Brexit Bulletin: Breathing Space

(Bloomberg) -- Today in Brexit: Theresa May has won a stay of execution from her own lawmakers, while there are even signs of life in talks with the opposition.

What’s Happening?

Theresa May, the great survivor of British politics, has found her way out of yet another tricky situation.

A key panel of rank-and-file Conservative lawmakers yesterday opted to keep the rules on the party’s leadership challenges unchanged, preventing an immediate threat to the prime minister’s position. The news came as Graham Brady, chair of the Tories’ 1922 Committee, said May has agreed to meet with the group’s executive next week. Last month the panel urged the PM to set a clear road map for her departure.

May has told her party she’ll go once she gets her deal through Parliament, although that’s not good enough for some MPs, who are calling on her to quit immediately. In a fiery exchange in the House of Commons Wednesday May apologized for the thrashing her Conservative Party suffered in local elections last week, but rejected the suggestion she should step down, saying “this is not an issue about me.”

In his comments last night, Brady added that he’s under the impression that May is likely to bring her Brexit deal back to Parliament before European elections on May 23 — in the form of legislation known as the withdrawal bill. The prime minister needs Labour votes to get her plan approved and she’s still fighting to secure them. There were nascent signs of life on that front on Wednesday, with both the government and the opposition putting out statements on their ongoing attempt to forge a consensus.

Still, David Lidington, May’s de-facto deputy, said yesterday that the talks had been “difficult,” and HuffPost reports that Labour leader Jeremy Corbyn is prepared to pull the plug entirely. Meanwhile, Johnny Mercer, a Tory backbencher, said he’ll withdraw support from May’s government on all legislation except for Brexit because of her failure to protect military veterans from historical prosecutions. 

Today’s Must-Reads

• Visiting London yesterday, U.S. Secretary of State Michael Pompeo said President Donald Trump is “eager” to sign a new trade deal with the U.K., and urged Britain “God speed and good luck” with Brexit
• Brexit paralysis is getting in the way of other foreign policy issues, says the Guardian’s Martin Kettle
• Who’ll run the Bank of England after Brexit once Mark Carney steps down? Bloomberg’s latest survey runs the rule over the leading candidates.

Brexit in Brief

Counting the Cost | The National Institute of Economic and Social Research suggests that British GDP in the longer term will be around 3% lower in a U.K.-EU customs union than it would have been had the nation stayed in the bloc. That’s equivalent to a loss of around £800 ($1,041) per person per year.

House Price Malaise | House price growth in the U.K. remained weak in April, with continued pressure on southeast England and London depressing the market, the latest survey from the Royal Institution of Chartered Surveyors shows. The findings contrast with a report from Halifax yesterday, which showed a rebound in prices last month.

EU Campaigns | Labour and the SNP are due to launch their campaigns today, while Change UK hold a rally in Sheffield. Liberal Democrat leader Vince Cable uses a Guardian interview to unveil a bold new slogan, while Nigel Farage of the Brexit Party told ITV’s Robert Peston last night that his campaign was a serious bid to kick off an “ambitious project.”

Risks Remain | The Bank of England has largely guarded against most of the risks to financial stability that could arise from a no-deal Brexit, but there are still some hazards, the institution’s Deputy Governor Dave Ramsden said in a speech yesterday.

School Danger | London schools could be vulnerable to a Brexit migration clampdown, with figures published Wednesday showing that almost 16% of staff at state-funded nursery, primary and secondary schools in the British capital are nationals of other countries. That’s nearly triple the average for England as a whole.

Football Funnies | May and Jeremy Corbyn used Liverpool’s unlikely Champions League win as an excuse to trade tortuous jokes in Parliament yesterday. Corbyn’s jibe about getting “a good result in Europe” was met with a riposte from May on the benefits of sticking together. We await to see what the prime minister thinks about Tottenham Hotpsur’s dramatic win last night.

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To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Leila Taha

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