UK Parliament's vote on Brexit: analysis by Partner Charles Brasted and Associate Andrew Eaton at Hogan Lovells

With only 72 days remaining until the UK automatically ceases to be a member of the EU, the UK Parliament has emphatically rejected the Withdrawal Agreement and Political Declaration painstakingly negotiated by the UK Government over the past 20 months since triggering Article 50 in March 2017.

Unless and until politicians act collectively to take another path, the default destination is one that a clear majority in the UK Parliament do not want – a no-deal Brexit.     

That must be the single most likely outcome today, but it is unlikely to lead the race to the finish line.  This decisive vote has delivered no certainty.     

What happens next?

As the Prime Minister noted in her remarks immediately after yesterday's vote, Parliament has made clear what it is against, but a majority in favour of anything remains elusive.  It must now find a positive resolution to Brexit that can win parliamentary support across the various political factions.  

Before it does so, however, Parliament will hold a vote of no confidence in the Government this evening.  At present, the Government is odds on to win the vote with the backing of the Democratic Unionist Party, despite the DUP having just yesterday unanimously voted against the Government's Brexit deal.  

Assuming her Government continues to command the confidence of Parliament after tonight's vote, the Prime Minister looks set to spend the weekend reaching out to her Parliamentary colleagues and turning (again) to her EU counterparts in the hope of obtaining last-minute concessions that would allow her to put her deal back to the Commons for a second meaningful vote.  Judging on past events, this appears doomed to fail, in which case she must present to a mutinous House of Commons on Monday a proposal for an alternative way out of the current impasse.  

In the absence of a material change in circumstances or in the present mood in Parliament, we can expect the various political factions that have begun to manifest on all sides of the House of Commons to exert considerable pressure on the Government by seeking to amend the Prime Minister's proposed motion.  This could be the moment when Parliament truly takes control of the direction of Brexit and issues a political directive to the Government.  This could see Theresa May become the agent of a resurgent legislature; her position at the head of the Government confirmed, but her authority to lead it subject to the will of Parliament.

With Parliament unwilling to unseat the Prime Minister but also unwilling to back her Brexit plan, the only way forward would be for it to indicate an outcome that it would be willing to support.  No doubt many will support amendments to the Prime Minister's motion on Monday that rule out a no-deal outcome and/or call for an extension of the Article 50 period.  However, such gestures cannot and will not change the inescapable fact that unless and until Parliament votes positively in favour of either a Brexit deal (which, given the EU's position, is likely largely to resemble the Withdrawal Agreement Parliament has already rejected) or cancelling Brexit altogether, the default outcome – which will take effect automatically at 11pm on 29 March 2019 – is that the UK will leave the EU without a deal.

What is the risk of a no-deal Brexit?

The risk of a no-deal Brexit will remain unless and until a deal is finally reached, or Brexit is cancelled altogether.  Neither outcome looks close today, and the countdown to 29 March is ticking.  Across Europe, businesses and governments alike will need now to redouble their preparations for an imminent no-deal Brexit. 

Any proposed deal, whether the Prime Minister's deal or any alternative deal, must be agreed with the EU and must still pass the meaningful vote in the UK Parliament.  However, this would only be the beginning, as the proposed deal would also need to be implemented into UK law via an implementing Act of Parliament.  Such an implementing Act would no doubt be a controversial and technical piece of legislation and could take months to pass.  

Even before yesterday's vote, many in Whitehall were reportedly already concerned there was no longer enough time to pass as Act implementing the Prime Minister's deal before 29 March.  Following yesterday's events, it would seem next to impossible for such an Act now to be passed before 29 March 2019, suggesting an extension of Article 50 may be essential to avoiding an inadvertent no-deal Brexit.  

That being the case, and in the absence of an indication that the UK will seek to extend the Article 50 period, the chances of a disorderly, no-deal Brexit increase by the day.

What are the chances of a General Election or second referendum?

If Jeremy Corbyn's vote of no confidence is passed this evening – which at this stage looks unlikely in light of the Democratic Unionist Party's support for the Prime Minister – under the Fixed Term Parliaments Act 2011, a General Election will be triggered if another Government that commands the confidence of the House of Commons cannot be formed within 14 days.  If the vote is not passed, any MP is free to call another vote whenever they choose, although it is at the discretion of the Government whether to allow time for a subsequent vote to take place, based on the sentiment in Parliament at the time.  

In the absence of a successful vote of no confidence in the Government, according to the Fixed Terms Parliament Act, the only other way to trigger an early General Election would be for the House of Commons to vote by a two-thirds majority in favour of a General Election.  

Any General Election would legally require a minimum of five weeks to allow sufficient time for a lawful campaign and ballot to be conducted.  

Holding a second referendum on the UK’s withdrawal from the European Union would require an Act of Parliament to establish the basis for and terms of a referendum campaign and to set the question to be put to voters.  Both the Government and the Jeremy Corbyn are presently against holding a second referendum, and it is far from clear whether such a course of action could command the necessary majority in the House of Commons to pass such legislation.  Therefore, as things stand, the chances of a People's Vote remain slim, although could increase as events unfold over the coming days. 

On any view, it is extremely unlikely either a General Election or a second referendum could be held in time without an extension to the Article 50 period.  Such an extension would require a unanimous vote of the EU27 and the UK at a European Council summit.  Reports suggest that the EU is considering acceding to a request by the UK for a time-limited extension until June 2019, should such a request be forthcoming in these circumstances. 

What does this mean for businesses?

The urgent certainty that most businesses require has not been delivered.  The terms of the relationship between the UK and the EU, this year and in the future, are in more doubt than since Theresa May's Lancaster House speech.  

Many businesses have already had no choice but to put in place, and execute, their contingency plans.  For those still needing to do so, efforts will now redouble.  

At the same time, Parliament has thrown all of the cards in the air once more and no doubt some will see that opportunity to press for changes to both the transition deal and the framework for the future relationship.  A range of options that had been taken off the table may now be back, including EEA membership and so-called Norway plus, including a continuing customs union.  


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