Parliament (2)

The UK Supreme has ruled that the government cannot trigger Article 50 without an Act of Parliament.

It's called the constitution. In the UK, there is a thing called the law, and a system of government called the constitution. Today the Supreme Court upheld the decision of the High Court that not even a referendum takes precedent over that.

Supreme Court President Lord Neuberger said: "By a majority of eight to three, the Supreme Court today rules that the Government cannot trigger Article 50 without an Act of Parliament authorising it to do so."

To proceed otherwise would be a breach of settled constitutional principles

He added: "The referendum is of great political significance, but the Act of Parliament authorising it did not say what would happen afterwards . . . So any change in the law to give effect to the referendum must be made in the only way permitted by the UK constitution, namely by an Act of Parliament. . . To proceed otherwise would be a breach of settled constitutional principles stretching back many centuries."

Paul Hollingsworth UK Economist at Capital Economics said: "As a result of the ruling, in order to stick to its intended timetable of triggering Article 50 before the end of March, the Government must get a bill through Parliament in the next two months. Although Mrs May was able to get a majority of MPs to vote in favour of a motion to accept the government’s timetable back in December, this has no real legal standing. So the forthcoming Article 50 bill must getthrough the House of Commons again, as well as the House of Lords. "

But getting parliament to ratify Article 50 is just a formality, right?

Paul Hollingsworth said: "Given that the Liberal Democrats openly oppose Brexit taking the UK out of the Single Market, and Labour is unlikely to get on board with threats to turn the UK into a tax haven in the event of a bad deal, it is unlikely that the Article 50 bill will sail smoothly through Parliament. Indeed, amendments to the bill look likely, and could prove politically challenging for Mrs May."

David Lamb, head of dealing at FEXCO Corporate Payments expressed similar sentiments, saying; "With the Labour Party calling for amendments and the Lib Dems pledging to vote against article 50, it’s clear that the government faces a rocky road ahead. Piloting such a controversial piece of legislation through parliament was always going to be tricky – but in the face of such determined resistance from the opposition benches, it will be a Herculean task."

The pound

Currency markets saw some volatility on the announcement, with the pound falling modestly against the euro and dollar.

David Lamb observed: "Rarely do the currency markets get so engrossed by legal argument."

He said “While the markets had correctly predicted government’s defeat in the Supreme Court, many were taken unawares by the scale of the mountain that Theresa May must now climb – and by the size of the Scottish spanner being placed in the works." He explained: "Though the Supreme Court unanimously rejected the Scottish government’s attempt to be formally consulted on the triggering of article 50, the Scottish National Party has set itself on a collision course with the Westminster government over Brexit."