In order of the time of their resignation:
- They’re all on the more Brexiteer side of our spectrum but they’re certainly not all raving ideologues – for comparison JRM is +15, Gove +11
- They’re from a mixture of seats that voted to Leave and to Remain – and the Leave seats are not as strongly in support of Leave as, for example, some Labour-held seats in the North
- They all have solid majorities – suggesting that might be less of a motivating factor for how MPs ultimately decide to vote
- They gave a mixture of reasons, but most common thread is defending the Union – so it’s not just the DUP that have been lost with the special rules for Northern Ireland, but members of what is, after all, technically known as the Conservative and Unionist Party
So this can’t be written off as just a bunch of loony Brexiteers throwing their toys out of the pram. It might just be that MPs have decided to vote on their principles – with half an eye of course on whether they want to be tainted with a deal they feel they can’t sell. This implies the Parliamentary Vote will be even more difficult to win than we thought.
Losing the Brexit Secretary is astonishing. Two have now been lost when the two decision points in the negotiations have been reached. They have both been Brexiteers. If Michael Gove takes up the post (unclear at time of writing), can he be the Brexiteer to bridge the Remainer divide?
It’s rumoured he hasn’t yet taken the job because he wants free rein to renegotiate it. If he gets that mandate, manages to change course (or at least sell a change of course), the parliamentary arithmetic could shift.
Penny Mordaunt hasn’t yet gone as apparently she is demanding a free vote on the final deal in Parliament, i.e. so that MPs are not bound by the PM’s decision.
Adding together Raab’s surprising pique, Gove’s chutzpah, and Mordaunt’s defiance we can see that TM has lost what little power she has left. Theresa unfortunately has a habit of slighting her ministers unnecessarily.
- Raab was always unhappy that although Brexit Sec, he didn’t really do any of the negotiating, but instead it went through civil servant Olly Robbins.
- Gove and Theresa have strong personal antipathy so there will be an element of him exacting his revenge
- Mordaunt evidently doesn’t trust TM’s assurances that it’s her Deal or No Deal; why ask for a free vote as party discipline has broken down so much that it’s likely MPs vote with their conscience without fear of consequence when the time comes anyway
What happens next?
TM lives to fight another day, and, most likely, the weeks until the Parliamentary vote.
- Despite Rees-Mogg putting in his letter, it’s still unclear whether the magic 48 have been reached to force a leadership contest
- This is unsurprising as it’s still not clear who the frontrunner challenger would be, or whether they would want it at this stage
- TM has said she would still run in a contest. Under the rules, if she wins then no-one could challenge her for 12 months. That’s what continues to stay the hand of the ERG: they run the risk of their Brexiteer candidate losing out to TM if she wins centrist and Remainer votes.
- If anyone actually wanted to take her on they would have challenged her after last summer’s election. Instead, the Boris Johnsons of this world have calculated that it’s better to let her fail completely and then be begged, like Superman, to Save Us All.
- TM therefore needs fatally wounding, which would clearly come with the Parliamentary Vote
The only thing that could change this and hasten her demise would be a resignation from Gove and/or one of the other Cabinet big beasts like Hunt or Javid.
Then it’s onto the Parliamentary Vote where we emphasise again that it’s becoming in more and more people’s interests for there to be mayhem. If the government falls to a confidence vote, loose coalitions of the willing will hope they can become the government within the 14 day period before it goes to a General Election that nobody – including the general public – wants.
We haven’t yet heard from the EU27 governments. They only got sight of the document last night themselves. Will they seek also to unpick the deal? Is it too nice to Britain? Must France and Spain object pour encourager les autres, like, say, those autres in Italy.
Only today has everyone woken up to the idea that there are a plethora of future paths for the UK, all of which are likely to damage the economy. A new PM, No Deal, or No Brexit. GBP/USD can easily fall back below the 1.1800 lows, particularly when so little is trading and liquidity is already at a premium. Remember the flash crash in Asian hours in 2016? Cable has never had a reputation as the most stable currency pair. It’s already been the biggest drop in 10y Gilt yields since 2016. The question is when UK yields actually rise as an EM-style risk premium gets priced in. Expect more volatility ahead.