UK House of Commons Passes NI Protocol

Proposed legislation to allow the UK to unilaterally rip up Brexit arrangements for Northern Ireland at the risk of a trade war with the EU passed the second reading stage in the House of Commons on Monday night.

As for the market’s reaction, the GBP/USD pair extends retreat from over a week’s high towards refreshing intraday low near 1.2265 following the news.

Key Quotes

As expected the Northern Ireland protocol bill passed its first hurdle, with MPs voting 295 to 221 in favor despite heavy criticism from some Conservative backbenchers, including former Prime Minister Theresa May, who said the move is illegal and unnecessary.

The second reading was the first opportunity MPs have had to vote on the controversial proposals, which the Foreign Secretary, Liz Truss, said were “legal and necessary”.

The bill would create a “green channel”, free of checks, for goods passing from Great Britain to Northern Ireland that are not destined for the Irish republic; allow products to be sold in Northern Ireland under either EU or UK rules; and give UK ministers more power to alter tax and spending policies in Northern Ireland.

It is now expected to be fast-tracked through parliament with a condensed committee stage of just three days, instead of the usual two or three weeks.