Brexit Bulletin: That’s Not My Brexit

(Bloomberg) -- Today in Brexit: Talks with Labour are stalled, and Parliament might soon have another go at breaking the deadlock.

What’s Happening?

Talks with Labour are going nowhere, and Parliament looks set to get one more opportunity to break the deadlock. The chances of a second referendum could be growing.

When cross-party talks break down, the plan is to put a series of Brexit options to Parliament. But the last rounds of so-called indicative votes failed to produce a majority for any kind of Brexit after all the alternatives were rejected. So the government is now trying to figure out a system that would force a compromise. Housing Secretary James Brokenshire said it would be a question of “definitive” rather than indicative votes this time. The idea being floated is to ask members of Parliament to name a second-best option, in order to find a winner. 

The problem with alternative-vote systems is they produce winners that don’t please many people — a compromise no one really wanted. Could a second referendum scoop up enough second- or even third-choice votes to get it over the line? 

In the last round of indicative votes in April, a confirmatory public vote was rejected 292-280. The deadlock has only gotten worse since then, with positions on all sides more entrenched. But with Nigel Farage surging in the polls, the prospect of a general election for the Tories is getting more terrifying. The next round of indicatives votes is shaping up to be an unpleasant game of “Would You Rather.”

Today’s Must-Reads

Brexit in Brief

Hunting Support | Foreign Secretary Jeremy Hunt made a pitch for the leadership on Monday night, making the case for more defense spending. “It is time for the next Strategic Defence and Security Review to ask whether, over the coming decade, we should decisively increase the proportion of GDP we devote to defense.”

Cabinet Crunch | May chairs a Cabinet meeting today amid growing calls for her to pull the plug on talks with Labour.

Back to Brussels | Brexit negotiator Olly Robbins will travel to Brussels on Tuesday for talks on how the political declaration on future ties could be tweaked and how long it would take, the BBC reports. May’s office didn’t confirm the trip.

Crisis of Capitalism | Britain risks a crisis of capitalism because of rising inequality, according to new research that says the country could follow the U.S. into declining life expectancy and stagnant wages for the less-educated.

Please Play Nicely | Germany hopes the next batch of British members of the European Parliament will play a “constructive role” rather than disrupting European business, Justice Minister Katarina Barley said in an interview with Bloomberg TV. “I hope that they also feel a sense of responsibility for the whole. It’s not another election just about Brexit.”

Nothing to Do | While they wait for the chance to tell May again what kind of Brexit they (don’t) want, MPs are knocking off early with little to do. Parliament was adjourned at 6 p.m. on Monday.

On the Markets | The pound slipped on Monday and was unchanged at $1.2960 in early trading today. Nomura’s Jordan Rochester reckons the pound is being driven more by the U.S.-China trade spat and investors’ broader risk aversion than by the outlook for Brexit. 

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