Theresa May, U.K. prime minister (Photographer: Andy Rain/Pool via Bloomberg)

May Refuses to Back Down to Rebels Before Crunch Brexit Vote

(Bloomberg) -- Prime Minister Theresa May will take on anti-Brexit rebels in her own party as she battles to keep control of the U.K.’s exit negotiations. Wednesday’s clash in Parliament could have far-reaching consequences for May’s future and the direction of divorce talks.

The premier is facing a revolt from Conservative Party lawmakers over whether she should have the power to take the U.K. out of the European Union without a deal, or if Parliament should have control over the way forward in the event that talks break down.

The matter will come to a crunch on Wednesday afternoon in London, with what looks likely to be a close vote in the House of Commons.

The stakes are high for May. If the Conservative rebels are numerous enough to defeat the premier, Parliament will effectively neutralize her threat to walk out of Brexit negotiations if the final deal isn’t good enough.

May Refuses to Back Down to Rebels Before Crunch Brexit Vote

Brexit backers in May’s party believe this would weaken Britain’s negotiating position and could even open the door to keeping the country inside the EU. Some ardent Brexit campaigners have even privately warned they will try to oust May if she loses the vote, though it’s not clear they will have enough support to remove her.

Final Choice

Sterling fell for a third day against the dollar ahead of the crucial vote. The premium to protect against overnight swings in the pound surged the most in more than a month. Traders are also factoring in the risk of the Bank of England pushing back on the timing of interest-rate hikes in its statement on Thursday.

Pro-EU Tories such as former Attorney General Dominic Grieve, who is leading the rebellion, say that it’s vital to avoid potential chaos at the end of Brexit negotiations. They say they want to ensure the final choice facing Parliament when talks with the EU conclude is not just between ratifying a bad deal and leaving the EU without any deal at all.

May Refuses to Back Down to Rebels Before Crunch Brexit Vote

If the deal isn’t good enough, or if talks fail to reach an agreement, Grieve wants Parliament to have an opportunity to influence what happens next. His argument won the day in a vote in the House of Lords, the U.K.’s upper chamber of Parliament, on Monday. May is trying to persuade the elected lower house, the Commons, to overturn that vote on Wednesday.

Despite talk of a compromise clause being drafted, May’s office insisted she isn’t backing down. “We cannot accept the amendment on the meaningful vote agreed in the Lords,” May’s spokesman James Slack told reporters Tuesday. “We believe the amendment would undermine our ability to get the best deal.”

If May survives Wednesday’s vote, her key piece of Brexit law -- the European Union (Withdrawal) Bill -- will clear Parliament and head into the statute book. It’s the legislation that paves the way for the U.K. to exit the EU next March.

The parliamentary danger will not be over for the embattled prime minister. She will face another clash with the same pro-EU Tories potentially as soon as next month over whether the U.K. should stay in the European customs union.

May is determined to leave the customs union and defeat on this issue would be far worse for her Brexit strategy.

May Refuses to Back Down to Rebels Before Crunch Brexit Vote

The implications are also serious for Grieve and his allies, who have been pilloried in euroskeptic U.K. newspapers and have received hate mail from Brexit campaigns. Anna Soubry, one of the pro-EU Tories, said she’s received death threats, which have led to prosecution and jailing of several offenders.

“Yesterday, the police came to my Parliamentary office to investigate another death threat,” Soubry wrote in a message to her constituents Tuesday. This abuse is “a very real threat to our democracy” and has deterred some colleagues from joining her campaign. But Soubry added: “For my part it makes me even more determined.”

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