The Pound Sterling slumped this morning following an advance leak to senior journalists that Prime Minister Boris Johnson is planning to prorogue (temporarily cease) Parliament in order to force through Brexit and potentially a no-deal exit.
The rumours first broke at 7:40am today and the knock to investor confidence has caused Sterling to fall from $1.2277 to $1.2192 – the lowest value against the US Dollar in six days. Number 10 Downing Street has since issued a copy of the Prime Minister’s letter to MPs stating that he will end the current session of Parliament in the second week of September, and resume proceedings mid-October after the Queen’s Speech.
The gold price in Sterling has risen £1,252 per ounce to £1,263.82 per ounce, peaking a little higher at £1,266 mid-morning. If the Pound continues to weaken then the domestic gold price should rise further, and we could see the Sterling price record of £1,271.75 per ounce broken – barely more than two weeks after it was set.
What is prorogation?
Prorogation is a common and semi-regular practice used by government. The act of prorogation is the closure of a parliamentary session, and is the official name given to the gap between the end of one term and the start of the next. The responsibility falls upon the Queen to give assent to the motion, upon the advice of the Privy Council.
The PM will be interested in proroguing Parliament because by dismissing both the Commons and the Lords, no unanswered motions or Bills without Royal Assent can be processed. The system of legislating comes to a halt, but the government themselves can continue to operate.
This allows Johnson to proceed with Brexit and make a serious push to leave without a deal. The move itself could be a ruse to force the European Union to act and offer a new deal – a lesson in bluff-calling that would certainly give the PM a surge in popularity with Leavers – but it would also curtail the ‘Remain Alliance’ bid to block a no-deal Brexit.
The following tweet of insight from Robert Peston shows a potential line of government thinking:
“we'll dissolve Parliament and have an election between 1-5 November -- and that means no time for legislation”. Flippin’ ‘eck.— Robert Peston (@Peston) August 28, 2019
Can the Prime Minister do this?
Yes, he can, but it would be a risky approach to dodge Parliament that will likely alienate those in his own party who are uncertain about a Hard Brexit.
The concern for many is that Boris Johnson, who was only elected as Prime Minister by only a few hundred-thousand Conservative Party members, is proceeding with a Brexit that was never specified at the time of the 2016 Referendum and could be damaging to the UK in terms of economic stability. The choice of Leave never specified a complete cut of ties to the European Union; a degree of economic shift that has left investors wary of backing British businesses and many firms, especially car manufacturers, keen to step away from the UK. The markets have repeatedly seen sharp volatility when news of a no-deal or Hard Brexit comes out, with investors not keen for the UK and the EU to just abruptly cut trading ties and damage supply routes between the two.
It would be a constitutional outrage if Parliament were prevented from holding the government to account at a time of national crisis. Profoundly undemocratic.— Philip Hammond (@PhilipHammondUK) August 28, 2019
The Brexit referendum did pass though, even if it was a slim 52-48 vote margin, and there are those who believe Boris Johnson is simply mirroring opponents by finding a clever solution in the rules of Parliament. Journalist Iain Martin argues below that Boris’ behaviour is no different to that of Caroline Lucas, Ian Blackford, or Jo Swinson.
When Stop Brexit crowd manipulate procedure (trying to make the Commons be the executive) and pledge to use any means necessary (other than, you know, voting for a sodding Brexit deal) they self-define as noble. When Johnson fights back that's a "coup". Apparently.— Iain Martin (@iainmartin1) August 28, 2019
While the government is planning for proroguing Parliament in the second week of September (well before the Brexit deadline), Speaker John Bercow has repeatedly said that such a move would be undemocratic and defeats the purpose of parliamentary representation, and the latest inkling is that Bercow will consult with his own team of clerks and legal experts to potentially restrict the PM’s actions should they be pursued.
Statement from Speaker’s Office 🚨🚨💥💥 pic.twitter.com/BGSYCcpxjB— Jayne McCormack (@BBCJayneMcC) August 28, 2019