Brexit Bulletin: Max Fudge


(Bloomberg) -- Today in Brexit: The government’s strategy now appears to be to put off difficult decisions until later. But even ministers know this can’t go on forever.

How much longer can we keep asking the same questions without getting answers? You know the ones: Will they stay in the customs union or won’t they? Will the cabinet sign up to Theresa May’s new-fangled not-quite-a-customs-union “customs partnership”? What does “max fac” actually mean anyway?

They’re asking those questions in Brussels, but they’re also asking them in the heart of government. How much longer can this go on seems to be the main topic of conversation. One minister suggested to Bloomberg that the government must be close to breaking point, according to a Rob Hutton analysis of what lies behind Prime Minister May’s strategy. Procrastination now appears to be at least part of her plan.

Brexit Bulletin: Max Fudge

The evidence is compelling. A meeting of the so-called Brexit “war cabinet” was canceled yesterday, while Tuesday’s is now uncertain. It was at one of those gatherings last week that May was outnumbered by ministers unable to agree on the customs issue. Now, as The Times reports today, ministers have been split into two rival camps to work through the two alternatives – the customs partnership (that Foreign Secretary Boris Johnson describes as “crazy”) and the hi-tech maximum facilitation model (that Chancellor of the Exchequer Philip Hammond rejects). Let’s not forget that, despite asking for more details , the European Union has said they’re both unworkable.

There are other signs of delay. Lawmakers are wondering when they’ll get the chance to vote on key pieces of Brexit legislation. Announcing the provisional schedule yesterday for debates for the next two weeks, the government made no mention of the return of May’s landmark Brexit legislation from the House of Lords. The upper house inflicted 14 defeats on the government and May can expect opposition to many parts of the so-called EU Withdrawal Bill from lawmakers of all parties when it is again debated by the House of Commons.

Debates on those bills, when they come, are likely to expose May’s predicament: She is stuck between a likely majority for a customs union and more than 60 lawmakers in her own Conservative Party who are threatening to derail her government if she goes for one. With the choice of a rock and a hard place, May’s opting to delay her decision.

Today’s Must-Reads

  • Mark Carney’s window to raise interest rates before Brexit is closing. As the divorce draws nearer, Bank of England policy makers with a benchmark interest rate of just 0.5 percent could be left with limited room to cut should they need to act.

  • Michael Gove, environment secretary and prominent Brexit campaigner, fears the EU will use the Irish border issue as a “Trojan horse” to “hold us hostage” and keep the U.K. in the single market and customs union, the Daily Telegraph reports.

  • Expect more fudge, writes Bloomberg Opinion’s Therese Raphael. If Theresa May doesn’t come up with a workable solution, then either Parliament will force her hand or the EU will hold parts of the Brexit deal hostage.

Brexit in Brief

Supply Information | The U.K. government has asked business groups to map their supply chains to flag the areas of the economy most at risk if Brexit imposes additional trading costs on exporters, two people familiar with the matter said. The request is designed to help understand which sectors and companies stand to lose the most if departure from the customs union leads to costly rules of origin.

Major Failure | Former Prime Minister John Major said Theresa May’s quest for a frictionless post-Brexit alternative to the customs union is doomed to fail. Major – who led Britain from 1990 to 1997 – said in a speech yesterday at the Irish Embassy in London that the customs union is “crucial to trade.” 

That’s a No, Then | Jacob Rees-Mogg, the hardline Brexit-backer who commands a group of Tory lawmakers, shot down a compromise idea that would see the U.K. opting for the trade plan that Brexiters want but staying in the customs union until it’s ready. Could he accept an extension of customs union membership, he was asked on BBC TV yesterday. “The customs union means we are effectively staying in the European Union,” he said. “So no, of course not.” It would be a “dramatic failure of government policy.”

Modesty Retained | Mark Carney said the Bank of England still intends to deliver “modest” tightening after an unexpected economic slowdown derailed an interest-rate hike that investors had anticipated as soon as this month. The BOE governor spoke after officials kept the key interest rate at 0.5 percent, citing the first-quarter slump, and said inflation will weaken faster than previously thought. Investors sold the pound and reduced their bets on a rise this year.

Wanted Men | The U.K.’s Digital, Culture, Media and Sport Committee issued formal summonses to former Cambridge Analytica CEO Alexander Nix and Dominic Cummings, former campaign director of Vote Leave. Chairman Damian Collins said the committee wants “the truth” about how U.K. Facebook users’ data might have been used in election campaigns.

Free Speech | European Union Budget Commissioner Gunther Oettinger told German schoolchildren yesterday what he really thinks of the British government. “Mrs. May is weak and Boris Johnson has the same hairstyle as Trump,” he said. “That says it all.”

His Waterloo | Conservative lawmaker and ardent Brexiteer Michael Fabricant is worried that even though Brexit means Brexit, it apparently won’t bring an end to mediocre songs and funny costumes. Does Parliament “share my dismay that Brexit does not mean that we are leaving the Eurovision song contest?” Fabricant asked the House of Commons yesterday, according to the Daily Mirror.

Brexit Bulletin: Max Fudge

As the newspaper points out, the annual musical jamboree, which takes place in Lisbon tomorrow, has nothing to do with the EU. Countries including Russia and Israel also participate.

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To contact the author of this story: Ian Wishart in Brussels at

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