U.S. markets open in 35 minutes

Theresa May's Brexit Plan Defeated in Parliament, Leaving Government Up In The Air

Dave Royse

The British Parliament on Tuesday rejected Prime Minister Theresa May’s Brexit plan for leaving the European Union, a stunning defeat leaving Britain’s withdrawal from the common market up in the air.

The vote was 432-202 against May’s plan, leaving in question how – and even if – the U.K. will pull out of the EU as voters decided by a 52 percent to 48 percent margin in 2016. The law sets March 29 as the date for the Brexit, which doesn't change.

May had warned members of Parliament before the vote that if they rejected her plan, it would be increasingly likely Britain would not leave the EU at all, rather than try to separate from the European trading bloc without some sort of deal spelling out the details of the arrangement.

The pound surged against the euro shortly after the vote hit newswires.

A New Government?

The vote could lead to a new government in Britain, with members of the Labour Party calling for a vote of no confidence in May that could lead to a new general election.

Some in the opposition Labour Party have talked of holding a new nationwide referendum, but so far there isn’t enough support for that in Parliament, and the Labour Party leader Jeremy Corbyn is among the opponents of a re-vote. May also could ask the EU for an extension of time, but that would need approval of all 27 EU member states.

May also had warned rejection of the plan could strengthen of those who support independence for Scotland, and will renew questions about the border between Northern Ireland, which is part of the U.K., and the Republic of Ireland, though Irish government officials said Tuesday the border would remain open.

A new plan must be agreed with Europe and presented to U.K. lawmakers by the close of business on Jan. 21.

Related Links:

May Says Government Has 'Duty To Deliver' On Promise

No Brexit Option Is Not Enough To Support Sterling Amid Slowing Activity

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.