Brexit Bulletin: Back to Square One

(Bloomberg) -- Today in Brexit: A day of drama leaves us no further ahead.

For a moment last night it looked like Theresa May might just pull it off. 

The prime minister played her best, and one of her last, cards, offering the Brexiteers her job in return for their votes for her deal. Then her so-called allies in the Democratic Unionist Party played theirs and it was a trump: The Northern Irish party refused to back her plan.

May’s wasn’t the only failure in another frantic day in Westminster. Parliament also failed to find a majority for any kind of Brexit. Still, legislators came close. A proposal to stay in the European Union’s customs regime—the lowest common denominator of soft Brexits—got within eight votes of victory. When Parliament comes back on Monday for a second round of voting on Brexit options, a customs union looks set to top the shortlist. 

What can May do now? She can threaten a general election that no one really wants, in a final bid to get her deal over the line. Or she can tell lawmakers she’s going back to Brussels to ask for a long extension of membership. That means spending another year fighting over what Brexit means, with the implicit risk that the divorce might be abandoned in that time. The most-voted option last night was the idea of a referendum on the deal, a fact that should concentrate Brexiteer minds.

The problem May now faces is that threats that might scare Brexiteers into backing her, such as a soft Brexit or a long extension, have the opposite effect on moderate, pro-EU Tories and potential backers on the Labour benches.

The prime minister must decide on Thursday whether to bring her unpopular deal back for one more vote on Friday. It’s the last chance she has to get it approved and lock in the May 22 exit day the EU penciled in last week.

A day of high drama left us back at square one. May doesn’t have the votes, and Parliament is still too divided to take control. Unless May goes back on her word not to lead Britain into no-deal limbo without Parliament’s consent, a general election, with Brexit postponed, looks increasingly likely.

Today’s Must-Reads

• Brexit’s Alice in Wonderland logic continues. The latest twist: “If Theresa May succeeds in at last shepherding her deal through Parliament, she has to resign. If she fails, she can stay,” writes Bloomberg’s John Authers.
• The Times backs May’s decision to quit: “The country will want a dynamic reformer who can bring Britain together, not another divisive figure.”

Taking back control was always a delusion, writes Martin Wolf in the Financial Times. The UK is a (large) minnow in a very big lake.

Brexit in Brief

Labour’s Referendum Stance | In the chaos of Wednesday, one of the interesting things we learned was that Labour backs the idea of a referendum on a Brexit deal if it’s a Tory plan, but not if it’s an accord that Labour has negotiated.

You Can Stay! | EU chief negotiator Michel Barnier said “all possibilities” remain for the U.K. until decision day on April 12—including remaining in the bloc. European Council President Donald Tusk appealed to the European Parliament to consider a long extension for the U.K.

No-Deal Ferries | Britain’s no-deal flotilla is getting ready to set sail, shuttling trucks carrying critical goods into the country starting Friday. The ferry contracts, totaling £89 million ($118 million), are meant to guard against shortages of items like medicines, vaccines and blood, along with spare parts for the energy sector and essential chemicals.

Not So Fond Farewell | The U.K.’s last full session in the European Parliament was marked by an exchange of insults between Nigel Farage, the leading Brexit campaigner, and Guy Verhofstadt, a former Belgian premier who leads the assembly’s response to Brexit. “You remind me more and more of Field Marshal Haig in Blackadder,” Verhofstadt told Farage. Farage shot back: “You should know that it was Field Marshal Haig in 1914 who saved the Belgian town of Ypres from German domination. He should be a great hero to you.”

Contempt of Parliament | Dominic Cummings, the director of Vote Leave during the referendum campaign, was found in contempt of Parliament for refusing to answer lawmakers’ questions during an investigation into fake news. The Brexit mastermind, played by Benedict Cumberbatch in a recent TV drama, is known for his combative style. He repeatedly refused to appear before a parliamentary committee that wanted to ask him about targeted online advertising after allegations that private Facebook data may have been misused.

Meanwhile in Brussels | EU ambassadors in Brussels meet at 10 a.m. to discuss the state of Brexit talks. 

On the Markets | The pound fell after the DUP delivered its coup de grace and Parliament failed to produce a majority for any Brexit alternative. It traded at $1.3185 early on Thursday.

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Adam Blenford

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