This was supposed to be a fallow year, between the World Cup and the Euros. But we love the drama of a knockout tournament, so we should not be surprised that this might be the format chosen by MPs to break the Brexit impasse.
We are in uncharted territory here. MPs this week finally lost patience with the Government’s handling of the Brexit process and took matters into their own hands. A motion to take control of the parliamentary agenda, in order to stage a series of ‘indicative votes’ on the possible routes out of (or back into) the EU, was passed by a comfortable margin.
The Prime Minister, unsurprisingly, warns that this sets a dangerous precedent, but so weak is her position today that she has been forced to go along with MPs’ wishes. The votes will not be binding on the Government but, equally, it is hard to see that it can ignore their conclusions.
Where the football analogy comes in is the way the votes could be structured. What seems likely is that, later today, MPs will vote on as many as eight different Brexit options. They will say either yes or no to each and will be able to express a view on any or all of them.
That means that today’s vote has the feel of the group stages of a football tournament, where every team plays every other and we find out which teams will compete in the next, knockout stage of the competition.
The playoffs or knockout rounds (to continue the analogy) are due to happen next Monday (yes, April 1!), after a possible diversion on Thursday or Friday when the Prime Minister may (or may not) decide to have one more go at getting her withdrawal approved by a majority of MPs.
Finally, the final will be played next Wednesday when, hopefully, parliament will have whittled down the eight starters to vote on just one option on which there is at least an acceptable degree of agreement (let’s be realistic).
So, what are the options on which MPs will be voting:
- No deal. The preferred option for hard Brexiteers who hate the Northern Ireland backstop and want Britain to be free to pursue our own trade deals.
- A Canada-style free trade deal. Also favoured by Eurosceptics but viewed by most others as too damaging to the economy.
- Mrs May’s withdrawal deal. This has the merit of having been agreed with the EU, but it has already been voted down twice. Might squeak through if enough MPs worry that it’s this or no Brexit.
- Mrs May plus a customs union. Less economically damaging but critics will say: what’s the point of leaving if we are still locked in but with no say on EU policy.
- Labour’s plan. This is Mrs May but with a customs union tacked on and a vague ‘strong relationship’ with the single market. Again, staying in might look better than this fudge.
- Common Market 2.0, aka Norway Plus. This is full economic membership (customs union and single market) without the political union stuff that Britain has never really liked.
- Second Referendum. This could actually happen outside the ‘indicative votes’ by being attached as a ‘confirmatory vote’ to one of the other options.
- Revoking Article 50 and staying in. The nuclear option.
Perhaps it was inevitable that in our post-truth, reality-TV age we should end up deciding the future of our country’s relationship with the rest of Europe in this way. It’s the gamification of politics.
So, it’s going to be dramatic for some. Compelling theatre if you find this kind of thing fascinating - if not, you have probably switched off already.
Should we care, as investors? Finally, I think we probably should. After watching from a bemused distance so far, markets may well get more interested as we approach the final in a week’s time. The pound and stock market here in the UK have been in a holding pattern but they may well break out of their ranges when it becomes clearer what sort of Brexit, if any, we end up with.
There is talk of the pound falling as low as $1.15 or rising to perhaps $1.45. That would have a significant impact on shares, especially in the FTSE 100 where overseas earnings are so important.
Meanwhile, the end of the tax year is fast approaching. Next Friday, April 5, will see the expiry of this year’s ISA investment allowance. We can all put up to £20,000 into an ISA and enjoy largely tax-free growth and income on our investments.
The good news is that you can either invest that straight away in shares or funds or, if you want to see how things pan out in Parliament, leave it in cash until the dust settles.
But if you miss the deadline you won’t be able to wind the clock back. It’s use it or lose it.
Find out Tom Stevenson’s ISA Picks for 2019
More on Stocks and Shares ISAs
Tom Stevenson will be speaking at the Master Investor Show on 6 April 2019.
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The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.