A crucial Brexit debate is underway that threatens to derail the whole process

DANIEL LEAL-OLIVAS | AFP | Getty Images

Demonstrators holding EU and Union flags gather in front of the Houses of Parliament in Parliament Square following an anti Brexit, pro-European Union march in London on March 25, 2017, ahead of the British government’s planned triggering of Article 50.

But perhaps the most significant amendment to face a vote in the latest Commons reading is known as the “meaningful vote.” If passed, it would mean that a majority of both houses of parliament would have future veto power over whatever deal the government is able to win in the next few months of negotiations with the European team led by Michel Barnier. And this is where investors, business, and markets more broadly should be paying close attention. As of now, the British parliament does not have this veto power. But if the day arises when such a veto is wielded by a majority in either the Commons or the Lords, and if that happens close to the official Brexit date of March 29, 2019, there remains a rather ominous possibility — one that has long worried many economists and trade specialists.

This set of circumstances would be one in which the European side refuses to return to the negotiating table for whatever reason, most likely a lack of time, and in the absence of a confirmed agreement the United Kingdom is forced to exit the European Union in a disorderly manner.

This so-called “no deal” scenario has not received much serious planning, by the government’s own admission, and the mere threat of it could add a far greater level of caution into the government’s approach to Brexit, or indeed wreck it altogether. Supporters insist this amendment is a crucial test of parliament’s sovereignty, but you can be sure that government ministers will be tracking the result of this vote by vote. Markets participants would be wise to do so as well.

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