European Union (EU) flags fly in front of the European Commission Berlaymont building in Brussels, Belgium (Photographer: Jasper Juinen/Bloomberg)

Don't Let the World Cup and Korea Distract You From Brexit

(Bloomberg) -- International attention will be focused on the U.S.-North Korea summit and the kickoff of the World Cup in Russia, but keep a watchful eye on the U.K. where Prime Minister Theresa May returns from a bruising Group of Seven meeting in Canada to more Brexit drama back home.

Given how many domestic crises she’s survived, it would be unwise to predict May’s downfall -- but things could change quickly. Brexit policy has been slowly but surely softening toward the European Union and that frustrates those in May’s Conservative Party who ardently want a clean break.

Is it all coming to a head?

Maybe. Last week, the hard-Brexit wing of May’s government was causing her trouble again, with Brexit Secretary David Davis threatening to resign and a leaked tape of Boris Johnson being candid.

This week, danger presents itself on multiple fronts with the return of the European Union (Withdrawal) Bill to the House of Commons on June 12. Tories keen to stay close to the EU will be tempted to vote against the government in 15 amendments introduced in the Europhile-dominated House of Lords. Many of these lawmakers, however, don’t want to destabilize May for fear the hardliners could take over.

On Monday night, May will address rank-and-file lawmakers and urge them to back her. “The message we send to the country through our votes this week is important,” she’ll say, according to her office. “We must be clear that we are united as a party in our determination to deliver on the decision made by the British people.”

This isn’t a line that all of her audience will find convincing. Conservative lawmaker Sarah Wollaston told the BBC Monday she was minded to vote against the government in two areas. She pointed out that the referendum result was very close, with almost half the country voting against Brexit. “We have a responsibility to listen to those views as well,” she said, rejecting the idea that rebelling would topple the prime minister.

At the same time, the hardliners are getting more openly critical of May’s strategy. Andrew Bridgen, another Tory, wrote in the Mail on Sunday that he was losing patience with the drift toward keeping Britain in the EU’s orbit. He said May’s fate might be decided in the next few days. Separately, the Sunday Times reported that the hard-Brexit camp could try to oust the prime minister as soon as next month.

Aren’t we always predicting May’s imminent demise?

Such deadlines have come and gone before, and May has stayed on her precarious perch. She even got some hope on Sunday from an unexpected quarter. Grant Shapps, a former party chairman who tried to push her out last October, said he could see her fighting the next election. Jacob Rees-Mogg, leader of the euroskeptic European Research Group of Tories, used his LBC radio phone-in show on Monday to urge unity. People should “calm down,” he said.

Until now, the problem has been that the Conservatives couldn’t agree who would replace her, or were scared that her removal could precipitate a snap election and potentially place opposition Labour Party leader Jeremy Corbyn in power.

But it’s possible that if the hardliners feel betrayed, they’ll simply take their revenge and let the future take care of itself.

The Moscow connection

Meanwhile, trouble has come up on another front.

Arron Banks, a driving force behind the Leave.EU campaign, told the Sunday Times he’d met with Russia’s ambassador to Britain on two occasions beyond the single session he’d previously disclosed. One meeting was in November 2016, three days after Banks had a face-to-face with newly-elected U.S. President Donald Trump.

Banks was dismissive. “I had two boozy lunches with the Russian ambassador and another cup of tea with him,” he told the Sunday Times. “Bite me. It’s a convenient political witch-hunt, both over Brexit and Trump.”

Nevertheless it’s awkward for May, who regularly accuses Russia of meddling in foreign elections but never includes the June 2016 Brexit referendum in the list. It’s also bad timing ahead of the votes on the Withdrawal Bill, reminding wavering Tories that backing a hard Brexit puts them on the same side of the issue as Vladimir Putin.

U.K. really isn’t ready for Brexit, it seems

May’s strategy of delaying decisions and splitting the difference between warring sides of the party is keeping her in her job, but it’s making it impossible for officials to prepare for Brexit, according to the Institute for Government.

In a report into levels of preparedness published on Sunday, the independent think-tank describes how a desire to “avoid domestic political embarrassment” is preventing the government from sharing -- even internally -- its impact assessments. That’s hampering planning, as are ministers’ conflicting priorities.

Labour tactically adjusting its Brexit position

The main opposition isn’t standing idle. Labour Brexit spokesman Keir Starmer said his party now wants “a single market deal” -- after ruling out membership of the EU’s single market a year ago. He said he would want to negotiate with the EU to see how flexible it would be on the free movement of people.

The opposition has its own divisions to contend with, though. Many lawmakers are threatening to rebel because they want Britain to stay inside the European Economic Area. Starmer is aiming for a bespoke agreement on the single market instead.

Labour has also made a habit of rolling out the kind of eye-catching, voter-friendly policy proposals that helped the party make gains in last year’s election. The latest is from Corbyn, who said a Labour government would legislate to ensure that restaurant wait staff could keep all of their tips.

Announcing it now is a sign that Labour thinks the next election could occur much sooner than 2022, and a reminder to May’s Conservatives that, while they’re arguing about Brexit, they risk losing voters’ attention, and support.

©2018 Bloomberg L.P.