UK: Parliament to trigger Article 50 - ING

James Knightley, Senior Economist at ING, notes that the British Supreme Court has ruled against the government by an 8-3 margin meaning that triggering Article 50 requires a vote in parliament – the government had been arguing that the so called “royal prerogative” meant that a parliamentary vote was not required.

Key Quotes

“This means we now expect votes in both the House of Commons and the House of Lords. However, given that MPs from both sides have said that they will “respect the will of the people” the government bill should pass. We presume the government will make the bill as simple as possible with no option on giving parliament a say on the strategy.”

“Nonetheless there will be notable opposition from Scottish Nationalist, Liberal Democrat and Northern Ireland MPs. There is also likely to be opposition from Labour MPs disgruntled with their leadership (and with constituencies in pro-EU areas) as well as a handful of Conservative MPs. It might be trickier to pass in the House of Lords, but again there has been a general sense that the result of the referendum needs to be respected. This should still mean the UK triggers Article 50 by the end of March.”

“On a positive note for the government the Supreme Court didn’t rule that in addition to a parliamentary vote, the government would require approval/consultation in the devolved parliaments of Scotland, Northern Ireland and Wales. Given Scotland and Northern Ireland backed staying in the EU this would have potentially led to significant delays, notwithstanding the fact that new Northern Ireland elections are scheduled for March 2nd.”

“Today’s verdict does not affect the outcome of the final UK-EU deal, which we assume would happen in early 2019. The Prime Minister has already said that the UK parliament will get a vote on the final deal, but given the government’s (current) position it won’t change the outcome – the UK is still leaving the EU. If parliament approves the agreed deal then it goes through. If it doesn’t then the UK would have to operate under WTO rules.”

“Finally, the government is still at risk of further legal challenges. For example there is a challenge as to whether the UK also needs an act of parliament to leave the European Economic Area in addition to triggering Article 50. Once again, this would be a delay rather than a block on Brexit.”