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UK Government loses legal challenge over Brexit



  • Following the Brexit Referendum a private legal challenge was mounted against the Government.
  • The challengers argued that Parliamentary approval (rather than prerogative power) was needed before Article 50 was triggered.
  • A High Court ruling yesterday agreed with the Challengers, throwing the Brexit timetable and the viability of the current Cabinet into doubt.


Who’s right?
Given Referendums are only advisory in nature, and sovereignty rests with Parliament alone, the case had merit. And yesterday’s ruling in the High Court, the three ruling Judges agreed.

The challengers maintain they are not contesting the referendum results, they just want legal process to be upheld.  Others suspect the campaign is partisan, but even if so, the case still deserves to be heard.

Parliamentary approval was required on the way in to Europe.  It should be required on the way out.
Rather than backing the down, the Government is taking the ruling to the Supreme Court in an attempt to get its way.  By digging in deeper they are potentially compounding the error of not calling an election the moment that May was anointed Prime Minister.

The fine line
While in the summer the new Cabinet felt it was riding high on the momentum of populist support, there is a fine line between democracy and demagoguery.

Had the Brexiteers had a clear plan for what happens next, there would not be a feeling of rushing headfirst into the unknown.

As winter approaches, the need for a cool tempered defence of the sovereignty of Parliament is hard for even the most committed Brexiteers to deny: particularly as sovereignty was at the heart of the Leave campaign.

Where’s the mandate?
The Conservative government had the referendum in their electoral mandate.  But not the mandate to act on its results.  Nor did the country vote for May to be Prime Minister May.  She should tread carefully.

Borrowed time
This leaves Prime Minister May with two unpalatable choices:

Either to call a snap election (she should have done this when she won the leadership contest) to confirm her mandate as leader and the mandate to trigger Article 50

Or to try to brush the inconvenient constitutional truth of Parliamentary approval by taking it to the Supreme Court.

Who’s afraid of an election?
The new Cabinet is scared of an election.  It could sweep them out of power and could push back further the decisive moment at which Article 50 is triggered as a new government reviews the position.

The toxicity in Westminster between Conservative factions means that the political body count of MPs with reputations smashed or jobs lost will continue to grow.  That is making the cabinet increasingly desperate.  And desperate politicians make bad choices.

Bottom line
Chances are this Cabinet will fall apart before Article 50 gets triggered, either through extended legal wrangling in the Supreme Court (not a pretty site) or in an attempt to win a mandate by calling an election. With their parliamentary majority so slim, and the dramatis personae so different there is no guarantee they would win.

[ENDS] 
NOTICES: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.  I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.
This article has been written for a US and UK audience.  Tickers are shown for corresponding and/or similar ETFs prefixed by the relevant exchange code, e.g. “NYSEARCA:” (NYSE Arca Exchange) for US readers; “LON:” (London Stock Exchange) for UK readers.  For research purposes/market commentary only, does not constitute an investment recommendation or advice, and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.  This blog reflects the views of the author and does not necessarily reflect the views of Elston Consulting, its clients or affiliates.  For information and disclaimers, please see www.elstonconsulting.co.uk

Image credit: clipart.co; Chart credit: N/A; Table credit: N/A
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