UK Prime Minister Theresa May has now suffered three humiliating defeats on her Brexit plan in the House of Commons. The PM had vowed to step aside and let someone else lead the next stage of negotiations if her political opponents agreed to pass her deal – but even this wasn’t enough to secure the support she needed.
With her leadership under intense scrutiny – and the future of the nation on a knife edge, it pays to look back at why the country made it to the current impasse.
When did it all go wrong?
A timeline of events from trading experts Daily FX looks back at the period of negotiations in 2017 and 2018, when May and her team forged the Brexit deal with her EU counterparts.
Two dates in particular proved influential and laid the foundations for the crisis today.
The first came in January 2017 – just before May invoked Article 50 of the Lisbon Treaty and fired the starting gun on a two-year period of negotiations – in a set piece speech at Lancaster House.
It was in this speech that May set out her negotiation ‘red lines’ – vowing to take the UK out of the single market and customs union while still avoiding a hard border between the Republic of Ireland and Northern Ireland. She also warned that ‘no deal was better than a bad deal’. All of this led directly to the deal that cannot be forced through the Commons – and empowered hardline colleagues to stick to ‘no deal’ as a backup plan.
Writing for politics.co.uk, Jonathan Lis explained that this squandered the chance to draw a line under the division of the referendum debate.
After Lancaster House, GBPUSD traded in a 3.6% weekly range (low-to-high), and the FTSE 100 dropped 2.90% in a week.
The second big moment came in April 2017, when Theresa May decided to call a snap General Election. The move was intended to strengthen the PM’s hand in her negotiations and give her an unassailable majority in the Commons.
However, a disastrous election campaign saw this move backfire massively and rather than increase her majority she lost it and was forced to do a deal with the Northern Irish DUP to stitch together a government.
GBPUSD traded in a 3.12% weekly range (low-to-high) and the FTSE 100 fell 3.64% in a week. Most tellingly, however, losing her majority has made it especially tough to pass anything through the Commons – a situation she’ll be left to rue now with every defeat that has followed (she’s actually suffered 17 Commons defeats in total).
PM’s mistakes
While the fault for the Brexit crisis doesn’t solely lie with Theresa May, her Lancaster House speech and snap election did lay the foundations for the issues we’re seeing now. Both are indicative of the limitations of her leadership.
As the New Statesman noted: “Rather than healing the divisions created by the Brexit referendum, Mrs May exacerbated them. Her refusal to guarantee EU citizens’ rights cast the UK as a callous state and created needless anxiety. Like her predecessor Mr Cameron, Mrs May pandered to her party’s hard right, rather than confronting it. “No deal is better than a bad deal,” she declared in her Lancaster House speech in January 2017, thus legitimising a destructive course that she never favoured. She also ignored the interests of Remain-voting Scotland.”
