Brexit Bulletin: Breaking Faith vs. Breaking Deadlock

(Bloomberg) -- Today in Brexit: The chances of a second referendum creep higher.

Theresa May will tell Parliament today that a second referendum would “break faith” with the British people, doing “irreparable damage” to democracy. But the fact that the prime minister is even addressing the issue head on is yet another sign that a re-do vote is getting more likely.

Ministers now raise the idea of a second vote in private, unprompted, as Rob Hutton wrote last week. The Sunday Times reported that two of May’s closest allies are preparing for the scenario. They both tried to shoot down the story, with Chief of Staff Gavin Barwell saying he doesn’t “want” another plebiscite.

Before we get to a second referendum, it probably has to be clear that all the other options have been exhausted and that there’s no majority in Parliament for May’s deal or any other style of Brexit, including the catastrophic no-deal variety.

That’s why it’s important that a group of ministers is pushing May to hold a series of informal votes in Parliament on the different Brexit outcomes, to make clear that none commands enough support. While some of them are backing the strategy as a way to create support for May’s deal, for others it’s a tactic that would open the way to another referendum.

The idea of a second referendum isn’t just gaining traction among those who hope it would overturn the last one. It’s also a tactic to get Brexiteers behind May’s plan. One Cabinet member said he wants it on the table to convince them that losing the divorce they’ve spent their careers fighting for is a real possibility if they don’t back the prime minister.

What about the European Union side? At last week’s summit, Luxembourg Prime Minister Xavier Bettel told reporters he would prefer a second referendum to no deal. EU leaders have made it plain they would welcome the U.K. back into the club and are refusing to budge to help May get her divorce deal through Parliament. If a second referendum starts looking more likely, the bloc will have even less incentive to bail her out.

Today’s Must-Reads

  • Brits are increasingly uncertain about whether ending free movement is worth the cost to the economy, writes Bloomberg Opinion columnist Lionel Laurent.
  • ICYMI: Why memories of the Cameron renegotiation are still haunting Brexit talks. Ian Wishart and Nikos Chrysoloras get the inside story from the Brussels summit.
  • Ivan Rogers, Britain’s former ambassador to the EU, takes a long look at what has gone wrong with Brexit talks in the Spectator.

Brexit in Brief

Cox’s Plan | Attorney General Geoffrey Cox told Cabinet ministers that May must be removed from the job after Brexit so that someone else can renegotiate the deal, the Telegraph reports. Cox denied it, according to the paper.

May’s Warning | May warned Emmanuel Macron and Angela Merkel that the Brexit deal is dead unless they compromise, in a private 15-minute meeting after the summit, Tim Ross reports. Dutch Premier Mark Rutte and European Council President Donald Tusk were also there, according to a person familiar with the matter.

Rudd’s Plan | Pensions Secretary Amber Rudd called for politicians to work together to find a compromise Brexit plan in an article in the Daily Mail. “We need to find a plan that a majority in Parliament can support,” she wrote. That sounds a bit like she’s declaring May’s plan dead.

How to Delay | How hard would it be to delay Britain’s departure date? Alex Morales has done some digging into the rules and procedures, and it’s easier than you might think. From the U.K. side, it would require little more than a short debate and the approval of Parliament.

Housing Hit | House prices fell for a second month in December, recording the steepest back-to-back declines since 2012, according to Rightmove asking prices. No-deal Brexit fears were blamed.

No-Deal Plan | The European Commission will propose no-deal plans that amount to a six- to nine-month extension of current arrangements to allow for a “soft landing in a few sensitive areas,” Politico reports. The bloc is due to publish no-deal plans on Dec. 19.

On the Markets | The pound may be the winner against the euro next year in a contest of the not-so-pretty, Charlotte Ryan reports. Sterling was little changed early Monday at $1.2584 and 1.1128 euros.

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