Prime Minister Theresa May’s Brexit deal was rejected by Parliament in a humiliating defeat, her plan for leaving the European Union all but dead. Opposition leader Jeremy Corbyn responded by proposing a vote of no confidence in her government.
The House of Commons voted 432 versus 202 against the divorce the UK government brokered with the European Union. A margin of less than 60 would have given grounds to hope that the deal was salvageable, with the EU poised to engage in ways to make it more palatable.
Sterling rebounded smartly from the day’s lows and rallied more than a cent to stand above $1.28 after the vote.
Corbyn’s motion will be debated and voted on Wednesday. If it is successful, there will be 14 days for a new government to be formed, or a general election will be scheduled.
Instead, the largest defeat in over a century prompted the Labour Party to pounce to try to force a general election.
“It is clear the House does not support this deal,” May told MPs following the vote. “But tonight’s vote tells us nothing about what it does support,” she said, pledging to talk to her Northern Irish allies and senior politicians across Parliament to try to reach a consensus. “The government will approach these meetings in a constructive spirit.”
She also acknowledged the “scale and importance” of the vote and said the first step must be to confirm that MPs still had confidence in her government.
It is likely that Tories and Northern Ireland’s Democratic Unionist Party, which props up her government, would still stand by her — for now. Though one question is whether pro-Brexit Tories who wanted to oust her as leader last year would consider voting with the opposition just to get rid of her.
More than two years after the nation cast a die and voted to leave the 28-nation bloc, the UK is facing political paralysis over a decision that has divided the nation and its political class for decades.
May’s choices are limited by the fact that her Conservative party does not have a majority in Parliament and that there are competing interests between those who want a clean break from the EU those that want to preserve close ties and an opposition party eager to come power.
The UK was meant to leave on March 29 — two years after May triggered the process — but now that is also looking unlikely and an increasingly boxed-in prime minister could well decide to ask fellow EU leaders for an extension as she works out her next steps.
The chairman of EU leaders Donald Tusk said the only positive solution after the vote is for Britain to stay in the EU.
“If a deal is impossible, and no-one wants no deal, then who will finally have the courage to say what the only positive solution is?” Tusk tweeted after the vote.
The Constitutional Court will make its ruling on Thursday on the UDM’s application to force National Assembly Speaker Baleka Mbete to conduct the vote of no confidence in President Jacob Zuma by secret ballot.
After Zuma’s controversial Cabinet reshuffle at the end of March, that saw Finance Minister Pravin Gordhan axed, among others, the opposition asked Mbete to schedule a vote of no confidence in Zuma.
It was initially set down for April 18. The opposition however asked for it to be postponed pending the application to the court for the vote to take place in secret.
Opposition parties hope this would encourage enough ANC MPs to vote against Zuma for it to succeed.
UDM leader Bantu Holomisa had argued that Zuma’s reshuffle led to two ratings agencies downgrading the country’s debt to junk status. In addition, he said MPs had been threatened with losing their seats and with violence if they voted against him.
Mbete previously said the UDM’s application had no merit and it did not fall within the court’s exclusive jurisdiction.
She said if the court found she had the power to order a motion of no confidence via secret ballot, she would act in accordance with its ruling.
The 2016 Municipal Elections are happening today, with the political circus in overdrive as parties chase your all-important vote.
But how have Municipal Elections impacted the rand in the past?
What’s the difference between Municipal and General Elections? General elections consist of a national and provincial vote. Nationally and provincially you vote for a political party (Proportional Representative or PR electoral system) to get seats in the national and provincial legislatures.
In municipal elections, you vote for a political party and a ward councillor (a mixed system of PR and ward constituency) to get seats at the municipal level. So it’s about selecting leaders for the country and province vs. selecting leaders for your city/town and local ward.
Which are more important, general or municipal?
If you think Municipal elections are note important, think again. Chances are your daily lives are more impacted by who leads your city/town/ward than who is leading the county. Think local road, refuse collection, rates you pay, sewerage and water.
What are the possible implications for the rand?
If previous elections (Municipal and General) are anything to go by, not much! Yes, we’ve seen little to no reaction in the currency market compared to previous elections. Does that mean elections are not important? Not at all, it just means that their immediate impact may be limited.
Why have elections had little impact in the past?
The real impact will depend on the policies set by the respected governing party. Policy takes a considerable amount of time to filter through the various levels of bureaucracy. Previous elections have been a near formality, with little to no real challenge to the ruling party. We’ve also seen relatively free, fair and peaceful elections in the past (and long may this continue).
What scenario could see rand improvement?
Free and fair elections with no violence/intimidation is really important. Considering all goes well come August 3rd, and opposition parties improve their showing, we could see the rand given a nice little boost.
What scenario could see rand weakness?
Any hint of violence/intimidation or elections that are not totally free and fair could impact negatively and cause a rand sell-off. Uncertainty/coalition governments in some of our larger metros could lead to a government in limbo and affect sentiment.
Source: Currencies Direct for www.currenciesdirect.co.za