Theresa May has suffered a second humiliating defeat on her Brexit deal, in a move that is expected to delay the UK’s exit from the EU and could jeopardise the prime minister’s own future.
MPs voted by a margin of 391-242 to reject her withdrawal deal, which had been bolstered by an eleventh-hour deal with Brussels designed to assuage British Eurosceptics.
Here the FT provides answers to the big questions about Brexit and what happens next.
What is the latest Brexit news?
Mrs May has suffered a 149-vote defeat that was lower than the 230-vote rejection of her original Brexit deal in January but which still represents one of the biggest House of Commons defeats on record by a British government.
With just 17 days to go until the scheduled date of Britain’s exit from the EU, it leaves the British prime minister’s Brexit strategy — and her authority — under grave pressure.
She had hoped that legal assurances on the backstop — the part of the withdrawal deal that would keep the UK in a customs union with the EU to avoid a hard Irish border — would win over Eurosceptic critics.
But those hopes faded on Tuesday morning, when its own top legal officer, attorney-general Geoffrey Cox, published an opinion saying the legal risk of the UK being trapped in a customs union with the EU were “unchanged”.
Shortly after his opinion emerged, pro-Brexit Conservative MPs and the Democratic Unionist party made clear they would vote against Mrs May’s deal
What happens now?
Mrs May has confirmed that, now that her deal has been defeated, MPs will vote on Wednesday on a parliamentary motion about whether the UK should leave the EU on March 29 without an agreement. Facing huge divisions within her government and party, she will allow a free vote on the issue but has made clear that she would oppose leaving without a deal.
If the Commons rejects a no-deal Brexit, MPs will vote on Thursday whether the UK should request an extension to the formal Article 50 divorce process with the EU to delay Britain’s departure. But Jean-Claude Juncker, European Commission president, has warned that the UK should leave the bloc by May 22. Otherwise, he said, the UK will be “legally required” to hold elections to the European parliament taking part between May 23 and May 26.
What was May’s original deal?
In January the House of Commons comprehensively rejected - by a record 230 vote margin - the 585-page draft withdrawal treaty that Mrs May agreed with the EU in November as well as on a non-binding political declaration that seeks to lay out the option for talks on longer term ties. Because the negotiations with the EU have stalled, this deal remains largely unchanged ahead of Tuesday’s vote.
The withdrawal treaty governs the terms of Britain’s divorce from the bloc, fixing the country’s Brexit bill of £40bn or more, establishing the rights of EU and UK citizens in each other’s jurisdictions and setting up a transition period that would retain much of the status quo and last until December 31 2020, with a possible extension until December 31 2022.
The most contentious provision is the backstop, which would come into effect at the end of the transition period if no other solution was found to prevent a hard border in the island of Ireland.
This would keep Northern Ireland in the bloc’s single market for goods — and so retain much of the EU’s authority over the province — while including the whole of the UK in a customs union with the bloc.
What happens next?
‣ See our timeline of key Brexit dates
- In progress
- Not started
MUST BE WRAPPED UP BY AUTUMN 2018
- Terms of the transition
- Separation terms
- Future status of Northern Ireland
- Framework for future UK-EU relationship
TO BE COMPLETED BY MARCH 29 2019, BREXIT DAY
- Approval by at least 20 of the other 27 EU states at a summit
- UK parliament holds meaningful vote on deal
- UK parliament passes separate legislation to bring exit treaty into British law
- Consent vote by European parliament
TO END ON DECEMBER 31 2020
- Formal trade talks begin
- UK seeks to replace 750 EU international agreements
- Both sides prepare new immigration/customs/regulatory systems
- European elections in May 2019
What are the alternatives to May’s deal?
The options range all the way from a no-deal Brexit to a second referendum that could result in the UK staying in the bloc.
After another big defeat for Mrs May’s deal, the country may be left scrambling for alternatives with little time ahead of Britain’s scheduled exit. Many Brexiters prefer leaving the EU without a deal, because the treaty Mrs May negotiated could keep the UK so close to the bloc, particularly if the backstop enters force. Supporters of a softer break favour remaining in the customs union, the single market, or both. And many Remainers dream of a second referendum that would could reverse the original 2016 decision to leave the bloc.
If Mrs May’s deal is indeed defeated on Tuesday for a second time, she has promised a vote by no later on Wednesday on whether to proceed towards a no-deal Brexit, and a further vote, by no later than Thursday, on whether instead to ask the EU for a delay to the exit date of March 29.
MPs are thought likely to vote against a no-deal exit and for a delay of some sort but these are uncharted waters.
Read more on the possible Plan Bs.
Will there be a delay?
With little more than two weeks to go before the scheduled Brexit date of March 29 2019, the likelihood of delay — and an extension of the Article 50 notification process — is on the rise.
Even before the delays caused by the political impasse in Westminster and Brussels, a delay was already looking likely - because of the sheer amount of legislation that would have to be passed to implement a deal.
If the Commons backed a second referendum, which is not at the moment considered the most likely outcome, there would have to be a lengthy Article 50 extension.
Even if the UK decided to head for a no-deal exit, some MPs suggest both sides might be willing to delay the exit date to offer more time to prepare.
Read more about the possibility of delay
Will Brexit hit house prices?
As the UK’s planned exit from the EU looms, London’s housing market has largely frozen up and other parts of the UK have begun to feel the chill.
Overall, year-on-year house price growth across the UK in January was at its slowest in almost six years, with a rise of just 0.1 per cent, according to the Nationwide index; it remained sluggish in February, with a 0.4 per cent rise.
The Royal Institution of Chartered Surveyors said its members’ three-month expectations were flat or negative across the country. It put the sluggish readings down to “ongoing uncertainty about the path to Brexit dominating the news agenda”.
But some analysts argue that a “Brexit bounce” could take place, above all in London, if the UK reaches a satisfactory deal with the EU.
Will Brexit cause a recession?
Next to no economists forecast a British recession this year — even if there is no deal. That said, the economy was showing clear signs of slowing down at the end of last year. The hot money that the country’s economy depends on to keep moving ahead is also becoming harder to come by.
The lack of clarity over what shape Brexit may take has made also it impossible to produce a single growth forecast for the UK’s economy, according to an increasing number of economists who are now publishing multiple predictions based on different outcomes
How will Brexit affect the pound?
The aftermath of the 2016 referendum has led to some of the most volatile trading in the pound in the past half century and is expected to continue to do so up to and beyond March 29.
The most widely watched metric of sterling’s performance is its behaviour against the dollar. However, its movements against the euro, which have also been highly volatile, are widely seen as a proxy for Brexit risk.
Read more about Brexit and the pound
‣ FT Markets Data: Compare GBP with other currencies
What are the preparations for no-deal?
While Mrs May has struggled to sell her deal at Westminster, companies and individuals are preparing for a disorderly and potentially chaotic no-deal exit.
Until now, much of the preparation for a no-deal exit by British business has been done by large corporations, especially in the financial, pharmaceutical, automotive and food sectors. Financial services companies have moved assets worth almost £800bn including staff, operations and customer funds to mainland Europe since the 2016 vote, according to the consultancy EY. .
One of the greatest concerns is the supply of medical goods. Leading figures in the pharmaceutical industry say huge efforts are being made to ensure patients receive drugs sourced in Europe.
The big drugmakers have already built stockpiles, with most going beyond the six week supply mandated by government. Ministers have promised to charter aircraft if needed to bring in drugs with a short shelf-life; and medical supplies will take priority on government-chartered ferries. Hospitals and GP surgeries have strict instructions not to create pressures by ordering extra supplies.
The big question is how consumers will react to the uncertainty. Buying a few extra tins of tomato and bags of frozen peas over a period of weeks would hardly matter. But a sudden bout of indiscriminate panic-buying could drive up the price of staples that would otherwise have been available as usual.
Read more about Britain’s year of living dangerously
Read more on stockpiling and the hamster list
What are the customs union and the single market?
In 1968, just over a decade after the European Economic Community was founded, the European customs union was completed, with a common external tariff and the intent of establishing free trade within the area.
Almost 50 years later, the internal market — or single market, as it came to be known — remains a work in progress. The “four freedoms” — movement of goods, services, capital and labour — are a founding principle of the EU.
At stake in the Brexit negotiations are the kind of ties the UK will have with both the single market and the customs union, which could shape Britain’s future for decades.
When was the Brexit vote?
Britain’s historic referendum was held on June 23 2016. Initially the British government had wanted the question: “Should the UK remain a member of the EU?” But the country’s Electoral Commission, which by law has to be consulted, was unhappy with the phrasing, noting concerns that the question was biased and might encourage people to vote Yes.
It recommended in September 2015 that the question be amended to: “Should the UK remain a member of the EU or leave the EU”? The government and parliament accepted these changes and this was the question that was asked.
How many people voted for Brexit?
On a record turnout of 72.2 per cent, 17.4m people (51.9 per cent of voters) voted Leave, while 16.1m people (48.1 per cent) voted Remain in the referendum. The winning margin was therefore 1.3m votes.