Theresa May’s Brexit plan has failed. What next?

Theresa May’s Brexit deal has been defeated by 230 votes — the biggest government defeat in history.

MPs voted down Theresa May’s Brexit deal yesterday — by a stunning 432 to 202 votes.

The proposal on Britain’s future relationship with the European Union came out last November, after almost 2 years of negotiation.

It provides for a transitional period until the end of 2020, with many of the existing arrangements staying in place. The deal also includes the Irish ‘backstop’, which proved controversial and may have contributed greatly to Mrs May’s defeat in the Commons.

The ‘backstop’ is a measure designed to avoid a hard border between Northern Ireland and the rest of the Irish mainland. It ensures that there will not be any physical border infrastructure on the island, even if future talks fail to produce a free trade agreement.

Following the historic loss, opposition leader Jeremy Corbyn tabled a motion of no confidence in Mrs May’s leadership. The vote will be held later today.

If she wins the vote, it’ll be business as usual.

But if she loses, things will escalate quickly. The Cabinet would have to resign and there would be a period of 14 days in which a new government can be formed.

The new government would have to get the confidence of the Commons for business to go on.

Mrs May could attempt to hang on and try to form a new government. She has greater support among her own Tory MPs after a party revolt failed last December. Party rules do not allow another challenge for the next 12 months.

However, she may decide it is time to hand the reins over to someone else. A new Tory leader would then have the chance to form a government, as would opposition parties.

The current makeup of Parliament allows Tory MPs to easily gain control of the House with their numbers, so it is unlikely that opposition parties will stand a chance.

On the off-chance that no government is able to get confidence of the Commons in those two weeks, then Parliament will be dissolved, and a general election called after 25 working days.

The UK is running out of time to work out Brexit terms, making it more likely to ask Brussels for an extension. The EU has expressed a willingness to grant one, but penalties may be involved on the UK’s part.

There is also an increased chance of a no-deal scenario, if ultimately all efforts at negotiation fail.

The UK is now forced back to the negotiating table to try to get a better deal, even though EU leaders have made it quite clear that the deal is not up for renegotiation.

European Council President Donald Tusk suggested that the UK should stay in the EU after the results were out.

“If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?”, he asked on Twitter.

Property consultancy CSI Prop projects a positive outlook for the long-term future of the UK property market after Brexit, even in the case of a no-deal, and says that the current situation is an opportunity for investors.

The Sterling rose 1.5% against the dollar to $1.29. Could this be the final chance for investors to take advantage of the low pound?

Sources