Within minutes of the humongous defeat — involving the biggest margin by which a British government has lost a parliamentary vote in modern history — economic analysts began putting out notes assessing the situation, many with a positive spin. One suggested that the magnitude of the defeat meant that it was less likely that the UK would leave the EU without a deal (a situation widely considered to be catastrophic for the British economy and its investment prospects) because Parliament could take greater control of the process now and ensure that didn’t happen.

Others saw the extension of the Article 50 process (by which the UK triggered Brexit and would see it leave the EU at 11 pm on March 29) as almost inevitable. The almost complacent assessments widely made in financial circles meant that despite the British government suffering the most humiliating upset ever seen in the Houses of Parliament, the market reaction — both by stocks and the pound — was rather unremarkable.

Their assessment contrasted with that of Steve Eisman (the investor who gained fame for his bets against subprime mortgage products ahead of the crisis, and who featured in Michael Lewis’ The Big Short ). Speaking to the BBC earlier this week about the sentiment, he ridiculed the complacency in the market. “People generally underestimate the risk of things when they find it so horrifying,” he posited as an explanation for the market complacency. “There isn’t anybody in this country who has a clue what is going to happen — not one person….”

Eisman’s assessment has grim accuracy to it. With less than 75 days till Britain is set to leave the EU, the way in which it will do so is as unpredictable as ever — and with no position commanding a majority, the risk of the default crash out is high. In Britain, the public, Parliament, the cabinet and even the opposition Labour party remain thoroughly divided on the next steps ahead while even Europe is divided on the extent to which it is willing to compromise further on what has already been agreed.


While European leaders have indicated their willingness to engage with Britain again, there is growing irritation with Britain’s inability to agree about what it wants, and the tendency among some to blame Europe. The onus was on Westminster to decide what it wanted, Irish Taoiseach Leo Varadkar insisted, while in a meeting of mayors in France, President Emmanuel Macron ridiculed the notion that it wasn’t Britain that would suffer the most from a no-deal scenario.

The EU countries set to be most affected by Brexit are swiftly ramping up their preparations for a no-deal Brexit — moving mere plans into implementable programmes.

There had been little doubt that Theresa May would win Wednesday’s no-confidence vote called by the Labour Party — the gamble with an election in 2017 had proved disastrous for her party, while the Democratic Unionist Party of Northern Ireland whose support is crucial for the government will never again have as much influence as they do now. While this means that her government is likely to hold on even if Labour were to call for no-confidence vote after no-confidence vote, the permutations going forward are numerous.

It is notable that while Theresa May has called for cross-party working and dialogue in a “constructive spirit” to thrash out a solution, she has firmly declined to give the reassurance that she would take a no-deal Brexit scenario off the table which Labour leader Jeremy Corbyn has made a prerequisite for engaging with her.

Even the political parties that did attend the meeting following the no-confidence vote came out of it unimpressed with the process, and with little doubt that May’s contention that “everything” was on the table in cross-party talks was simply not the case. “PM’s offer of talks is a promise to listen but only if we all agree with her,” remarked Nicola Sturgeon, the leader of the Scottish National Party who said her party would not be complicit in any more time wasting.

However, the sad truth is that there is little agreement within opposition parties too. The Democratic Unionist Party of Northern Ireland is backing the government’s strategy of maintaining the threat of a no-deal exit to extract more concessions from Europe (including a willingness to remove the controversial Northern Ireland backstop that the DUP and hard Brexiteers so detest). In fact they’re pushing for her to ramp up her demonstration of no-Brexit preparedness.

The Labour party on the other hand won’t join the others including the Liberal Democrats, the SNP and the Greens in calling for a second referendum, insisting that for now at least the right strategy is to continue its push for a new general election through repeat no-confidence motions.

Labour lost the last no-confidence vote it called in the government but only by a margin of 16 and they will be hoping that some Conservative MPs who don’t support May’s Brexit strategy but are fearful of those in the party dragging the country towards a no-deal Brexit could reluctantly change their mind and support him next time round.

This is of course a big gamble: many of them thoroughly dislike Corbyn over issues completely unrelated to Brexit, with one — Anna Soubry, a prominent advocate of a second referendum — describing him as the most “hopeless” opposition leader Britain has ever seen.

Unlikely alliances

This has also reflected the topsy-turvy nature of British politics — unlikely alliances have been forged, whiles foes exist within party ranks. It’s notable that when Theresa May’s deal was defeated on Tuesday night both supporters of a second referendum and “Leave” supporters who had gathered outside Parliament cheered as though they had scored a major victory.

Some Labour MPs used the no-confidence debate — intended to focus on government policy — to question Labour’s own approach and push a second referendum. “If he vacillates and sits on the fence he is going to get splinters on places he wants,” David Lammy, a prominent Labour MP told the BBC this week. With pretty much everything up in the air and all options up for grabs, complacency that things will inevitably work themselves out, is perhaps the riskiest approach of all.

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