Brexit Bulletin: As Good as It Gets

(Bloomberg) -- Today in Brexit: May hopes a swarm of support from businesses will fight off opposition from politicians.

Prime Minister Theresa May’s relationship with business hasn’t always been the smoothest. But now the two are united by a common goal: to convince Parliament that her Brexit deal is as good as it gets — and MPs better back it in the interest of avoiding Armageddon.

May will have a friendly audience today at the Confederation of British Industry. Its director, Carolyn Fairbairn, has already put a good spin on the deal. Crucially, the two are adopting a similar strategy of telling wavering lawmakers to think about voters and businesses rather than party politics.

“Listen to the businesses in your constituencies,” Fairbairn urged lawmakers in a Sky News interview. “Go out and talk to people and ask whether they think it’s now time to move on.” She attacked MPs for indulging in a “a political parlor game.”

Individual businesses are lining up with the same message. Tulsi Naidu, U.K. chief executive of Zurich Insurance, said the deal was “as good as it is going to get.”

Business likes the withdrawal deal for the same reason the pro-Brexit hardliners hate it: because it keeps the U.K. in something very similar to a customs union and points to very close ties in the future relationship. Businesses lobbied from the start to remain in the European Union’s trading bloc, and they’ve come away with the next best thing. Also, the possible extension of the transition phase — which the EU now says could last until 2022 — is good news for companies, which have made the grace period their top demand.

May needs all the help she can get. The parliamentary arithmetic for getting a deal through is looking trickier than ever. While she brought a couple of possible rebels on board with her reshuffle last week, the raft of resignations swelled the ranks of those vowing to vote against her. And she’s still facing the prospect of a leadership challenge, though the man who controls the process was sounding pretty cheery yesterday, and May herself said the crucial threshold hadn’t been reached at the end of last week.

May is back in Brussels this week to hash out the final points of the agreement on the future relationship. Arguments over economic ties — the U.K. is still pushing for things the EU has long ruled out — need to be settled by a signing-off summit on Sunday. Representatives of the EU27 meet this morning.

The prime minister gave a hint about her strategy yesterday in her interview with Sky: She wants to shift the debate to the terms of the future relationship and away from the divorce deal and the toxic Irish backstop. That raises the stakes for what she can extract this week from the other side. And means a lot hangs on a document that’s expected to be just 20 pages long. 

Today’s Must-Reads

• Rob Hutton takes a fresh look at the parliamentary arithmetic after the drama of last week. 
• The Brexit Betrayal for Curry House Bosses. A restaurant closes each day as falling immigration and a weak pound squeeze the business model. The irony is that a shift from EU free movement to a more global migration system was a pledge of the Brexit campaign that appealed to British Asians, but it’s failed to materialize.
• Still putting off wading through the 600 pages of the deal? The Institute for Government has a couple of handy explainers so you don’t have to. One on the main deal, and one on the Irish backstop.

Brexit in Brief

Good Behavior | The withdrawal agreement still has xxs to fill in when it comes to how long the transition can be extended. The EU is proposing 2022 as a maximum end date. It’s not clear what the British position is yet. But there’s an additional twist: an extension to will only be granted if the U.K. has fulfilled its obligations under the exit agreement, according to the draft seen by Bloomberg’s Nikos Chrysoloras.

Confidence Count | The Sun reckons it has a tally of lawmakers who have submitted letters calling for a no-confidence vote in May. The paper says 17 privately called for a leadership contest to be triggered, on top of the 25 declared publicly. That would mean just six more are needed. But Graham Brady is the only man who knows for sure.

Dying for No Deal | Former Brexit Secretary Dominic Raab urged the prime minister to prepare to leave the EU without a deal, saying that the long-term benefits would outweigh the short-term costs. Still, he refused to be drawn on whether the Department of Health had warned that people would die in such a scenario and said that lots of people were saying “irresponsible” things.

Galileo Leaves | Airbus’s Surrey Satellite Technology will move the work it does for Galileo, the EU’s satellite navigation system, to the Continent, according to the Financial Times. The company says it won’t be able to carry out classified tests on the navigation payload after Brexit, though unclassified work can continue in the U.K.

The Case for a Re-Do | The Observer set out its case for a second referendum and said it’s right for Parliament to vote down May’s deal. “It is the only route through the political gridlock that is likely to ensue, the only way of resolving the damaging stasis we confront. Nor is there any space for a ‘no deal’ option on the ballot: The choice must be between the status quo or a shambolic, lose-lose deal,” the paper said in an editorial.

Corbyn’s View | Labour leader Jeremy Corbyn writes in the Mirror that May’s deal is an “unparalleled and unacceptable loss of sovereignty.” Yesterday he softened his tone on the prospect of a second referendum, saying it’s an option for the future, not today. He didn’t say how he would vote if he got another chance, but reminded Sky viewers that he backed Remain the first time.

On the Markets | U.K. asking prices fell on an annual basis for the first time since 2011, according to Rightmove. London led the declines. The pound was unchanged in early trade this morning at $1.2832.

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To contact the editor responsible for this story: Lisa Fleisher at lfleisher2@bloomberg.net, Jones Hayden

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