Sterling plunges as Theresa May survives night of votes with new mandate to ditch backstop

MPs rejected several attempts to defeat Mrs May’s government and seize control of Britain’s Brexit process

A pro-EU campaign bus drives past a Vote Leave supporter outside parliament in London.

Sterling plunged last night after Theresa May survived a night of votes on her Brexit policy which still left Britain staring at a no-deal exit from the European Union.

Five of seven votes failed in the House of Commons that would have imposed conditions on Mrs May's government to either extend the period of time before Britain left the union or else forced her to accept the verdict of Parliament.

One amendment that did pass excluded a 'no-deal' Brexit – backed by 318 to 310 MPs – and is not binding on Mrs May. After the votes, the pound fell about 0.8 per cent after hitting a two-and-half month high recently.

The key amendment, put forward by the influential MP Graham Brady and passed by 317 votes to 301, called for the controversial Irish border arrangement – the backstop – to be replaced with unspecified "alternative arrangements".

The Irish backstop is an insurance policy that aims to prevent the reintroduction of a hard border between Ireland and the British province of Northern Ireland, a crucial part of a 1998 peace deal that ended decades of sectarian violence, and preserve frictionless trade.

Mrs May survived what were believed to be the most contentious votes of the night thanks to around a dozen Labour MPs from mostly Northern leave-supporting constituencies, who voted with the government to defeat amendments.

“Tonight, a majority of honourable members have said they would support a deal with changes to the backstop,” Mrs May said, only two weeks after her divorce deal was crushed in the biggest parliamentary defeat in modern British history.

“It is now clear that there is a route that can secure a substantial and sustainable majority in the house for leaving the EU with a deal,” Mrs May said, adding she would seek “legally binding changes”.

However, before she had even delivered her speech to the House of Commons early on Tuesday afternoon, she had been told by the president of the European Commission, Jean-Claude Juncker, that there would be no concessions from the EU on the backstop.

Speaking immediately after the vote in parliament, a spokesman for European Council president Donald Tusk said the backstop was part of the withdrawal deal and not up for negotiation, a stance echoed by the Irish government.

"A bit of realism is needed at this stage,” said Irish European Affairs minister Helen McEntee. “This is a deal which was negotiated with the UK, by the UK, signed off by the UK and the prime minister – and now it looks as though this evening, essentially, there is a row-back and a reneging on the commitments that were made.”

French president Emmanuel Macron’s said there could be no re-negotiation and demanded a “credible” British proposal.

Mrs May appears to have caved in to the large contingent of sceptical MPs in her party, namely the European Research Group. "The backstop is not going to get through this parliament," Steve Baker, a leading member of the group, said. "Change the backstop, fix the date of the end of the implementation period, and agree a plan C."

However, EU diplomats played down May's chances of being able to present a substantially different deal to the British parliament in a decisive vote expected to take place on February 13.

“May will now come back to Brussels and be rebuffed,” one diplomat said. “The House of Commons will have to vote again mid-February on plan C. And it will have to be plan A all over again, but with even more pressure of no-deal Brexit looming.”

Opposition Labour Party leader Jeremy Corbyn said he would meet May to “find a sensible Brexit solution that works for the whole country”, listing changes that Labour wanted to see, but that Mrs May has shown no sign of supporting.

“This isn’t a good night for the country,” Labour MP Wes Streeting tweeted.

“The prime minister voted against her own deal to go back to Brussels for something she's said is impossible. MPs voted against ‘no-deal’ – but also voted to make ‘no deal’ more likely. We’ll be back for another round of Groundhog Day soon.”