The UK Supreme Court’s ruling did not come as a surprise, but was a strong reminder to the government that it is accountable to Parliament. However, Prime Minister Theresa May is adamant that the decision will not derail her end of March timetable to trigger Article 50, although opponents could try to change her roadmap.
This does not mean the end of Brexit. With a working majority of 15 in the House of Commons and a complicit Labour Party, the Tories have the upper hand and the bill is guaranteed to pass. The ruling enables Labour as well as the Liberal Democrats and Scottish National Party MPs to discuss a variety of issues and make amendments to the legislation put forward.
Key issues are likely to be around the type of Brexit, including economic and single market access which May already highlighted would have no place in her hard exit from the European Union. While the final draft is difficult to predict, banks and other financial service organisations are likely to continue to cast around for locations outside the UK as the politicians hash it out.
Equally as important, the debate will continue over the future of London’s prized multi-billion euro clearing business. Just days after May’s speech outlining her Brexit plans last week, the European Central Bank poured cold water over the financial hub’s hope of keeping the business. Benoît Coeuré, a member of the ECB’s executive board, said in an interview with CNBC it would be “challenging” for Britain to devise post-Brexit regulations that would provide sufficient confidence for UK-based clearinghouses to continue to process trades in the euro.
France and Germany are the two most likely candidates. It is to be seen whether they will succeed and if legislative measures in the EU will be put forth to move the clearing of euro-denominated derivatives and other financial.
