The Shifting Sand of Brexit: movements of the past 7 days

The Shifting Sand of Brexit: movements of the past 7 days

The new Brexit countdown clock has now begun after the last one expired on October 31 with little disruption.

January 31 is 85 days and counting away; inside these 85 days is a general election, a swearing-in ceremony, a sitting of Parliament and a final vote on the withdrawal agreement which has to pass both floors of the House before Britain can leave the EU.

Tick-tock on the Brexit clock.

The Election will now dominate all Brexit debate and already both sides are using Brexit as a platform to further their political ambitions.

Thus, over the coming week, we will highlight each sides policy and its intended course for Brexit. This week we look at Labour. But first, the election campaign kicked off with a new speaker to keep order in Parliament’s House of Commons, with Lindsay Hoyle promising to be an antidote to his divisive predecessor.

Brexit: Where we are this week

  • Sir Lindsay Hoyle was voted in as the new Speaker of the House after the enigmatic John Bercow’s 10-year tenure came to a close at the last Brexit deadline (October 31). Hoyle campaigned on the promise of ‘healing divisions’ in the lower house.

Interestingly Sir Lindsay has never revealed which way he voted on Brexit, the assumption is he may have voted for Remain being a lifelong Labour stalwart but this is steering speculation.

Why his appointment and Brexit views are so important is the Speaker will be crucial if the general election produces a Hung Parliament.

He has already stated he wants to take the ‘nastiness out of politics’ (good luck with that) and considering how Bercow steered the agenda on the floor in later years Hoyle’s influence will be crucial to Brexit’s passing.

He is officially a new ‘player’ in the game.

  • Staying with ’Labour’ the election is already starting to find Jeremy Corbyn‘s leadership out as the divided party develop new fissures down Brexit, social and economic lines. If you haven’t already read up on ‘Momentum’.

This has led him to make a rather strange policy move considering the timeline in place around Brexit,

Labour’s election policy for Brexit is to:
  • Renegotiate the deal with the European Union
  • Then, put this ‘Brexit’ Leave deal to another referendum, with Remain as the other option.

Yes, Labour is campaigning on a second referendum the choice being a Labour negotiated Leave and a Remain vote that would override the July 2016 vote (constitutionally tricky and there is no way of knowing how the EU would see this).

It isn’t clear is how the Labour party would proceed if the referendum voted Leave again, something it would have to deal with on the fly.

This policy stance saw his first major speech of the election frame Brexit as:

… ‘a plot by hard-right Conservatives to revive the policies of Margaret Thatcher’

and to:

… ‘leave the National Health Service at the mercy of President Donald Trump’

This message will play well to his base, but it’s hard seeing this strategy winning over Left-leaning Brexit voters or right-leaning Remain voters which he needs to take enough seats on polling day.

What it shows is how much influence ‘Momentum’ has on the party and its agenda. Momentum’s core beliefs look to be a core pillar of Labour’s policy agenda this election. It is a major concern of the market and particularly the GBP.

  • However, Corbyn isn’t the only candidate running on a ‘second referendum’ policy agenda, Liberal Democrats are as well. The Lib Dems are too small to form government in their own right so a coalition will be needed. The catch for Corbyn he too is unlikely he will form a majority and thus will need to form a rainbow coalition. Which will be made all the more difficult with his current policy stance. The Lib Dems have already spelt that out with their leader Jo Swinson, explicitly ruled a coalition with Labour stating that she ‘couldn't trust her counterpart on Brexit’ due to his almost nonchalant view on Brexit.

In better news for Corbyn the Scottish National Party (SNP), resolutely opposed Brexit implied it could support a Corbyn-led government if Brexit off the table. This would be an amazing ‘unification’ as the SNP is the biggest political foe of Labour in the northernmost nation of the British Isles. It would be a nervy collation indeed if this was to form.

In short, Labour has a rather large mountain to climb to achieve government and the impact a Labour-led government could have on the market would be great. However, as geopolitics has shown over the past 5 years anything is possible and therefore one must factor the possibility into ones trading thematic.

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