What next after Parliament delivers historic defeat to May’s deal?

To nobody’s surprise, the first reading of the Withdrawal Agreement was comprehensively trounced on Tuesday night as Theresa May’s government suffered the worst defeat in parliamentary history.

On Wednesday, the process which we’ve been speculating about for months gets underway as the government faces a No Confidence Vote at 13:00. Literally nobody knows where we are heading and all the five scenarios laid out last week, plus surely several more, are in play.

On-time Brexit rated less likely than ever

The most immediate effect, and emerging consensus, is that an on-time Brexit – leaving on March 29 – is extremely unlikely. Everybody familiar with the process believed the only way it could happen on time was for either May’s deal to be accepted, or no deal.

With neither option backed by anything like a majority in Parliament, Article 50 will surely have to be extended. Betfair markets concur, with leaving on time now rated merely a 17% chance at odds of 5.8.

First ‘no confidence’ vote almost certain to fail

Delaying, however, doesn’t even begin to answer the important questions. Nor will Wednesday’s no-confidence vote, which again virtually nobody believes can win. Our market shows odds of just [1.04] about the government winning it, with MPs expected to split along partisan lines. A separate market on the number of government opponents backing the motion rates 310-319 odds-on at 1.41 – the total of MPs representing all parties bar the Tories and DUP.

The immediate impact of today’s vote will be some momentary respite for the Tories. Expect an hour or two of gloating at Corbyn’s stupidity for calling a vote he couldn’t win before reality sinks in. This will probably be only the first of several no confidence votes in the government and they will become ever harder to win, so long as the government doesn’t have a solution to take Brexit forward.

Workable Plan B unlikely to materialise by Monday

The next key day is Monday, when the PM must present her Plan B to parliament. I can’t see that plan involving much more than vague slogans about ‘reaching out to opposition parties’, talk of ill-conceived, unrealistic alternative deals and pressing the EU for illusory concessions. The EU continue to show little or no interest in renegotiating.

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