an alternative is found and supported by 188 deputies.
Another option is "M", which suggested holding a repeated referendum on the country's withdrawal from the EU. This initiative was supported by 268 parliamentarians while 295 were against it. Previously, such ideas were categorically rejected by the House of Commons with a larger margin of votes. It is difficult to say exactly which factors changed the position of the deputies either because of the numerous protests of the British or the fear of the chaotic Brexit, who acquired real traits and a real date.
However, if we compare the results of voting on the above proposals with tougher initiatives, the difference in the level of support is obvious. For example, only 160 deputies voted for the option under the letter "B", which supposes withdrawal from the EU without entering into any agreement while 400 parliamentarians voted against this idea at once.
All other proposed options such as "O" "L" "K" and "H" has repeated the essence of the above scenarios to some extent. For example, holding a referendum on any of the options for an agreement with Brussels and none of them found to be supported by the hall of the House of Commons. Such an "entertaining alphabet of Brexit" says that the deputies are ready to consider one remaining option which is to the draft government deal. According to the information of British journalists, many conservatives, who previously voted against the agreement have reconsidered their point of view after realizing that there is no alternative. The results of yesterday can only strengthen this opinion because the choice was not great by and large where either the parliament approves the deal or the country will leave the EU on 12 April that is if deputies want it or not. Brussels set its time frame and London is forced to reckon with them. Brussels set its time frame while London is forced to reckon with them.
Another factor of a more mercenary nature may also affect the determination of "doubting" conservatives. The fact is that Theresa May promised yesterday her party members to resign this summer if the House of Commons supports her draft deal. This statement by the prime minister increases the chances of approval of the agreement, especially in the light of the results of indicative votes. In addition, conservatives need to take into account the fact that among the British there is ripening dissatisfaction with the actions of the current government, which is reflected in the overall Tory political rating. Therefore, the approval of the transaction and the reboot of the cabinet will relieve the general tension in society and reduce the degree of discontent.
The press has already called the possible successors to May, namely Jeremy Hunt (the current foreign minister), Michael Gove (the minister of the environment) and David Lidington (the head of the government secretariat). All of them have a rather soft position in the context of further relations with Brussels, thus their appointment will be positively perceived by the British currency. However, a possible victory for Boris Johnson, who is also a favorite of the political race, will be an unpleasant surprise for GBP/USD traders. He is the most zealous and consistent supporter of the tough Brexit and at the same time, his opponent is May. This is the most undesirable candidate for supporters of maintaining close business contacts with the European Union, thus, his arrival will have a strong downward pressure on the pound.
However, it's still too early to talk about potential candidates. On order for May to keep her word, the conservatives need to rally themselves first and then convince 10 more deputies (from among unionists or other political forces) to support the long-suffering deal. In addition, the deputies need to convince the Speaker of the House of Commons to put the agreement to a vote. Hypothetically, this is possible, but for this, the parliamentary majority must be "under the banner" of Theresa May. Are the deputies ready to take such a step? We will know in the near future.
