May Survives Confidence Vote; Final Tally Is 200-117

Update 4: During a brief address to her Tory peers after the results were announced, May said that she had listened to her critics, but that now it is time to 'get on with it' and pass a Brexit withdrawal treaty.

Here’s the full transcript of the short speech Theresa May has just given outside Number 10 (courtesy of the Guardian):

This has been a long and challneging day. But, at the end of it, I’m pleased to have received the backing of my collegaues in tonight’s ballot. Whilst I’m grateful for that support, a significant number of colleagues did cast a vote against me and I have listened to what they said.

Following this ballot, we now need to get on with the job of delivering Brexit for the British people and building a better future for this country – a Brexit that delivers on the vote that people gave, that brings back control of our money, our borders and our laws, that protects jobs, security and the union [and] that brings the country back together, rather than entrenching division. That must start here in Westminster with politicians on all sides coming together and acting in the national interest.

For my part, I have heard what the House of Commons said about the Northern Ireland backstop and, when I go to the European Council tomorrow, I will be seeking legal and political assurances that will assuage the concerns that members of Parliament have on that issue.

But, while delivering Brexit is important, we also need to focus on the other issues that people feel are vital to them, that matter to them to day to day – the issues that we came into politics to deal with. Building a stronger economy, delivering first class public services, building the homes that families need. We owe it to the people who put us here to put their priorities first.

So, here is our renewed mission: Delivering the Brexit that people voted for, bringing the country back together and building a country that truly works for everyone.

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Update 3: It's official: May has won the leadership contest. 200 backed her while 117 voted against.

Chart

(Courtesy of the Guardian)

Analysts said that if more than 100 Tories voted against May, it could create problems for her government and draw her credibility as prime minister into question.

Sterling has started moving lower on the result (though it remains up on the day), as traders are correctly assessing that this doesn't bode well for May's Brexit deal (though she did receive more votes of support than when she was first elected prime minister, that margin improved by a mere 5 votes from 195 to 200).

GBP

As ITV's Robert Peston pointed out, more than half of the independent Tory MPs (that is, those who don't hold a post in the government), voted against the prime minister, which hardly inspires confidence.

As Bloomberg's David Goodman points out, this doesn't bode well for May's Brexit deal.

Assuming those 117 Tory MPs will vote against May's Brexit deal (obviously not a given), that result bodes pretty badly for her chances of getting it through Parliament.

Already, May's intraparty rivals are piling on...

  • EUROSCEPTIC LAWMAKER REES-MOGG SAYS THIS IS A TERRIBLE RESULT

Labour Leader Jeremy Corbyn said the vote this evening makes no difference to British people, according to Bloomberg.

"The Prime Minister has lost her majority in Parliament, her government is in chaos and she is unable to deliver a Brexit deal that works for the country and puts jobs and the economy first."

May will now return to Brussels on Thursday without the strong mandate she had hoped to win. She will face off against EU leaders with "her leadership shaken and leaving behind a bitterly divided party," according to the Financial Times.

And while May's most ardent supporters wasted no time hurling insulates at some of the Brexiteer leadership...

Neil O’Brien, a moderate Tory MP, called some of his colleagues "headbangers," while industry minister Richard Harrington said of the Brexiters: "They have shot their bolt. They are a minority within a minority. They are like student union kids."

James Cleverly, deputy Tory chairman, said Boris Johnson, the ambitious former foreign secretary, had wasted his money getting a "leadership haircut."

He said: "That’s £7.50 he’ll never get back."

...Aa one Brexiteer noted, May's victory "doesn't change anything".

But the contest does not change the ultimate dilemma facing Mrs May: she still needs to find a way of winning parliamentary backing for a Brexit deal that she has promised to resubmit to MPs before January 21.

A pro-Brexit minister said: "This doesn’t solve anything. The PM will go to Brussels, get some tweaks to her deal and in mid-January we will be back here again and it will be the same crisis because the House won’t vote for it."

With May's status as prime minister secure (for now, at least), readers might be wondering: What happens next?

While nobody can say with any certainty how this might impact negotiations with the EU (and with MPs in the Commons), Bloomberg has published a handy guide reminding us of the key factors at play:

1. What deal did May strike?

It’s the most important international agreement for Britain since the end of World War II. Negotiated over 17 months, the deal sets out the terms of separation that allow the U.K. to depart the EU on March 29 in an orderly fashion, with a 21-month grace period to give everyone time to adjust. Alongside is a political declaration that specifies that the two sides want close economic and trading ties, though the details will take years to work out. As things stand, the U.K. would leave the EU’s single market, and free movement of people would end. EU citizens in Britain before Brexit would be able to stay, and vice versa.

2. Why are British lawmakers balking?

The main objection is to guarantees May has offered the EU to make sure a new physical border doesn’t emerge between Northern Ireland, which is part of the U.K., and the Republic of Ireland, which remains in the EU. Critics say the pledges - which constitute what’s known as the "backstop" - risk binding the U.K. to EU rules forever. They argue that May caved to the EU and betrayed the electorate’s call to regain sovereignty, while treating Northern Ireland differently from the rest of the country. Though May survived a Conservative Party challenge to her leadership on Dec. 12, there’s still opposition on all sides: pro-Brexit hardliners in her party, other Conservatives who are pro-EU, the Northern Irish party that’s been propping up the government and nearly all of the opposition Labour Party.

3. Will the EU offer May a better deal?

She’s visiting Brussels to try to extract what would probably be nothing more than token concessions. There’s a summit on Dec. 13-14 where EU leaders will hear her case, but they have been pretty clear they don’t want to reopen the negotiation.

4. So where does that leave things?

That’s murky. In deferring a planned vote in Parliament on Dec. 10, May said that Jan. 21 is the deadline for putting a tweaked deal to a vote. In the interim, she could announce a host of measures for a no-deal Brexit in an attempt to frighten lawmakers into backing her. (Investors are betting that a deal will be done eventually, possibly after an adverse market reaction.) Or the Cabinet could decide to adopt a new approach to Brexit, in an attempt to win a majority for a deal in the House of Commons. That would almost certainly mean trying to keep closer ties with the bloc. Other scenarios: May’s opponents in Labour could push for a general election, but it’s not clear that would succeed. May could call an election. Or lawmakers could try to trigger a re-run of the June 2016 Brexit referendum. For now, there’s not enough support in Parliament for a second referendum, but that could change.

5. What’s a no-deal Brexit?

There’s a chance that if the deal is voted down, Britain would crash out of the bloc on March 29 with no agreement or grace period. That would leave the U.K. with no legal arrangements to smooth trade and other transactions with its neighbors, snarling cross-border commerce and freezing markets. Bottlenecks could bring shortages of everything from food to drugs and manufacturing components. But the no-deal scenario is probably becoming less likely as Parliament is being increasingly assertive in trying to prevent it.

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Update 2: Conflicting views are emerging as to the number of votes needed for May to declare the overwhelming victory she needs to maintain credibility in her government and hold on to any hope of passing her Brexit plan. Some analysts are saying that anything more than 100 votes of no confidence could be market negative, while others say that any more than 109 votes against - which was the margin from when she was voted in as prime minister - is the magic number.

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Update: While the final results of today's no confidence vote haven't been officially released, it looks like somebody has already leaked a preliminary total to the Telegraph.

May reportedly received 176 votes of support, which is a strong showing of support (as RanSquawk noted, that's a stronger showing of support than she received when she was elected prime minister following the resignation of David Cameron).

If this result is confirmed, it would suggest that May did indeed strike a deal with the Brexiteer faction of her party to win their support in exchange for promising to step down before the next general election (set for 2022).

But not everybody believes this would be a strong enough vote of support to appease the markets and stop May from stepping down. According to a rumor reported by the BBC, May's predecessor David Cameron and his team had agreed before the Brexit referendum that, if he did lose, and a no confidence vote was called, he would resign if he received more than 60 votes of no confidence. Cameron, of course, didn't wait around for a vote to be called.

May is waiting for the final vote total at No. 10. If the final total matches the number leaked to the Telegraph, UK markets should rally as May cannot face another leadership challenge from within the Conservative Party for at least a year. However, her political adversaries across the floor are still plotting to call a no confidence vote in her government, which could force another general election if successful.

The mic has come out at No. 10, suggesting that May will deliver "another podium moment" after the final vote tally is released.

* * *

With her Brexit deal facing almost certain defeat in the Commons, opposition parties threatening to bring down her government and European leaders refusing to reopen negotiations on the withdrawal treaty, Prime Minister Theresa May is heading into Wednesday's intraparty no confidence vote - which began only moments ago - in a tough position.

She has no obvious path forward that would stave off a 'no deal' Brexit (well, aside from hoping that an adverse market reaction and attendant political pressures inspire a change of heart in her MPs) and though she's expected to survive the vote, the tumultuous Brexit negotiations have hamstrung her government and deadened her political future.

Which is probably why May revealed during a speech at the 1922 Committee meeting held before voting begins at 1 pm that she will not seek another term as prime minister during the next general election in 2022. Her announcement, which confirmed hints from earlier out of No. 10, caused some ministers to weep.

However, analysts said the timing of May's announcement suggests she has made a back-door deal with Tory MPs to secure their votes in exchange for her stepping aside after the process of Brexit is complete (it's also an acknowledgement that she wouldn't be the best candidate to lead the Tories in the next vote after all the Brexit-related sniping has diminished her popularity.

May

As she entered the meeting at around 5 pm London Time (noon in New York), the prime minister was greeted with loud banging - a sign of support. To stay on, May needs to win a simple majority of the 317 Tory MPs eligible to vote in Wednesday's secret ballot. The consensus view is that May will prevail in Wednesday's vote (nearly 200 MPs - far more than the 159 vote needed to prevail - have publicly pledged to vote for her). And so far, she's put on a  After returning from her "whistlestop" tour of the Continent, May came out swinging on Wednesday, saying she'd fight to stay on "with everything I've got" before battling with her archrival, Labour Leader Jeremy Corbyn, during a contentious session of PMQs.

Here's the timeline for Wednesday's vote:

  • 5 p.m. - May addresses a meeting of the 1922 Committee -- the name of the caucus of Conservative MPs. The meeting is closed, but from outside, we'll be able to hear cheering, banging desks and so on. We expect her to promise not to fight the next election

  • 6 p.m. - MPs begin voting. They can vote by proxy, and it's a secret ballot. So all those public expressions of loyalty may not be worth much

  • 8 p.m. - Voting finishes. Graham Brady, chairman of the 1922 Committee, begins counting

  • Before 9 p.m. - Brady announces the result

During a round of questions after her statement, May told lawmakers that she's still working on making the Irish Backstop - the most controversial component of her Brexit deal - more palatable to DUP MPs who have threatened to vote against her bill, and possibly even join Labour in a vote of no confidence in May's government.

The prime minister's pitch to MPs is that ditching her now could mean delaying Brexit, or possibly even no Brexit at all.

But while traders are pricing in a May victory as a virtual certainty, there are some subtle signs that an upset could be in the offing (analysts suspect that May could resign if she survives by only a narrow margin). Brexiteers affiliated with the European Research Group (the faction led by Jacob Rees-Mogg) wouldn't have gone to the trouble of orchestrating the vote if they didn't feel there was something to be gained from it. According to Telegraph Deputy Political Editor Steven Swinford, that something might be surpassing the 80-vote threshold, which would signal that at least half of Tory MPs who don't have formal roles in the government are opposed to May's leadership.

Still, online betting markets expect May to win easily. Ladbrokes put odds of May staying on as leader at 2/7 shortly before the vote, while they see 5/2 odds that she is ousted.

Should May lose or resign, the race to succeed her has no clear front-runner, though former Foreign Secretary Boris Johnson is the most popular and best known among the contenders.

Infographic: The most popular political figures in the UK | Statista

You will find more infographics at Statista

The likely candidates include:

  • Boris Johnson

  • Sajid Javid

  • Michael Gove

  • Amber Rudd

  • Penny Mordaunt

For what its worth, the pound has reacted positively to reports that May likely has the votes to prevail as the British currency erased its losses from Tuesday. However, the cost of insuring against one-day moves in the currency has spiked. This suggests that traders are bracing for big swings in the pound tonight once the results are announced.

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