Closed Brexit vote: MPs reject no-deal exit – as it happened


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What happened last night?

Here’s a recap: Theresa May suffered another damning defeat in the House of Commons over her second attempt to get approval for her Brexit deal (a deal she said was improved). The defeat wasn’t quite as historically large as the first vote in January, but it was still overwhelmingly rejected by a difference of 149 votes.

If you want to catch up on our coverage of the event, here’s some of the best reads for you this morning:
— The reaction from Europe: there’s “no more” the EU can do
— How MPs voted: one quarter of Tories voted against the deal

— Robert Shrimsley, our political columnist gives a run-through of what could happen next: “one last heave for May’s deal is also still in the mix”
— The FT’s editorial board gives its view on the future (or lack of) for May’s deal

Sterling ticks higher

The pound is up 0.3 per cent at $1.3115 after a whipsaw run in the previous session took it as high as $1.3288 and as low as $1.3003, Michael Hunter writes.

Analysts argue that the currency’s ability to hold the $1.30 level depends on some the avoidance of a disorderly Brexit, with further room to rally depending on the terms of a deal.

Says Stephanie Kelly, senior political economist at Aberdeen Standard Investments:

I would strongly expect that parliament rejects No Deal by a large majority. That really sets the stage for approval of an extension of Article 50 by the end of the week.

Sterling should perform well in this scenario as the technical risk of No Deal subsides.

Ms Kelly continues:

The interesting question is how long the extension is and what, if any, conditionality the EU attaches since it requires unanimous approval in Brussels. This will condition the market response.

What the papers are saying

It was difficult to ignore May’s raspy voice last night — and all-too-easy to link her wavering vocal chords with a (second) failure to get backing for her Brexit deal. The Sun decided to focus on this for their front page headline: “Croaky horror show”

What happens now?

It is another busy day in parliament as Theresa May, whose altered deal for the terms on which Britain should leave the European Union was resoundingly rejected by MPs last night.

As that failed, MPs will vote later on whether the UK should now leave the EU with no deal at all.

Here is today’s schedule, courtesy of Politico:

8 a.m.: Theresa May hosts special meeting of the Cabinet.

9 a.m.: Boris Johnson hosts LBC Radio phone-in.

9.30 a.m.: European Parliament in Strasbourg debates Brexit ahead of next week’s EU summit.

10.30 a.m.: Deadline for MPs to submit amendments for tonight’s vote.

12 p.m.: PMQs.

12.30 p.m.: Chancellor’s spring statement.

2.30 p.m.: Office for Budget Responsibility press conference on U.K. economic outlook.

Mid-afternoon: Theresa May opens no-deal Brexit debate.

7 p.m.: MPs vote on whether to pursue no deal.

7.30 p.m.: Theresa May sets out next steps in the Commons, following the no-deal votes.

Tariff plan to limit no-deal damage

The government has released plans to slash import duties to zero on 87 per cent goods brought into Britain as part of a temporary no-deal plan.

This is designed to prevent a £9bn price shock to business and consumers.

But some imports from Europe will now be taxed, with price rises potentially being passed on by retailers to their customers.

Read more here from our chief political correspondent Jim Pickard and Whitehall editor James Blitz.

May’s game plan today

For her sake, let’s hope Theresa May has her voice back, since there’s a lot more on her plate today.

Our political correspondent Henry Mance tells us what’s in store:

Wednesday is now set to be one of the busiest – and potentially most influential days – of the Brexit process. Mrs May will chair a cabinet meeting at 8am. Europhile ministers want the prime minister to consider a customs union with the EU and possible membership of the single market, while Eurosceptics want her to back a no-deal Brexit.

After the weekly prime minister’s questions at midday, the chancellor Philip Hammond will deliver his spring statement. Mrs May will then open the debate on her Brexit motion, ahead of votes around 7pm. Mrs May will face a variety of attempts to amend her Brexit motion on Wednesday, which if successful would further undermine her authority.

No real winners

In today’s FT News Briefing podcast our chief political correspondent Jim Pickard describes the sombre mood in parliament last night, after the vote.

Why? Because MPs, even those who voted against the deal, know their future hopes around Brexit are still not guaranteed. The future of Brexit is still unclear.

Business speaks out on tariffs

Carolyn Fairburn, director general of business lobby group the CBI, is expressing frustration at the sudden plan to change Britain’s import regime in the event of Britain leaving the EU without a deal.

Ms Fairburn told BBC Radio 4′s Today programme:

This tells us everything that is wrong with a no-deal scenario.

[This is] the biggest change in terms of trade this country has faced since the mid-19th century being imposed on this country, with no consultation with business, no time to prepare.

This is no way to run a country. What we potentially are going to see is this imposition of new terms of trade at the same time as business is blocked out of its closest trading partner. This is a sledgehammer for our economy.

Dave Potts, chief executive of supermarket chain WM Morrison, has indiciated to our retail correspondent Jonathan Eley that consumers will have to pay higher prices unless retailers can cut their own costs of doing business.

Tariff is just another word for tax and we’ll be collecting those taxes and playing our part.

Ultimately it falls to retailers to continue that competitive framework that allows British consumers to benefit from low prices.

Conservatives debate the way forward

Former Brexit secretary Steve Baker and Conservative remainer Nick Boles are airing their opposing views on the way forward in a joint interview on the Today programme.

This follows a rejection of Mrs May’s new EU withdrawal deal by the Conservative Brexiters’ European Research Group and Northern Ireland’s Democratic Unionist Party, which props up the prime minister’s minority government in Westminster. Both the ERG and the DUP felt that the agreement did not go far enough to allow Northern Ireland to exit with the rest of the UK, as it still provides for an open border on the island of Ireland in the event of no deal.

Mr Baker, with support from Nigel Dodds of the DUP and ERG figurehead and Tory backbencher Jacob Rees Mogg, has suggested postponing Brexit day from March 29 to May 22 to allow businesses to prepare for a new tariff regime.

Mr Baker told Today:

We are in the business of trying to unite all wings of hte party and the DUP.

But Mr Boles countered this with concerns that the Conservative Party and the DUP were talking among themselves instead of thinking about what Brussels will agree to.
He said:

I won’t be able to support it because it is basically a no-deal exit. The EU has made it crystal clear that the transition is not available without the withdrawal agreement [being approved by London and Brussels]and without the backstop.

He said Brussels would offer a standstill “for money, plus the withdrawal agreement and the Irish backstop.

Mr Boles added:

This is very late stage. It is incredibly important for all of us to stick to things

that actually can be delivered, that are on offer, and not try to come up with new > schemes…that just simply won’t fly.

Earlier on Today, Rebecca Long-Bailey, Labour’s shadow business secretary, said on the BBC’s Today programme that it would not be “very difficult” to find a soft Brexit “consensus” in parliament, and called on Mrs May to allow Conservative MPs a free vote on different options.

Cameron tells us how he really feels

David Cameron shows his frustration over MPs who have been calling for Brexit to happen, yet keep voting against it: “It’s exasperating for the prime minister”

Mr Cameron — then prime minister and Tory party leader — allowed the 2016 Brexit referendum to go ahead, following pressure from Eurosceptics within the party, but he was also in favour of remaining in the EU.

The Independent Group campaigns for a People’s Vote

To recap, MPs are voting today on whether Britain should leave the EU without a deal, in the absence of parliament being able to agree on a transition arrangement.

The Independent Group, a set of MPs who broke away from their own parties to campaign against a hard Brexit, have tabled an amendment to the motion that will be voted on in the Commons this evening.

Basically, they want the Commons to get more time to debate how Brexit should happen, for MPs to agree on the way forward, and then for this to be put to the public in a second referendum.
Here is their spokesman, Chuka Umunna, explaining their position on Twitter:

Some hopeful words from Europe

Germany’s Federal Minister for Economic Affairs and Energy, Peter Altmaier, thinks that May’s defeat yesterday could be a turning point in the Brexit process. Could Brits and Europeans now begin to stand united?

What next?

Here’s a visual reminder for what will happen after tonight’s vote:

Don’t forget the Spring Statement

During the political maelstrom of the past few days, the fact that chancellor Philip Hammond will present his twice-yearly assessment of the country’s finances at lunchtime has fallen down the news agenda. The event, of course will be highly political. He also is not planning to make any tax changes or public spending announcements.

Mr Hammond said at the weekend that if MPs did vote for Mrs May’s amended Brexit deal – which of course fell by the wayside last night – he would then move on to considering the case for increased spending on public services, cutting taxes, and reducing the deficit.

He is now expected to highlight OBR and government assessments that the economy would be hit hard by a no-deal Brexit.

He has described the possibility of Britain crashing out of the EU as “very bad” for the economy, limiting his ability to find extra funding for police, schools and defence.

In terms of what he can say, Mr Hammond is expected to launch a consultation into new ways to fund Britain’s infrastructure in his Spring Statement on Wednesday, following on from his decision to axe the government’s controversial private finance initiative last year.

EU dismay

You can sense the frustration in Europe this morning. Most of what we’re hearing from EU leaders is there’s little more they can do right now, other than watch from the sidelines.

Here’s some notes from the FT’s Brussels correspondent Mehreen Khan:

EU leaders will be debating Brexit among MEPs this morning in Strasbourg. Romania’s Secretary of State for European Affairs, Melania-Gabriela Ciot, who holds the rotating presidency, has repeated that the UK needs to give a “credible” reason for any Brexit extension: “To be frank, given the additional assurances we have provided, it is difficult to see what more we can do”

Frans Timmermans, the EU Commission’s first vice president, adds: “We are in the hands of the British political system. We have to take it from there.”

Michel Barnier speaks in Strasbourg

The EU’s chief Brexit negotiator is now starting to give his views on the latest Brexit developments.

He’s pressing for a withdrawal agreement that is in the interest of citizens of the UK and the EU. More soon…

Barnier: the risk of no deal has never been higher
An exasperated Michel Barnier is now telling MEPs that there is a real risk of a no deal by “accident” if the UK does not agree a House of Commons majority for what to do next, Mehreen Khan writes from Strasbourg.

Waving around the 585-page Withdrawal Agreement already signed by Theresa May and Brussels, he not only says the deal “is and will remain the only available treaty” that will secure the UK’s orderly exit from the EU.He is also urging MPs to find a “constructive majority on a proposal.”

On the Northern Irish backstop – a plan for the border to stay open between Northern Ireland and EU member Ireland if no Brexit transition arrangement is agreed – Mr Barnier stresses his team has “done everything to explain” to the UK of the need to avoid a hard border in Ireland.

He says of the British government:

They have to tell us what they want. What will their choice be? What will be the clear line they take? That is the question we need an answer to now. That has to be answered before a decision on an extension. Why would we extend ? We have the WIthdrawal Agreement. We are waiting for an answer. We are at a critical point.

On the divisions in the House of Commons, Mr Barnier says:

Some want a second referendum, others want a no deal and this runs counter to all our assurances. But these guarantees are significant and we agreed them with the support of the UK government.

And on the idea of extending Article 50 to allow the UK to leave the bloc after the March 29 date set down by the legislation, he says:

Why would we extend these discussions? The discussion on article 50 is done and dusted. We have the withdrawal agreement. It is there.

His position is basically that there can be no transition deal or Article 50 extension without a withdrawal agreement, and no withdrawal agreement without a backstop.

MEPs: do not take the idea of a Brexit extension for granted

Even arch Brexiters such as backbencher Jacob Rees Mogg have warmed to the idea of taking longer than the March 29 exit date to hammer out arrangements for Brexit.

But as British lawmakers from both sides of the Brexit divide move towards agreement that more time is needed, members of the European parliament are pointing out that this is not a purely British decision.

MEPs in Strasbourg are also lining up to warn the UK government there has to be a majority in place for a Brexit extension, writes Mehreen Khan in Strasbourg

Parliamentarians don’t get a say over the extension – that is voted on by EU27 leaders by unanimity – but any long extension would impact the European Parliament. The UK would be obliged to hold an EP election if it remains a member state after May. Manfred Weber, leader of the biggest centre-right party in the EP, said the House of Commons vote was a “diaster”.
“There is no need for a single day of prolongation if we get no clarification from the British side about what they want”, said Mr Weber, who is running to becoming president of the commission.

The Labour party position

Peter Dowd, an MP for Britain’s main opposition party, says in a BBC interview that Labour’s Brexit position remains unchanged after the drama of last night’s vote. Labour wants Britain to stay in the European customs union and single market, removing some of the so-called red lines Mrs May put in place to govern the terms on which Britain would leave.

“If those red lines that the prime minister set are actually moved or got rid of,” Mr Dowd says, Brussels could reopen negotiations on an alternative withdrawal treaty. “I’m not quite sure what the period of time [would be] but you’ve got to try,” he says.

Czech support for a second referendum

Czech prime minister Andrej Babis said on Wednesday that Britain should not rule out a second referendum on EU membership, James Shotter writes.

Mr Babis tweeted that he had spoken to Mrs May about Brexit on Saturday and told her the best option was for the UK to remain in the EU, and that therefore it would be worth calling a second referendum. “She rejected this, but in my opinion it is still not ruled out,” he tweeted in Czech.

Boris shares his view

British politician Boris Johnson, speaking live on LBC this morning (and sporting a new haircut), says he’s sure that the UK will leave the EU on “good terms” and doesn’t understand why Remainers are feeling jubilant about last night’s result against May’s Brexit deal.

He adds that he doesn’t believe there will be a second referendum if a no-deal were voted down this evening: “I just don’t think that’s where MPs are right now.”

MEPs battle with Farage

During this morning’s session in Strasbourg, the European Parliament’s chief Brexit negotiator Guy Verhofstadt has been taking aim at Nigel Farage, the former UKIP leader who is also an MEP.
Mehreen Khan writes that Mr Verhofstadt is arguing against a long Brexit extension on the basis that this will allow Leavers such as Mr Farage to take over the Brexit process.

Sitting within earshot of the former UKIP leader, Mr Verhofstadt has said:

I don’t want a long extension. We will give a new mandate to Mr Farage. That’s exactly what he wants. He can continue to have a salary that he can transfer to his offshore company and do his dirty work in EU politics.

The former Belgian prime minister then urged the Tories to strike a cross party agreement for a Brexit deal, saying:

Queen and country have to be put first over party politics.

Mr Farage then turned his ire towards the EU’s chief Brexit negotiator Michel Barnier, saying to the Frenchman: “I told you so. You pushed your luck too far. ”

Farage then said EU27 leaders should reject an extension request from the UK government. On the prospect of the UK joining the upcoming EU elections, he says: “you don’t want me coming back here.”

Spain’s PM uses Brexit for domestic purposes

In an editorial in Spanish newspaper EL Pais, Spain’s socialist prime minister Pedro Sánchez used the parliamentary drubbing of Theresa May’s Brexit plan as a chance to warn against the danger of the nationalist right and simplistic referendum votes. These are issues that dogged his own government and pushed him to dissolve parliament and call snap elections for April, Ian Mount writes from Madrid.

The op-ed says:

It is impossible to understand the Brexit without taking into account the conjunction of three factors…A nationalism that advocates withdrawal based on the exaltation of myths and false nostalgia; the advance of the extreme right; and the simplification of democracy to the figure of a referendum that offers simple answers to complex problems.

Mr Sánchez’s administration collapsed when the Catalan separatist parties that had supported him voted against his 2019 budget plan over his refusal to negotiate an agreed referendum on independence for the wealthy region. His uneasy coalition with the Catalan parties also boosted support for the far-right Vox party, which in December won its first regional seats in the parliament of Andalucia and helped Spain’s rightwing opposition end 36 years of socialist control of the country’s most populous region.

Mr Sánchez said Spain, which is home to some 300,000 British residents, would continue to be an ally, however.

His editorial continues:

After its withdrawal, the United Kingdom will leave the European Union, but not Europe…it will continue to be a very important partner, especially for Spain, the first country in the EU by number of British residents and tourists.

Industry hits back at no-deal tariff proposals

The general secretary of the UK’s Trades Union Congress, Frances O’Grady, takes a strong line against the government’s plan to eliminate 87 per cent of import tariffs in the event of a no-deal Brexit. She highlights the damage this could cause to UK manufacturing industries:

The Institute of Directors, which represents and sets standards for business leaders across the UK, released a statement earlier today from its head of Europe and trade, Allie Renison, in response to the government’s plans:

“The information provided… has come far too late to allow businesses to be ready in just a few short weeks. Making these tariff decisions temporary will lead to widespread confusion about what may change and when, as firms will want to know well in advance about how duties may rise. Such unpredictability may also have consequences for our trading relations with countries outside the EU as well.”

European Commission responds to UK’s no-deal tariff plan

Brussels reporter Jim Brunsden has just shared the first reaction we’ve heard from Europe to the UK’s tariff proposals, which would be imposed in the event of a no-deal Brexit. Here’s the message, delivered by a European Commission spokesman:

“The differential treatment of trade on the island of Ireland and other trade between the EU and the UK raises concerns, and in the event of a no-deal the union has already made clear that it will apply its normal third country trade regime to all trade with the UK, and accordingly charge MFN tariffs on imports from the UK into the EU. This is essential for the EU in order to remain a reliable trading partner to the rest of the world.”

Cabinet split over votes tonight

Tonight’s vote on whether to rule out a no-deal Brexit will split the Cabinet, writes the FT’s Seb Payne. Theresa May announced yesterday that it will be a free vote – collective responsibility will be suspended so ministers can vote with their consciences on whether the UK should leave the EU without a deal at the end of the March (or possibly at all).

The divide is set to go along the typical Remain/Leave lines – with chancellor Philip Hammond, work and pensions secretary Amber Rudd and justice secretary David Gauke set to vote against no deal.

On the Leave side, Brexit secretary Steve Barclay and leader of the Commons Andrea Leadsom are likely to vote to keep the option of no-deal on the table.

But there are some waverers, particularly those who have one eye on the next Conservative party leadership contest. Defence secretary Gavin Williamson will vote to keep no-deal on the table, as will the chief secretary to the Treasury Liz Truss.

But foreign secretary Jeremy Hunt will go in the other direction and is very unlikely to support a no-deal Brexit. Another crucial minister to watch is home secretary Sajid Javid, a likely leadership contender. His decision will be difficult, as he will be keen to speak to the right flank of the party’s grassroots, but his department is one of the most exposed to the effects of a no-deal.

And how will Mrs May jump? No one knows, although some in the government think she end up abstaining. “It would be peak May,” says one Tory wag.

Prime minister’s questions begin

Theresa May starts taking questions from MPs.

May: no deal better than bad deal

Ahead of the vote tonight over no deal, Mrs May says that she was committed to leaving the EU with a good deal, adding that “no deal is better than a bad deal”.

Responding to a question from leader of the opposition Jeremy Corbyn over how she will vote tonight, Mrs Mays said that she “will be voting for the motion standing in my name” – suggesting that she will try to take no-deal off the table.

MPs have been speculating this morning whether Mrs May will support taking no-deal off the table.

Corbyn: rudderless government

The leader of the opposition goes on the attack, saying that Mrs May’s deal has failed, that she has no longer the ability to lead, and that she has a rudderless government at a time of national crisis. He asks her to show leadership, and asks for a plan.

Mrs May says that MPs will vote on no-deal today and on extending Article 50 tomorrow. MPs have to make choices.

Hammond on way

While the Prime Minister is facing questions from MPs the Chancellor has tweeted that “I’m on my way to Parliament to deliver the #SpringStatement – the government’s response to the forecast from @OBR_UK. I’ll be setting out how we’ll invest in infrastructure, technology, housing, skills, & green energy, to capitalise on the post-Brexit opportunities ahead.”

May: fights for her voice and deal

The prime minister is showing a spirited defense even with a very croaky voice, putting the leader of the opposition down with a withering: “I may not have my own voice but I do understand the voice of the country.”

May to vote to block no deal

Theresa May has said she will vote tonight for her motion to block a no-deal exit on March 29, writes the FT’s Laura Hughes.

She lost control of Brexit on Tuesday night after MPs overwhelmingly rejected her revised exit deal was by 149 votes. Within minutes of her defeat she announced that the Commons would be given a free vote on Wednesday on blocking a no-deal exit on March 29.

Asked by the UK Labour leader Jeremy Corbyn how she would vote tonight, Mrs May replied: “I will be voting for the motion in my name.”

“I want to leave the European Union with a good deal, I believe we have a good deal,” she told MPs.

Brexit extension has to be dealt with by leaders – EU ambassadors

Mehreen Khan, one of the FT’s Brussels correspondents, reports that “EU27 ambassadors had a long session on Brexit next steps. Countries are divided on how much their leaders should be prepared to grant an extension at next week’s summit. A small hardline camp says “do nothing”, but most want to be ready to give the UK something by 21st pending request.”

She adds that the “feeling among EU ambassadors is extension dynamics go beyond civil servants pay grade. Has to be dealt with by leaders – including legal consequences of a longer extension -12 months. Bigger member states were insistent there is no pressure on the EU to solve another UK problem. Yet.”

May: no Malthouse-style period transition

The PM is asked if she will support an amendment for the so-called ‘Malthouse compromise’, which would allow a transition period using standstill agreements and financial payments in the event of a no-deal exit. But Mrs May, who is into her second day of having almost lost her voice, says that the EU had made it clear a transition period needed a withdrawal agreement.

Chancellor stands up to deliver the spring statement

Philip Hammond is on his feet

Chancellor hails the UK economy’s performance

Mr Hammond, doing his best to smile, says the UK has now grown for nine consecutive years and is forecast to continue growing for each of the next five years. He points out a strong record of job creation and falling youth unemployment.

GDP lower this year but higher in years after

Hammond says that economic growth will be 1.2 per cent this year – down from 1.6 per cent forecast – but would return to 1.4 per cent in 2020 and 1.6 per cent in the two years after, slightly higher than expected.

Current weakness is temporary – OBR

The FT’s economics editor Chris Giles says:

The official forecasts show the independent Office for Budget Responsibility thinks the current weakness in growth is temporary. So long as there is a smooth Brexit, it thinks the shortfall of growth in 2019 will be entirely reversed in the early 2020s.

Borrowing revised down in every year – OBR

The Office for Budget Responsibility has revised down public sector borrowing in every year of the forecast period. The OBR believes public sector borrowing will be £6bn lower by the end of the five years than in its October forecast.

Public sector borrowing will fall to £13.5bn in 2023-24 from £29.4bn in 2019-20. The OBR had previously forecast borrowing of £19.8bn in 2023.

This means debt as a percentage of national income will fall to 73 per cent from 82.2 per cent.

FT economics editor Chris Giles says:

The public finance forecasts show a multi-billion improvement in each of the next five years as tax revenues exceed the Budget expectations. This allows Philip Hammond to promise more public spending and tax cuts later this year if a Brexit deal goes through.

Deal dividend after 3 year review

Hammond says that assuming a Brexit deal is agreed, and the uncertainty lifted, then a full three-year spending review will be announced before summer recess that will go beyond the NHS into social care, schools, environment and police. It would have renewed focus on delivering high quality outcomes.

If we leave the EU with a deal, he says we will see a deal dividend – an economic boost from the return of business confidence and a fiscal boost.

This would be an end of austerity delivered by a Conservative government.

Hammond offers more spending if a Brexit deal is done

Economics editor Chris Giles:

Philip Hammond’s big carrot for MPs and the public sector is that he is offering a lot more public spending in future years if a Brexit deal is done. The 3 year spending review he announced would be completed by the Autumn would include more public borrowing than recorded in the forecasts today. In that sense, they are already out of date.

Hammond: no-deal will shrink economy

The chancellor is clear that the deal dividend will only be delivered if parliament votes in favour of a suitable Brexit deal. He says that a no-deal exit would mean significant disruption in the short-term, and a smaller less prosperous economy in the long term, with lower growth, higher unemployment, higher prices.

Thin Spring Statement so far

Philip Hammond promised a fiscal “non-event” and so far he has delivered. The Chancellor’s announcements so far have mostly been reviews and consultations or already existing targets.

Andrew Bounds, the FT’s North of England correspondent tweeted:

First till ring from chancellor. £120m for the Borderlands growth deal spanning Cumbria and Southern Scotland. Talk of backing #Northernpowerhouse Rail but no specifics unless in the small print #SpringStatement

Meanwhile, here is the redacted copy of the statement that Labour’s John McDonnell received in advance, via the Labour Whips Twitter account.

Global Britain and relaxed checks at airports

The UK will scrap paper landing requirements at points of entry, while citizens of the US, Australia, Canada, New Zealand, Japan, Singapore and South Korea will be able to use e-gates at airports and Eurostar terminals.

It demonstrates the UK’s commitment to “global Britain”, Mr Hammond said.

Hammond: 30,000 affordable homes

A new £3bn Affordable Homes Guarantee scheme will deliver around 30,000 affordable homes, with £717m from the Housing Infrastructure Fund to unlock up to 37,000 new homes on sites in West London, Cheshire, Didcot, and Cambridge.

A Future Homes Standard will mandate the end of fossil-fuel heating systems in all new houses from 2025.

Free sanitary products at all secondary schools and colleges

The Chancellor announces that the government will fund free sanitary products at all secondary schools and colleges to stop girls from missing school due to “period poverty.”

Infrastructure and tech consultation

The chancellor has confirmed the FT’s story this morning that it will launch a consultation into new ways of getting private investment into British infrastructure following on from the government’s decision to axe the private finance initiative last year.

Mr Hammond said he would publish a National Infrastructure Strategy alongside the Autumn budget, writes the FT’s Gill Plimmer.

Mr Hammond also said that as a first step to reforming competition in the tech sector he would ask the CMA to undertake a study of the digital advertising market.

The other tech-related commitments are: £79m in Archer II, a new supercomputer to be hosted at Edinburgh university, £45m commitment to the European bioinformatics institute and funding for a new photonics institute in Oxfordshire.

Hammond sits

The chancellor concludes with a rousing appeal to MPs, pointing to plans to allow a future relationship that will allow Britain to flourish before taking his seat to listen to the Labour response.

Growth down for now, borrowing down for good

Growth forecasts were revised down in the short term but up in the medium term while borrowing was lowered in all five years for which the OBR produced a forecast.

McDonnell: Brexit bankruptcies

Shadow chancellor John McDonnell attacks the Spring Statement, saying that Labour was seeing more “Brexit bankruptcies” than a “deal dividend”. The no-deal tariffs announcement this morning was part of a “threatening” and “calamitous” strategy. McDonnell said that it was time to take a no-deal Brexit off the table.

He also jokes about the “heavily redacted” text of the statement he received in advance of Mr Hammond standing up to present it. Here is an image of it, shared by the @labourwhips Twitter account.

A curtailed grilling for Hammond

Speaker John Bercow says he plans to cut short the questions to the chancellor due to the other business facing the house – i.e. Brexit. He suggests wrapping up the Spring Statement questions at 2:45pm.

Government to issue £114bn in gilts

Britain’s Debt Management Office has said the government plans to issue £114.1bn in sovereign paper in the 2019-20 fiscal year. The overall figure is lower than the £123bn projected by City fixed income analysts in a poll conducted by Reuters.

Issuance will be spread fairly evenly between short, medium and long term debt.

The market reaction has been muted. The two-year Gilt yield was up 2.6 basis points at 0.742 per cent, while the 10-year was up by a similar margin to 1.186 per cent.

“We expect ongoing safe haven demand and sizeable QE buybacks to ensure [the] increase in issuance is easily digested by the market,” said UBS analysts ahead of the DMO report on Wednesday.

£100m for knife crime

A new £100m funding package to help police fight the surge in knife crime across the country was also announced, writes the FT’s Helen Warrell.

The pledge will provide a ringfenced fund to pay for additional overtime specifically for those working on knife crime, and for new violent crime reduction units to provide what Mr Hammond called a “new cross-agency response to this epidemic”.

This comes just a week after police chiefs appealed for emergency financial support at a crisis meeting with the Home Office. Official statistics released last month showed that the number of fatal stabbings in England and Wales had reached the highest level since records began more than 70 years ago. There have been a dozen fatalities from knife wounds in London alone so far this year, including the stabbing of 17 year old Jodie Chesney in East London earlier this month.

Highlights from the Spring Statement

- Growth forecasts for this year down but raised for 2020 and 2021
- Borrowing forecasts lowered for the foreseeable future
- Relaxed border procedures at airports for some nationalities
- Free sanitary products for girls at schools and colleges
- More money towards building affordable homes
- Special £100m for police to tackle knife crime

Brexit debate scheduled for 3pm

The Spring Statement debate will be wound up at 2.45pm at the latest, which means that MPs will begin to debate the Brexit no-deal motion at about 3pm.

Michael Gove will open the debate for the government, rather than the increasingly hoarse Theresa May, according to Labour’s whips.

Business leaders: Spring Statement will “barely register”

The Institute of Directors said that the Spring Statement “will barely register with most business leaders as Brexit uncertainty continues to cast a shadow over their organisations”.

Edwin Morgan, interim director general of the IoD, said:

Warm words and proposed consultations are not enough for businesses at a time when confidence is rock bottom and investment plans are eroding away, and many will find it difficult to tread water until more decisive action at the Autumn Budget.

While a ‘no deal’ would wreak certain havoc for many firms, we must also avoid being lulled into thinking an exit deal alone is a substitute for providing a real economic impetus that lowers costs, spurs productivity growth, and supports businesses as they adjust to Brexit, whatever its form.

Indeed, the fact that the OBR lowered its forecast for GDP growth this year – based on a smooth exit from the EU – highlights just how much the economy is set to fall below its potential, even in a relatively benign scenario.

Hammond: time for Brexit consensus

Phillip Hammond’s comments on Brexit have caused questions over the prospect of softer Brexit. In his Spring Statement, writes the FT’s Laura Hughes, Mr Hammond urged MPs to find a way forward after the government lost control of Brexit on Tuesday and made a thinly veiled suggestion that Theresa May might have to compromise.

Ahead of a vote on extending Article 50 tomorrow night, the chancellor called on the Commons to “map out a way forward for bringing a consensus”.

Last night’s events mean we are not where I hoped we would be today”, he told the Commons. “Our economy is fundamentally robust. But the uncertainty that I hoped we would lift last night, still hangs over us.

We cannot allow that to continue. It is damaging our economy and it is damaging our standing and reputation in the world. Tonight, we have a choice. We can remove the threat of an imminent no-deal exit hanging over our economy.

Tomorrow, we will have the opportunity to start to map out a way forward towards building a consensus across this House for a deal we can, collectively support, to exit the EU in an orderly way to a future relationship that will allow Britain to flourish, protecting jobs and businesses.

Brexit Briefing: What do MPs want?

Brexit Briefing – our daily newsletter on all things Brexit – has just landed into inboxes. Today the FT’s James Blitz looks into what parliament might do with the extension it is expected to vote in favour of asking for tomorrow.

The problem for the UK is that if it wants an extension, this needs to be agreed by all 27 EU member states, probably at next week’s EU heads of government meeting. And securing that agreement will not be straightforward.

So what justification for an extension can the Commons provide? And how will it reach that decision?

To sign up for the briefing, click here.

CBI: UK economy ‘remains shackled by Brexit’

With so little to go on in the Spring Statement, the UK’s biggest business lobby has taken the opportunity to reiterate its opposition to a no-deal Brexit.

Against a hugely uncertain political backdrop the Chancellor has made an admirable attempt to set out a long-term vision for the UK economy, yet remains shackled by Brexit.

This year’s forecast downgrade brings the danger of no deal to the UK economy sharply into view. It must be avoided.

On policy specifics, the CBI gives a thumbs down to the government’s plan for a digital services tax.

Going it alone on a digital services tax is high risk, especially at a time when the UK already looks increasingly isolated. The EU has dropped their plans and got behind the OECD’s efforts – the UK should follow suit. The government needs to be doing all it can to encourage investment in the UK and adoption of new technologies, not putting up barriers.

Sterling finds support ahead of Brexit vote

Sterling is extending its rally in afternoon dealings in London, with investors weighing chancellor Phillip Hammond’s Spring Statement and awaiting this evening’s vote.

Britain’s currency was up 0.9 per cent in recent trade against the US dollar, and 0.67 per cent on the euro, writes the FT’s Adam Samson.

Traders appeared to be unconcerned over a downgrade in the Office for Budget Responsibility’s UK economic growth forecast for this year to 1.2 per cent from 1.6 per cent in the autumn.

Focus remains on the vote on a no-deal Brexit, expected to take place this evening, and a further one tomorrow on whether the date of the UK departure from the EU should be delayed.

Amendment to rule out second referendum?

A cross-party group of MPs are reportedly working on an amendment that would rule out a second referendum, writes the FT’s Laura Hughes.

She has been told that the text of the amendment would be to ensure “that the result of the 2016 EU Referendum should be respected and that a second referendum would be divisive and expensive, and therefore should not take place”.

Debate on no-deal Brexit to start soon

The debate over the Spring Statement has now ended, with a 10-minute rule bill now being discussed. MPs will begin the debate over no-deal Brexit shortly after 3pm, with a vote scheduled at 7pm. Michael Gove will open the debate for the government.

Gove introduces no-deal Brexit motion

Environment secretary Michael Gove, standing in for Theresa May, introduces the government’s motion that aims to take no-deal Brexit off the table. Mrs May has indicated that she will vote in favour of its motion, which will split her cabinet during a free vote.

Speaker selects two amendments – Spelman and Green

A number of amendments were offered up by MPs, but only two – A and F – will be voted on tonight.

A – the Spelman amendment essentially seeks to remove the specifics of the government motion and rule out the principle of no deal, rather than just the act of leaving without a deal at the end of this month.

F – the Green amendment is a rerun of the so-called Malthouse compromise, which boils down to paying the EU for a transition period before a no deal exit.

The government has said it will allow a free vote on the Green amendment, but not on the Spelman amendment.

Gove: we must deliver on vote

The environment secretary says it is “vitally important that we honour” the Brexit vote. People voted to leave the EU, he says, and so this must be delivered, otherwise those people would take a dim view of anyone trying to frustrate Brexit.

Soubry warns no deal remains on the table

An early contribution from former Tory Anna Soubry, now of the Independent Group lobbying for a second referendum, stresses that the government’s motion does not take the threat of no deal off the table.

She describes it as a “shameful carry on” that the government is seeking to whip against the Spelman amendment that she believes could indeed remove the threat of leaving without a deal.

More complaints about government whipping

Ben Bradshaw, a Labour MP, describes the government’s reported decision to whip against Spelman but not Green as an “absolute disgrace”.

Gove: UK would ‘get through’ no deal exit

In response to various interventions from his own benches – notably from Dominic Grieve and Ken Clarke – Gove insists the UK would be able to “mitigate the risks of leaving without a deal”, but says “none of us can be blithe or blase” about the challenges.

He goes on to point to some of the challenges and additional costs facing businesses in the event of a no deal, particularly in the sector he is responsible for: agriculture.

Gove: Northern Ireland at risk in no-deal

Gove says that Northern Ireland would be under particular pressure if the UK left without a deal in March, adding that the situation at present with no executive would be difficult to sustain

For more on why businesses are worried, read the FT’s coverage of this morning’s tariff announcement here:…-b168-96a37d002cd3

Meaningful votes ‘ad infinitum’?

Labour MP Peter Kyle, who has advocated passing the withdrawal agreement but then putting it to a public vote, asks if the government plans to bring the deal back again and again to the house, or look for a new option.

Gove says nobody can “dodge choices”, and points out that all the alternatives are unattractive.

Angela Eagle, a Labour MP, asks if the house will be asked to vote on the deal “ad infinitum”.

Gove says vote against the deal last night leaves the house with only “unpalatable choices”, and says parliament must decide what it wants. “It is now make your mind up time.”

Starmer: let’s ditch no deal with biggest majority possible

Keir Starmer, Labour’s shadow Brexit secretary, is up. He says his side has never accepted that there should be a “binary choice” between no deal and Mrs May’s deal.

He wants parliament to rule out no deal this evening “with a majority as big as possible”. He calls the mantra “no deal is better than a bad deal” to be killed off once and for all.

Possible indicative Brexit votes on Thursday

Gove says that it is possible that MPs will be given the opportunity to have indicative votes over Brexit outcomes on Thursday – such votes could provide some guidance on what sort of deal could pass through parliament.

Why whip against no deal amendment?

Steve Richards, writer, broadcaster and a regular contributor to the FT, explains (on Twitter) Mrs May’s decision to whip against the Spelman amendment, which would seek to remove the threat of a no-deal exit for good.

The decision by May to whip against removing ‘no deal’ permanently is transparently predictable. She wants to return with her deal and threaten no deal at the next cliff’s edge. She’s determined not to take no deal off the table so she can continue with the same old dance.

Starmer: ‘hopeless end’ leads Labour towards public vote

Keir Starmer says Labour promised in 2017 to respect the referendum result in its manifesto. It also rejected the Tory party’s redlines and a no-deal exit. Labour, he points out, then lost the election.

He says now that the government has reached a “hopeless end” in its attempts to secure a deal, the opposition now supports a public vote, ie a second referendum.

Will MPs vote for the Malthouse Compromise?

Much of the focus in parliament today has been on the so-called “Malthouse Compromise” amendment, writes the FT’s Seb Payne, named after jovial housing minister Kit Malthouse.

This plan was developed in secret by a coalition of Remain and Leave Conservative MPs to develop another Brexit plan should Theresa May come short. Now that the prime minister has failed to pass her plan once again, attention has returned to whether Malthouse can break the impasse.

The Malthouse plan, which will be voted on this evening, has three elements.

1) It would push back Brexit day to May 22 to give the government time to further prepare its tariff schedule.

2) It asks the government to offer the EU a stand-still transition period until the end of 2021, in which the UK would pay to maintain the status quo.

3) The UK would leave without a trade deal – but the government would unilaterally protect EU citizens rights.

Malthouse sounds enticing, says Seb, because it seeks to deliver all the benefits of the transition period without the downsides – namely the infamous Irish border backstop.

There is one issue with this cunning plan: it is not going to fly. Michel Barnier, the EU’s chief Brexit negotiator, has stated that there can be no transition period without the withdrawal agreement, which means no Malthouse. Hence why Mrs May has indicated she couldn’t support it. But it will be another free vote tonight, and so ministers and MPs can vote as they like.

Why is anyone still talking about it? Malthouse is a designed not to resolve Brexit but to bind the Conservative party together. It crucially has support from notable Brexiters – such as deputy ERG chief Steve Baker and former Tory leader Iain Duncan Smith – plus Remainers such as former education secretary Nicky Morgan and Simon Hart, head of the Brexit Delivery Group. It makes sense in party management terms, but little else.

France questions point of Brexit extension

Even as MPs prepare to vote on an extension of Article 50 tomorrow, European leaders have raised their own doubts.

France on Wednesday questioned the value of the EU agreeing to extend the Brexit deadline given the UK’s proven failure so far to agree internally on what it wanted from its future relationship with the EU, writes the FT’s Victor Mallet in Paris.

“The [UK] parliament has certainly said what it doesn’t want. But it hasn’t said what it wants,” Jean-Baptiste Lemoyne, French trade minister, told the FT in an interview. “So that’s why it’s reasonable to ask ourselves about the British ability to truly and properly substantiate and back up its request for an extension.”

President Emmanuel Macron has previously said a delay beyond March 29 might not be accepted “without a clear understanding of the aim that’s being pursued”, saying any extension would have to be justified by “new choices” on the part of the British.

Mr Lemoyne reaffirmed that hardline stance, saying the fact that negotiations within the UK over Europe in recent months had led nowhere “poses a question about the negotiating capacity of the United Kingdom”.

The question is, behind the request for an extension, what is the proposal of the UK? And it’s there that the UK must provide some details. Because to ask for an extension for a few weeks or months, only to find ourselves again in the same place a few months later, what’s the use of that?

Clarke: we’re back to square one

Kenneth Clarke, Tory remainer and father of the house, laments the fact that – after almost three years – no consensus has been found in parliament, in either political party, or in the country.

He describes Mrs May’s deal as “dead in the water”, and calls for indicative votes to “explore” what might be agreed.

His suggestion is to leave the political union, but stay in the common market – ie Norway-plus.

Emoticon Indicative votes plan for Thursday

Senior MPs are considering proposing an amendment to allow for a series of indicative votes on alternative forms of Brexit, writes the FT’s Seb Payne and Laura Hughes.

Conservative Oliver Letwin and Labour’s Yvette Cooper are contemplating amending tomorrow’s motion on delaying Brexit to give the House of Commons the opportunity to express its preferences on different forms of Brexit. These MPs believe there needs to be a purpose to extending the Article 50 process instead of continuing to debate the prime minister’s plan.

During Theresa May’s first attempt to pass her Brexit deal, an indicative votes amendment was tabled by Dominic Grieve, the former attorney-general. His plan would have suspended the rules of the Commons for several days to allow MPs to vote on softer forms of Brexit – such as a permanent customs union and continued membership of the EU’s single market. It lost, however, by 20 votes.

Downing Street says there are no plans at present for indicative votes, but that may soon change if MPs vote to reject a no-deal Brexit tonight. Asked if the government would grant a series of indicative votes, environment secretary Michael Gove told the Commons earlier (see previous posts): “I think that, depending on how the House votes today, we may have an opportunity to vote on that proposition tomorrow. But one of the things that I think is important is that we, as quickly as we possibly can, find consensus.”

According to these MPs, the ball is now in Mrs May’s court. They are seeking a clear process and a timetable for how indicative votes could be held. Otherwise they are ready to go with their amendment, which has a strong chance of passing.

Will house even get to vote on Spelman amendment?

The Speaker selected amendment A, put down by Caroline Spelman, which seeks to remove the threat of a no deal Brexit for good.

However, the government chose to whip against it. The Daily Telegraph’s polticial correspondent Jack Maidment now reports that pressure is building to prevent the amendment being voted on at all.

EU no deal preparations continue

Away from the UK debate over deal or no deal, EU member states are moving to ensure no disruption in any event.

Victor Mallet, the FT’s Paris bureau chief, writes that France is considering contingency plans to compensate fishermen for having to stop work in British waters in the event of a no-deal Brexit.

Didier Guillaume, French agriculture minister, said on Wednesday that “it’s possible that ‘no-deal’ will prevent all European fishermen from fishing in British territorial waters.”

He told Sud Radio: “That would be serious because many of our fisheries fish in those waters, and there’s no possibility of doing it elsewhere. So we’ve started to consider industrial solutions in the form of boat stoppages.”

Mr Guillaume said fishing boats that did 50 or 60 per cent of their fishing in British waters would no longer have the right to do so. Much of the industry is based in the Channel port of Boulogne.

“There will have to be economic agreements with the British, including for fisheries,” he said, adding that Britain “will remain an island 22km from Boulogne-sur-Mer and is not going away.”

EmoticonSpelman will not be able to move her no deal amendment

Dame Caroline Spelman says she believes attaining a big majority for the government’s motion ruling out no deal at the end of this month is more important than attaining a (potentially small) majority for her amendment. She says she will withdraw her amendment, one of two due to be voted on this evening.

Her amendment sought to rule out a no deal exit full stop – and had support from across the house. However, reports suggested she had come under pressure from the government, which planned to whip against it.

The speaker points out that other signatories may decide to move the motion without her, and that she cannot “withdraw it” at this stage.

Green says his amendment seeks to deliver ‘smooth Brexit’

Damian Green, who backed the deal last night, is explaining his decision to table the amendment effectively reviving the so-called Malthouse compromise. He says his principle aim with his amendment is to “make sure Brexit is as smooth as possible”.

Critics say the plan merely seeks to differ no deal, and has zero chance of being entertained by Brussels anyway.

Thin turnout for key debate

You might think that the House of Commons chamber would be brimming with MPs ahead of such a key vote. But you’d be wrong. Here’s the floor as it looked at 5:45pm.

Duncan Smith against no-deal motion

Tory Eurosceptic Iain Duncan Smith says he will not vote in favour of taking no-deal off the table, saying that there are plenty of deals already being discussed with Europe.

He supports a managed exit – via a whole series of agreements if necessary rather than necessarily a withdrawal agreement – and recommends the Malthouse amendement, which aims to replace the Irish backstop with alternative arrangements.

Duncan Smith would support an extension as long as it goes to either striking a deal, or setting up those agreements for a managed no-deal exit from the EU.

Theresa May forces the fantasists to face harsh realities

The FT’s Robert Shrimsley argues that the reason so many hate the prime minister’s deal is that it shows the perfect Brexit does not exist. But while the Tories will not forgive her for shattering their illusions, they may yet be forced to bend to her will.

For more, read here:

Withdrawal agreement “not negotiable”

French President Emmanuel Macron has said that the withdrawal agreement was “not negotiable”, writes the FT’s Victor Mallet, and reiterated that an EU agreement on any extension of Brexit beyond March 29 would depend on the British explaining why they needed the extra time.

“The solution to the current impasse is in London,” he said at a news conference in Kenya during a visit to east Africa.

If the British want a new postponement, that could be a technical delay to put in place the exit arrangements… It cannot be to renegotiate an agreement that we have negotiated for many months and which we have said was not up for renegotiation.

Europe must continue to advance. European citizens in the 27 other countries have decided to stay in Europe and move forward. We must not lose any time, because the world won’t wait for us.

Dromey opts not to push no deal amendment

Earlier Caroline Spelman announced she would not be pushing her amendment, which sought to rule out no deal (as opposed to government motion ruling out no deal specifically this month).

Now Jack Dromey, who co-tabled the amendment with Dame Spelman, has also decided not to push it to a vote, according to Sky News.

The logic appears to be that this evening should focus on March 29, and the chance to win a whopping majority against leaving without a deal on that date, rather than a far smaller one ruling it out completely.

The amendment, which had cross-party support, ran into trouble when the government said it would whip against it. That would have forced government ministers to defy the whip in order to vote for it.

One of the other signatories could yet move the amendment to a vote, although Yvette Cooper, one of its supporters, hinted she wouldn’t be doing it herself.

Sterling rises ahead of vote

Sterling is rallying to its highest level since Tuesday, writes the FT’s Adam Samson.
The pound is more than 1 per cent higher against the US dollar, hitting $1.3218 in recent trading. The rise means sterling has wiped out the loss it faced after it became clear yesterday that MPs would vote down Theresa May’s revised Brexit package.

Focus for traders remains on tonight’s vote on a no-deal Brexit, and the following one tomorrow about a potential delay in the UK’s break from the EU.

More from Spelman and Dromey

The two MPs who tabled an amendment seeking to rule out no deal for good have been speaking to BBC News after they both decided to hold fire.

Caroline Spelman, Conservative, says she decided not to push her amendment because the government’s motion will “reveal the true extent” of opposition to a no deal exit. It seeks to rule out no deal at the end of the month.

Labour’s Jack Dromey adds that there is no majority for no deal Brexit – “not now, not ever”. He expects an “overwhelming majority” for the government motion, and adds that it is now up to parliament to focus on agreeing a deal that can pass the house.

Spelman mentions that indicative votes may be coming (Michael Gove hinted at this earlier), and believes that could be how parliament finds its answer. She wants the two major parties to work together.

There is still a chance that someone else moves the amendment, we should find out soon.

Spelman amendment over no-deal set to go before MPs

MP Heidi Allen confirms a member of the break away TIG group of MPs will move the Spelman amendment, allowing lawmakers to decide whether to reject a no-deal Brexit at any time. This comes even after the proposers of the amendment – Caroline Spelman and Jack Dromey – said that they would not push it for vote tonight.

Fox wraps things up ahead of the vote

Liam Fox, international trade secretary, is up on his feet to bring the debate to a close. He begins by saying the public vote to leave the EU was “not a request, but an instruction”. He questions the motives of some who seek to extend the Article 50 process.

He then lays out the government’s position once more – essentially repeating the point that only a deal can end the threat of no deal. He reminds the house that an extension is in the gift of the EU27, and may only come at a price – “It is not an easy option for the house to take”.

Fox, a Brexiter, then paints a positive picture of the UK – with an economy that is strong, and preparations for no deal well advanced. “We need to keep some balance in this debate.”

He also takes up Yvette Cooper’s question from much earlier on whether the government’s motion will rule out a no deal exit on March 29. He says it does, but again says only a deal removes the threat of no deal.

And now to votes.

Brexit debate over – MPs leave to vote

Speaker John Bercow has called for MPs to vote on the first amendment – the Spelman amendment that rejects a no-deal Brexit at any time. Caroline Spelman did not want to move her amendment, but Yvette Cooper moved it instead. The government has whipped against the motion.

Cooper: simpler, clearer motion

Yvette Cooper says that she will vote for the main motion against no deal if the amendment is not passed. “But think it also helpful for house to have chance to vote for a simpler, clearer motion too.”

EmoticonAmendment A passes

The Spelman amendment, which seeks to rule out no deal, has been passed by 312 votes to 308. The government whipped against it.

Surprise defeat for government on no deal amendment

The result of the previous vote will come as a shock to many. The narrow margin – a majority of just 4 – suggests some ministers are likely to have rebelled and voted against the government whip. Resignations may then follow.

The amendment is not legally binding, so does not automatically change the process. It has no mechanism for avoiding no deal, and offers no further path away from one. No deal remains the legal default.

However, the vote is a clear indication that the Commons rejects leaving without a deal at any point in time. The government will now come under enormous pressure to take concrete steps to move away from no deal.

The amendment deleted specific references in the government’s own motion to March 29 – the deadline for leaving the EU under Article 50 (and UK law) – and simply states that the house rejects leaving without “a withdrawal agreement”.

The co-sponsors of the amendment – Caroline Spelman and Jack Dromey – had decided not to move it to a vote. But Yvetter Cooper pushed it anyway, making it double defeat for the government whips.

MPs are now off voting for amendment F, which effectively looks for a delayed no deal Brexit.

Cabinet ministers among abstainers?

The FT’s Laura Hughes has heard that four ministers abstained “with permission” on the Spelman amendment. The Commons will soon publish a breakdown of how MPs voted in a vote that the government had instructed its MPs to oppose.

Sterling stronger after amendment A passes

Sterling zipped more than 1 per cent higher on Wednesday, writes the FT’s Adam Samson, with a rally that began earlier accelerating after the Commons backed an amendment aimed at taking a potentially damaging no-deal Brexit off the table.

The pound was 1.3 per cent stronger from Tuesday at $1.3234. The rise erases a fall that came after Geoffrey Cox, the government’s chief legal adviser, said on Tuesday the new Brexit deal would not necessarily keep the UK from being stuck indefinitely in a customs union with the EU.

Sterling also posted robust gains on Wednesday against the common currency, up 1 per cent in recent trade.

The currency was up for much of the day, but it picked up momentum in the London evening after MPs in the House of Parliament narrowly voted for an amendment that is aimed at staving off a no-deal Brexit, which economists have said could deal a catastrophic blow to the British economy.

Emoticon Malthouse amendment rejected 164 to 374

MPs have voted against the second amendment – the Malthouse move that aimed to replace the Irish backstop with alternative arrangements. MPs are now voting on the government’s original motion – but because it has been amended it is no longer the official government line.

Rees-Mogg: law remains to leave on March 29

ERG chair Jacob Rees-Mogg is on BBC News, reminding everyone that the passing of the Spelman amendment is not legally binding, and in and of itself changes nothing. He calls it “a mere motion”.

He says, correctly, that the law still states that the UK will leave on March 29 without further legislation.

Government whipping against its own no-deal motion

The FT’s George Parker says that the government is instructing its own MPs to vote against the amended motion – setting up a potential clash with ministers who want to take no-deal off the table for good. Resignations might follow.

A government win would now mean that no-deal stays very much on the table for Brexit.

EmoticonMain motion approved 321 to 278

Another government defeat

The government whipped against its motion after it was amended. It lost. The likelihood is that ministers – perhaps from the cabinet – defied the whip, and may now resign.

Parliament has now given a resounding thumbs down to leaving the EU without a deal at any point, not just at the end of this month.

May: short extension to article 50

The PM says that the onus is to find out what the Brexit deal will be after the vote, saying that tomorrow parliament will be able to vote on a “short limited technical extension to article 50″.

But, she says, this is only likely to be offered if there is a deal in place, pushing her deal again after the short extension. She says that the UK should not seek a delay that would mean that it has to participate in the EU elections but “the house needs to face up to the consequences of the decision it has taken”.

Corbyn: article 50 extension now inevitable

Jeremy Corbyn points out that no deal and May’s deal have now both been rejected. An extension is therefore inevitable.

“Parliament must now take control of the situation,” he says.

He – and shadow Brexit secretary Keir Starmer – will now spend the next few days speaking to members of parliament to find a compromise that can find enough support to pass.

First resignation reported

Sarah Newton, a minister at the Department for Work and Pensions, is reported by other MPs to have resigned after defying the government whip over the no-deal vote.

EU: agree a deal or leave without

A spokesman for the EU said that there “are only two ways to leave the EU: with a deal or without”.

The EU is ready for both. To take no deal off the table, it is not enough to vote against no deal – you have to agree to a deal. We have agreed a deal with the Prime Minister and the EU is ready to sign it.

What just happened, and what happens next?

- The government proposed a motion rejecting no deal on March 29.

- Parliament voted to amend it so that it rejected no deal ever. This was a surprise.

- The government then tried to whip against its own (amended) motion. It lost.

- Theresa May will now bring her deal back again next week for another vote.

- If it passes, she will seek a short Article 50 extension to pass legislation.

- If defeated, she will seek a long extension and take part in European elections.

- Parliament will still vote tomorrow on whether to seek an extension either way.

Brexit delay until June or longer?

Speaker John Bercow has given the details of the government motion tabled for tomorrow. If by next Wednesday MPs have passed a Brexit deal then the government will seek an extension of article 50 until June 30. But if the deal is not passed, then the government will need a longer extension. This could mean that the UK would need to take part in European elections.

The motion says that if parliament does not pass a deal by March 20 then it is likely that the EU will require a clear purpose for extension.

Tory rebels sink May’s Brexit strategy

May had promised MPs a free vote on the main motion. Once it was amended, it then whipped against, but lost.

A number of cabinet ministers then defied that whip and abstained:

David Mundell, Scottish secretary
Amber Rudd, Work and Pensions secretary
David Gauke, Justice secretary
Greg Clark, Business secretary

All told, 17 Tory MPs rebelled on the main motion:

Guto Bebb
Richard Benyon
Nick Boles
Kenneth Clarke
Jonathan Djanogly
George Freeman
Justine Greening
Dominic Grieve
Sam Gyimah
Phillip Lee
Oliver Letwin
Paul Masterton
Sarah Newton
Mark Pawsey
Antoinette Sandbach
Nicholas Soames

Business leaders: just get on with it

Edwin Morgan, interim director general of the Institute of Directors, says that “after more than two years of repeated disappointments, business leaders once again find themselves at the mercy of politicians, hoping that compromise will finally win out”.

For far too long the real interests and concerns of employers and their staff have played second fiddle to the political psychodrama that our trading partners and competitors have been watching with bemusement.

The patience of companies has long since been exhausted. Our politicians just need to get on with it now.

Meaningful vote 3: do or die for May’s deal

Tonight’s vote, and the motion to be laid tomorrow by the government, sets up next week as the final crunch for Theresa May’s Brexit deal. She will bring it back to parliament for the third time, but now there it looks like a real ultimatum.

Tory Eurosceptics will face a simple choice: back the deal, or the government will seek a long extension that includes taking part in European elections in May.

Leaving without a deal remains the default in law. But the votes tonight show that parliament has the numbers to act and prevent it, even if that means postponing.

Tory party discipline has broken down.

The chances of Brexit being delayed indefinitely have risen sharply.

Pound at eight month high after vote

Sterling rose above $1.335 on Wednesday – the highest level since June 2018 – after traders were encouraged by the rejection of a potentially damaging no-deal Brexit by parliament.

Sterling also posted robust gains on Wednesday against the common currency, up more than 1 per cent at its highest level since May 2017. The pound was up for much of the day, writes Adam Samson, but it picked up momentum in the London evening after MPs in the House of Parliament voted to stave off a no-deal Brexit, which economists have said could deal a catastrophic blow to the British economy.

Cooper: need for indicative votes

Responding to tonight’s votes, Yvette Cooper said:

The House of Commons has voted decisively tonight against the chaos of No Deal. We are in this position because the Prime Minister has refused to consult or build consensus, and refused to allow votes on other Brexit options.

That needs to be urgently sorted out now. The Government should come forward with plans to hold indicative votes on different options, including a customs union, so we can get on with this. If the Prime Minister won’t sort this out and build some consensus on the way forward then Parliament will need to instead

Germany welcomes ‘signal of reason’

Heiko Maas, Germany’s foreign minister, has been reacting to tonight’s votes in London. He welcomed the “signal of reason that has just arrived from London”, and said it was clear that parliament was against leaving without a deal, which is in “nobody’s interests”.

But he added: “It’s time for the British to say exactly what they want to bring the Brexit deal to a successful conclusion, too. Because time is running out.”

Theresa May to lose her way to victory?

The FT’s political reporters agree that tonight could end up being good news for the PM – even if it stands as a defeat for her plans in the short term.

George Parker says that “each humiliating disaster for May in the commons this week brings forward the moment of reckoning for the ERG and DUP; I get the sense many will fold next week, especially after tonight’s No Deal vote. Is May losing her way to victory?”

Seb Payne says the conclusion from tonight’s vote: Theresa May has a real chance of winning Meaningful Vote 3.0 before next Thursday.

ERG and DUP to fall behind May?

In February, an ITV journalist reported a conversion he overheard between Theresa May’s chief civil servant Brexit adviser and colleagues in a Brussels bar.

The FT’s Laura Hughes writes that Olly Robbins was said to have suggested that he expected the choice for MPs to bottle down to either Mrs May’s deal, or the threat of extending talks with the EU.

Strangely enough, she says, that is exactly what appears to have happened tonight.

One member of the ERG admitted to her: “The only way out is for DUP and ERG to support PM deal. Otherwise chaos.”

Another Eurosceptic MP, who fears the prospect of a dramatic extension, says: “If Brexit gets blocked then we will have the most almighty scream of anger from the populace. MPs will then realise the mistake they have made.”

Will the Eurosceptics now back the deal?

The key question is whether the resistance of the Tory Eurosceptics will finally break now that the prospect of a long extension to Article 50 is real.

The early indications are that the hardliners will stick to their guns, but there is the potential for further splits.

Steve Baker, one of the leaders of the ERG – an anti-EU group of MPs – said this evening he had spoken to a number of pro-Brexit campaign groups.

“I will see to it that we honour what we owe to them, to keep voting this down however many times it is brought back,” he told parliament.

However, Jacob Rees-Mogg, ERG chair, was less definitive. This via the Guardian:

“There are discussions today in relation to what Geoffrey Cox has had to say to the DUP and, crucially, what may be put in the withdrawal and implementation bill which could have an effect on how people vote.”

Adding: “So I’m not the immovable object facing the irresistible force.”

May to return with extension vote on Thursday

That’s it from us, after another rip-roaring episode of the melodrama that is UK politics. We’ll be back again tomorrow for the next installment – a vote on whether to extend Article 50.

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