Brexit Bulletin: Truth or Trap?
Brexit Bulletin: Truth or Trap?
(Bloomberg) -- Today in Brexit: Something had to give, and now we know what it is: Theresa May’s resolve.
For months the U.K. prime minister defied her many critics, insisting that the Brexit deal she hammered out with the European Union was the only viable blueprint for divorce. Now, as Rob Hutton spells out, Theresa May says she’s ready to talk about a new approach.
May has tried three times now to pass her deal through the House of Commons, suffering three convincing defeats. With days remaining before a no-deal Brexit on April 12, May appeared to turn on a sixpence Tuesday evening. It was a bid to, as she put it, “break the logjam.”
Speaking in Downing Street, May proposed talks with Labour Party leader Jeremy Corbyn to find a way out of the Brexit impasse. Corbyn, for his part, said he’s “very happy” to meet the prime minister.
May’s plan has four parts:
- Agree on a joint plan with Labour to ensure that the U.K. leaves the EU with a deal
- Put that plan to Parliament, win approval, and present it to EU leaders at a Brussels summit on April 10
- Propose joint options for the House of Commons to vote on if they can’t agree on a plan. May promised to deliver whatever Parliament approves
- Follow up with legislation to allow Brexit to happen on May 22, avoiding the need to take part in European Parliament elections.
Sounds clever, doesn’t it? But despite May’s overture and Corbyn’s cautious welcome, much distrust remains across Westminster’s party lines.
Labour’s Angela Eagle suggested May’s plan could still be a “trap” to leave the EU on May 22 and blame Labour if that happens without a deal. “She should have made this effort two years ago when she crossed the threshold at Downing Street,” Eagle told the BBC’s Newsnight.
Sitting next to Eagle, Conservative MP John Baron said he wouldn’t vote for a deal that included a customs union with the EU. Just 36 Tories backed such a plan when it came up to a vote on Monday; 236 voted against.
The U.K.’s highly adversarial political system is not used to cross-party compromise. In the House of Commons, government and opposition MPs sit facing each other on ancient, crowded benches. They may sound polite (sometimes), but their antiquated parliamentary language often disguises real tribal distaste.
Was May’s outreach to Labour a bold, necessary move at a time of national crisis? Or did a flailing prime minister make a serious misjudgment, undermining her own party in a doomed attempt to win support from an opponent with little incentive to prop her up?
Today’s Must-Reads
- Ministers at Tuesday’s seven-hour Cabinet meeting had their phones confiscated to stop leaks and Twitter gossip. Rob Hutton on the debates (and dining) that led to a soft Brexit shift
- The prime minister’s effort to win over the opposition Labour party is her last spin of the dice, Therese Raphael writes for Bloomberg Opinion
- The Daily Telegraph is not impressed. “Mrs May’s authority has now evaporated entirely,” the staunchly Tory newspaper says in an editorial
Brexit in Brief
‘Better Late Than Never’ | Reaction from the EU was quick and pithy. “Good that PM @theresa_may is looking for a cross-party compromise. Better late than never,” said European Parliament Brexit lead Guy Verhodstadt. European Council President Donald Tusk was measured: “Even if, after today, we don’t know what the end result will be, let us be patient.”
French Cool | French President Emmanuel Macron is known to be cool on Britain’s case for a new extension, though before May spoke he said he’s open to new British proposals. Nevertheless, the EU “cannot spend months working out the modalities of a divorce,” Macron said. “We cannot be held hostage to a British political problem.”
Pay Your Taxes | How do we know the U.K. is still a member of the EU? Brussels Tuesday ordered the U.K. to claw back illegal tax breaks designed to lure multinationals. “This is illegal under EU state aid rules,” Margrethe Vestager, the EU’s antitrust chief, said. “The U.K. must now recover the undue tax benefits.”
House Prices Struggle | London’s property market is a mixed picture as the city waits for Brexit to remove some of the uncertainty around buying a home, our latest analysis shows.
Emergency Exit | Before May spoke on Tuesday, European leaders were eager to stress the likelihood of a no-deal Brexit. “We have to take into consideration a no-deal possibility. It’s a probability,” Dutch Prime Minister Mark Rutte told reporters in Luxembourg.
No-Deal ‘Disaster’ | The U.K. leaving the EU without an agreement would be a “disaster” for the company and the auto industry, Ford of Europe Chairman Steven Armstrong said in an interview with Bloomberg Television. Ford is prepared to reconsider its U.K. footprint, counting an engine and a transmission plant, if that happens, he said.
Beleagured Bankers | Frankfurt’s financial center “will become more international and more competitive” after Brexit, said Joachim Wuermeling, the head of banking supervision at the Bundesbank. That means Germany’s battered investment bankers could face even more competition when rivals move more staff there.
On the Markets | The pound enjoyed May’s statement, erasing most of its Tuesday losses but not recovering to its Monday high. Sterling has been trading within a $1.3010 to $1.3150 range as it reacts to daily changes in the Brexit outlook. It was at $1.3141 in early trading this morning.
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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Leila Taha
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