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For an undemocratic wasteland, Britain sure is doing a hell of a lot of voting these days.
Today, MPs are going to vote on whether or not to ban prime minister Boris Johnson from pursuing any path that might lead to “no deal” Brexit.
If they win that vote, then Johnson says we’ll have a general election on 14 October.
That’d be the third time that Brexit has been put to the people in less than four years (if you include the last general election, which doesn’t seem an unreasonable thing to do).
I mean, it’s almost as though people who talk about “coups” and “despots” are really just terribly annoyed that someone else might have a different opinion to them.
Parliament splits into two tribes
So what are the latest parliamentary shenanigans that could send us all traipsing to the polls again before Halloween?
The MPs are all back at the office today. As it has been for the last three years or so, Brexit is the only thing on their minds. Every MP probably has a slightly different take on exactly which variety of Brexit they’d prefer, ranging from “none at all” to “let’s leave tomorrow”.
But today, they split into two camps.
There are the ones who back Boris Johnson line, which is: “We’re leaving on 31 October. Hopefully we can get a deal before then. But if we can’t, we’re still leaving.”
And there are the ones who take a different view, which is: “We will not leave the EU under any circumstances without some sort of deal in place.”
Now, anyone with a basic grasp of negotiating anything at all realises that only one of these positions is tenable. You don’t even have to get into debates about the relative strength of the two parties – this is not about who has the upper hand.
For example, you might have a poor case or a great case for getting a raise from your boss. But either way, if you go into her office and say: “Look I’d like more money, but if you tell me to sling my hook, then I just want you to know that I desperately need this job, I have a huge mortgage, and despite my best efforts, the headhunters are ignoring all my calls”, then any chance of a deal turns into no chance at all, regardless of the merits of your request.
It looks like we’re heading for another election
So here’s the plan so far: the “rebel MPs” have put together a bill that would force the prime minister to ask for an extension to Article 50 to 31 January next year. If the EU agrees or asks for a different date, the prime minister has to accept within two days.
To get the bill through Parliament today, the rebels have to take control of the parliamentary agenda. The speaker, John Bercow, is almost certain to allow this. A vote will then be held. If the bill gets through, it’ll be raced through Parliament and the House of Lords, and it’ll be law before Parliament is prorogued on Monday.
In short, if they win, then they can stop a no-deal Brexit on 31 October, assuming of course, that the EU does not by now simply want to be rid of us (and I don’t think it does). We re-enter purgatory with no clear end goal beyond boring everyone into giving up and remaining.
For his part, Johnson has said that if the rebels win, then he’s going to call a general election – because he has no intentions of re-entering purgatory.
Of course, if he calls an election, that requires two-thirds of MPs to back the call. But it would be tough for MPs to justify denying the country the right to go to the polls, given that Labour has been calling for an election and Remainers have been calling for a second referendum.
So what’s going to happen? Of course we don’t know. But the person I currently trust most on election calls is Helen Thomas over at Blonde Money, who has been one of the few analysts to argue consistently that “no deal” has been a much more likely outcome than markets ever believed.
Her take is that the government is likely to lose the vote on the extension today by a slim margin. Johnson will then call an election for 14 October.
Judging by current polling, he’ll quite possibly win that. Of course, as we found out in the 2017 election, there’s many a slip twixt cup and lip (that was meant to be a landslide for Theresa May, after all).
But then, the 2017 election should go down in history as being the absolute worst campaign run by a standing government in the entirety of British history, so it might be a special circumstance.
The pound certainly doesn’t like the idea of more political turmoil. And it’s clear for now that the pound reacts to the likelihood of a no-deal Brexit by going down. If markets believed that all of this was going to make Brexit less likely, it’s hard to see why sterling has fallen so hard. (Then again, it could be latent fear of a general election leading to a Jeremy Corbyn-led government.)
What does it all mean for you? Pretty much the same as I said last week – build a watchlist of companies you’d like to buy in a panic. Don’t play guessing games with the pound (I’d always advise readers against messing about with currency trading, but sterling will be particularly unpredictable given all the potential for surprise political announcements). Own some gold. And stick with your plan.
We’ll have a lot more on the ins and outs of the UK’s political outlook in MoneyWeek magazine over the next couple of months – now is a great time to subscribe if you haven’t already (you can get 12 issues for just £12!).