Europe Politics

Theresa May's Brexit deal is rejected again: Here's what happens next

Key Points
  • The route forward is still uncertain but May has already promised two more votes for the U.K. Parliament.
  • On Wednesday and Thursday, respectively, lawmakers will likely get to vote on whether the U.K. should leave the 28-member bloc with no deal, or should request a delay to its departure, which is currently scheduled for March 29.
Parliament continues to debate Brexit as March 29th deadline nears

The Brexit process could see yet more twists and turn this week following another defeat of Prime Minister Theresa May's withdrawal deal.

U.K. lawmakers rejected the deal again on Tuesday evening by 149 votes, despite some last-minute assurances from the EU which May had achieved in Strasbourg earlier in the week.

The route forward is still extremely uncertain but May has already promised two more votes for the U.K. Parliament. On Wednesday and Thursday, respectively, lawmakers will get to vote on whether the U.K. should leave the 28-member bloc with no deal, or should request a delay to its departure — which is currently scheduled for March 29.

May confirmed that these votes would go ahead just seconds after her deal was overwhelmingly rejected for a second time.

No-deal vote

The first vote on a no-deal scenario — where the U.K. crashes out of the bloc and has to rely on WTO trading rules — is highly likely to be rejected by politicians. However, it's not concrete and there's still a possibility the U.K. could leave without a deal, even if they vote against it.

May said after her loss Tuesday that a "no deal" remains the default unless a withdrawal agreement is ratified. Meanwhile, a spokesman for European Council President Donald Tusk said that the second rejection had "significantly increased" the risk of a damaging "no-deal" divorce, according to Reuters.

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"We regret the outcome of tonight's vote," the spokesman said. "On the EU side, we have done all that is possible to reach an agreement ... Should there be a U.K. reasoned request for an extension, the EU27 will consider it and decide by unanimity," he added.

Wednesday's vote will take place at 7:00 p.m. London time and this will be a "free vote" with the government not urging its politicians to keep no deal on the table.

A vote to delay

If Wednesday's vote is rejected, lawmakers will vote Thursday evening on whether they want an extension to Article 50 — which is the formal two-year process governing Britain's departure from the European Union.

With only 17 days left until the Brexit deadline, it's possible that lawmakers could back this, although pro-Brexit MPs (Members of Parliament) worry that this could lead to a second referendum or no Brexit at all.

An extension to Article 50 also opens up the possibility of another general election in the U.K. if May, perhaps understandably, grows weary of the political stalemate in Westminster.

However, the government hasn't confirmed that it will introduce the legislation necessary to make an Article 50 extension a reality, nor has it given any details about the potential length of an extension.

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'These are unenviable choices'

The U.K. leader sent a warning to lawmakers on Tuesday evening saying that voting against leaving without a deal and for an extension still doesn't solve the problem of Brexit.

"The EU will want to know what use we mean to make of such an extension," a hoarse-voiced May told lawmakers.

"This House (of Commons) will have to answer that question. Does it wish to revoke Article 50? Does it want to hold a second referendum? Or does it want to leave with a deal but not this deal?"

"These are unenviable choices, but thanks to the decision the House has made this evening they must now be faced," she concluded.

Snap election?

With just over two weeks left until the official departure date, investors and the wider public are still in the dark over what Brexit will look like. A research team at Citi said the defeat had dealt a further blow to the chances of an orderly Brexit under May.

"An extension of Article 50 is now almost certain but crucially, Parliament (and the EU) will want to know the purpose. Further negotiations with the EU are unlikely to bring a break-through, so a snap election and further Brexit delays are becoming ever more likely," the analysts said in a research note.

UK parliament defeats May's Brexit proposal again

The Citi analysts added that the ruling Conservative Party currently lead in the polls, which could tempt May to go down the route of a snap election.

"If she does, she could make an announcement before Thursday's vote on A50 extension, allowing Parliament to debate the necessary length. Importantly, an election widens the array of potential outcomes to include a hard anti-EU leadership or a left-wing Labour government under Jeremy Corbyn and thus amplifies uncertainty," they said.