Brexit withdrawal deal rejected: So what next?

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Rouse Partners

As the Brexit withdrawal agreement was rejected by MPs this week, what could this mean for Brexit and what might we expect to happen next?

On Tuesday evening following the Brexit vote, Kate Nicholls, Chief Executive of UK Hospitality, of which Rouse Partners are members, concluded a briefing with No 10, the Chancellor, Business Secretary and Brexit Secretary on the vote and next steps.

We are pleased to share the key points from this discussion below, however it is important to note that this was in the immediate aftermath and the situation is fast moving and may well evolve further.

The Government was “disappointed but not surprised” by the scale of the defeat. The key take out message was that this is a signal of what MPs are against, not what they may be for. It may also be an early signal from many, that despite the vote, they do want a negotiated agreement.

The Prime Minister’s strategy is to now reach out to senior parliamentarians and leaders of the opposition parties over the next three days to talk about aspirations on a realistic way forward and a Withdrawal Agreement which can command majority. Then will return to the House of Commons on Monday (21 January) to hopefully bring it to an expedited conclusion.

Process and timetable

The process and timetable need to have agreement in the House of Commons before the Government can approach the EU for renegotiation, and as part of that will look to extend the Article 50 deadline if more time is needed to reach a conclusion and ratify.

The Chancellor was clear the EU would not consider a request for extension, unless and until, we had a clear consensus and plan; but is confident that an extension would be granted to secure a smooth Brexit.

The Prime Minister returns to the House of Commons on Monday at which point amendments on ‘no deal’ and other indicative matters are likely to be taken and negotiations with the EU will carry on over next week. They hope to have a resolution within 10 days.


The Chancellor made clear that there is no likelihood that the EU would fundamentally reopen the withdrawal agreement and will therefore focus of amendments; and input will be on the political declaration and there was talk about addressing Labour concerns about retaining worker rights protections and environmental standards as part of this.

There is no signal of movement, yet, on a customs union which Labour says is needed to get their support.

No Deal

A Bill has been tabled by backbench MPs and senior cross party Parliamentarians in association with the clerks of the House of Commons. This would in effect remove the threat of ‘no deal’ should the Government’s plan to reach a consensus fail.

In effect, the Bill would create a parliamentary power to withdraw the Article 50 notice should parliament fail to reach agreement on a deal. This will be debated on Monday as part of the Government motion and will create an insurance policy backstop. Although a backbench measure, it is clear that this has Government tacit support.

Second referendum

A second referendum has been ruled out by the Prime Minister as an effective way forward – the objective is to rapidly end the uncertainty and coming to a negotiated agreement is the best way of achieving that.

Government’s position is surmised as:

  • It cannot have ‘no deal’ – it is not tenable and would be catastrophic.
  • It needs to achieve a deal which is as close to the Withdrawal Agreement as possible to aid renegotiation with the EU, but is looking for a substantive difference.
  • It will implement an active programme of reaching out to see what people do want as opposed to what they object to.
  • It wants to come to a conclusion quickly by the end of next week.

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This information has been produced by Rouse Partners LLP for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of this information is accepted by Rouse Partners LLP. In all cases appropriate advice should be sought before making a decision.

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