UK government first defeat to delay Brexit process? - Natixis

Sylwia Hubar, Research Analyst at Natixis, notes that yesterday the UK government faced its first defeat in the unelected House of Lords on the issue of protecting the rights of EU nationals and analysts at Natixis think that the battle between the two houses of Parliament is unlikely to derail the Brexit timetable.

Key Quotes

“Two amendments were voted on during the Committee stage:

1/ No defeat: Single Market membership after Brexit: House of Lords voted against an amendment demanding the UK to stay in EU single market (defeated by a majority of 163) 

2/ Defeat: Protection of the rights of EU citizens living in the UK: House of Lords voted in favor of an amendment demanding protection for EU nationals living in the UK (won by a majority of 102)

The defeat means the amendment will be passed back to the House of Commons for approval on March 13 and thus the Bill will enter a socalled Ping-Pong between the two houses (until both houses agree on the final wording of the bill).”

“What happens next?

The bill will move to the Report stage and third reading on March 7 for further examination. Further changes are still possible to be suggested and voted on. Among the amendments due to be considered next week are:

3/ Parliamentary veto on the final Brexit deal; 4/ Collaboration with the devolved administrations; 5/ Protection of Northern Ireland citizens’ rights; 6/ Second referendum on the deal; 7/ Requirement to make regular updates on Brexit process; 8/ Approval from Scotland to trigger the Article 50; 9/ Nuclear collaboration with the EU’s atomic energy organization Euratom after Brexit.”

“What should be expected?

• The government does not have a built-in majority in the Parliament's upper house. Therefore, additional amendments to the Article 50 legislation, including the veto on the final deal, cannot be ruled out. 
• May wants to trigger Article 50 of the EU treaty by the end of March, which despite the defeat in the House of Lords, is still feasible. We think that the battle between the two houses of Parliament is unlikely to derail the Brexit timetable, especially as all amendments backed by the Lords can be easily removed from the bill when the legislation returns back to the Commons. The Prime minister and pro-Brexit MPs will seek to overturn parliamentary defeat on Brexit.”