Brexit Bulletin: Tearing It Down

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Today in Brexit: Labour threatens to bring down the government if Theresa May’s deal is rejected.

It’s going to be another tough week for Prime Minister Theresa May: Lawmakers are demanding the publication of internal legal advice that underpins the U.K.’s Brexit withdrawal plan. Meanwhile, the opposition Labour Party has further raised the stakes ahead of next week’s vote on May’s deal, signaling it will propose a motion to bring down the government if the agreement is rejected on Dec. 11, as is widely expected.

The first issue could come to a head as soon as today, when Attorney General Geoffrey Cox is scheduled to address Parliament. While lawmakers have voted for the legal advice to be published in full, the government plans to provide just a statement on the legality of Brexit.

Labour’s Brexit spokesman Keir Starmer said on Sunday that he might try to compel publication through contempt proceedings, while the Sunday Telegraph reported that May’s Democratic Unionist Party allies are set to join Labour and other opposition parties to force the issue. Two Conservative MPs, Simon Clarke and David Jones, also urged the government to publish the advice in full, as did Boris Johnson in his Telegraph column.

The release could be explosive. The Sunday Times reports that Cox’s advice warns that the U.K. could be trapped “indefinitely” in a customs union with the European Union. Meanwhile, Brexit Central reports that analysis by the House of Commons’ legal team — a separate study from the official legal advice — shows that May’s deal would prevent the U.K. from entering trade accords with countries such as the U.S.

Starmer also said it was “inevitable” that the his party would call a no-confidence vote if lawmakers reject her deal, a move that could put the U.K. on course for another election. The Times reported today that May’s DUP allies could vote against her in that too, leaving her without a clear majority.

Here’s how this could work to May’s benefit: The explicit threat of a no-confidence vote and potential elections could help the prime minister sell the deal to her own party. Evidence of that tactic emerged almost immediately yesterday, when Tory party Chairman Brandon Lewis said that “the best way to prevent” such a vote is “get this deal through Parliament on Dec. 11.” 

Today’s Must-Reads

• Check out our trader’s guide to how the vote on May’s Brexit deal will unfold.
• Bloomberg’s Alex Morales has the full lowdown on the Group of 20 summit in Argentina, where the prime minister spent two days discussing stronger trade ties with allies to sell the benefits of Britain’s departure.
• May’s chief Brexit adviser secretly warned her that the customs backstop is a “bad outcome” for Britain which will create regulatory checks in the Irish Sea and put security cooperation at risk, the Telegraph reports.

Brexit in Brief

Gove Backing | Environment Secretary Michael Gove, who campaigned for Brexit, backed May’s plan, albeit in less than glowing terms. He told the BBC that, while the deal isn’t perfect, voting for it is the right thing to do. Gove said he believes May can win the vote later this month, but the prime minister won’t have to go if she loses.

Exploring Norway | Nick Boles, who supports a Norway-style plan in which the U.K. would join the European Free Trade Association, told Sky News that he’s had conversations with six to eight members of the Cabinet about his proposal. Boles said he intends to vote for May’s deal, but he thinks she should step down before the next election.

Another Resignation | The 22nd minister resigned from May’s government since last year’s election. Pro-European Sam Gyimah quit on Friday as science minister, saying the Brexit withdrawal deal will leave Britain poorer. Gyimah suggested it may be necessary to delay Brexit and even ask Britons to vote in a new referendum.

Dutch Dealings | As Brexit nears, the Dutch authorities processing banking and markets licenses are starting to feel the heat. About 50 banks and other financial institutions are having or have had talks with the Dutch central bank about setting up shop in the Netherlands, according to Tobias Oudejans, a spokesman for the institution.

Paris Bound | Park Square Capital LLP has opened an office in Paris in a move to increase investment across Europe as it looks to reduce its exposure to U.K. assets likely to be affected by Brexit, the Financial Times reported. The timing of the move is connected to the U.K.’s planned exit from the EU, Managing Partner Robin Doumar told the FT.

On the Markets | U.K. stocks are so “cheap and unloved” that they deserve a second look , according to Morgan Stanley. Despite uncertainty over Brexit, the U.S. bank’s strategists reckon the market may be the surprising developed-market winner of 2019, thanks to cheap valuations and an asymmetric relationship with the currency. 

No-Deal Questions | What would a no deal Brexit actually look like, and how would it be averted? Bloomberg’s Emma Ross-Thomas answers the key questions.

Want to keep up with Brexit?

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

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