May Sticks With Brexit Plan After Resignations: Brexit Update

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Theresa May named Dominic Raab as her new Brexit Secretary after David Davis resigned over her plans to keep close ties to the European Union after the divorce. With the government in crisis, the focus is on whether pro-Brexit Conservative Party lawmakers try to oust her.

Happiness in Westminster (1:02 p.m.)

In Parliament today, the paradox is that everyone’s happy, but for different reasons. Labour members are content because the government is in disarray, and asking for their help -- which it’s pretty clear it’s not going to get.

Conservatives who want to stay close to the EU after Brexit are happy because they think things are moving in their direction: May has made a decision, and it’s for a soft Brexit. They’re also relaxed about the prospect of a leadership challenge, confident that it would fail.

And the Tories who want maximum distance from the EU? Over the weekend, they were furious because they felt that their allies in Cabinet had let them down. But now they’re smiling, as Davis’s resignation means they now have a champion. (A pro-EU Tory also remarked caustically that some of his colleagues were never happy unless they thought someone was betraying them.)

The Tory high command is telling Brexiteers that May’s offer represents their best hope: Britain will leave the EU, and other things can be sorted out later. To try for more, one senior party figure said, would be to repeat the traditional mistake of British cavalry through the ages: After initial success, they assume they can win the war on their own -- only to charge off and get slaughtered.

For the broad mass of Conservatives in the middle, May’s pitch is that they’ll get something they can plausibly describe as Brexit, and be able to move on to other issues.

CBI Welcomes Raab Appointment (12:10 p.m.)

The U.K.’s most prominent business lobby welcomed the appointment of Dominic Raab as Brexit Secretary, but warned that it’s a “critical time.”

“There’s a tough job ahead and business is ready and willing to support him and his team,” Carolyn Fairbairn, the director-general of the Confederation of British Industry, said in a statement. “Proposals unveiled last week gave a genuine confidence boost to businesses struggling with uncertainty, yet the devil will be in the detail.”

She also urged the government to make clear what the Brexit policy will be on services, as well as goods.

Brexiteers Warn May (12:02 p.m.)

The government’s decision to persevere with May’s plan (11:34 a.m.) looks likely to set up a showdown with pro-Brexit Conservative lawmakers.

“I think if she sticks with this policy the government is in danger, yes,” Andrew Bridgen tells Bloomberg, adding that he would make a decision on whether to seek a confidence vote in May after the prime minister addresses Tory lawmakers this evening.

Peter Bone, another pro-Brexit Tory, says the prime minister isn’t in danger -- as long as she alters what he calls her “Remainer policy” on Brexit.

“Angry? I’m more disappointed and fed up,” he says. “Now I’ve got to persuade people and persuade the prime minister to go back to what we’d already agreed.”

May Is Not Backing Down (11:34 a.m.)

May’s spokesman James Slack tells reporters the government is pushing forward with Theresa May’s Brexit plan, which he says was agreed by the Cabinet at Chequers and would be unchanged in light of subsequent events.

Slack also says with Britain’s Brexit position set it’s now the European Union’s turn to move, and calls on the bloc to “get serious” in the negotiations.

More on Dominic Raab (11:01 a.m.)

Raab is firmly in the Brexit camp but acknowledges that many voters in his constituency southwest of London felt strongly the other way. Since the 2016 referendum, he has adopted a policy of meeting one anti-Brexit constituent a week to hear them out.

He is a libertarian lawyer whose instincts are for a hard Brexit, making his willingness to accept the job of selling a soft one a surprise. His decision could also damage his long-nursed prospects of one day leading the Tories.

Meanwhile in Europe... (10:44 a.m.)

A reminder that the drama in London is only one aspect of the Brexit story. German deputy government spokeswoman Martina Fietz warns that time is running short for talks between the U.K. and the European Union, with negotiations “entering the decisive phase.”

Dominic Raab Named Brexit Secretary (10:27 a.m.)

Brexiter Dominic Raab is named as Brexit Secretary, replacing David Davis, government says. Raab, 44, campaigned for Brexit. He is relatively inexperienced and was brought into the Cabinet in the January reshuffle as a young up-and-coming Tory with leadership ambitions.

Rees-Mogg Calls Meeting of Key Euroskeptic MPs (10:13 a.m.)

Pro-Brexit Tory lawmaker Jacob Rees-Mogg tells Bloomberg his European Research Group will meet today to discuss May’s Brexit proposal. “I will get to know what members feel,” he says. “But they don’t like the Chequers deal. That much I do know. ”

“My view is that she must go back to what she said prior to the Chequers meeting with ‘Brexit meaning Brexit,’ and give up on this extraordinary U-turn,” he says.

Asked if a leadership challenge to May will emerge in the coming days, he says “I simply don’t know.”

May’s Office Invites Labour MPs for Briefing (10:03 a.m.)

May’s office has taken the highly unusual step of inviting opposition Labour lawmakers to a briefing on her Brexit proposal. This is something that usually only happens when seeking support for military action, and suggests the government is looking for a way to get the plan through Parliament without the support of some of the more hardline Brexiters on the Tory side.

Starmer: Davis Resignation ‘Vote of No Confidence’ (9:50 a.m.)

Labour Party Brexit spokesman Keir Starmer tells Bloomberg Davis’s resignation “is a very serious blow for the government because he’s effectively voted no confidence in the prime minster and her approach.”

He also calls May’s Brexit proposal a “fudge” and a “bureaucratic nightmare,” but points out that the government faces two looming votes on the Customs Bill and the Trade Bill. “It is possible for the House of Commons to vote on, for example, a customs union next week to give some stability to this,” he says.

Rees-Mogg: Policy Matters More Than Leader (9:25 a.m.)

Pro-Brexit Tory lawmaker Jacob Rees-Mogg says he hasn’t filed a letter of no confidence in Prime Minister Theresa May, and that a confidence vote isn’t “immediately in the offing” -- a key statement because Rees-Mogg’s group of 60-odd euroskeptic lawmakers would be critical for any leadership challenge.

“The Conservative Party doesn’t have a great history of changing its leader,” he says on his LBC radio show. “It’s the policy that matters rather than the leader.”

On that note, Rees-Mogg called on May to drop the Brexit plan she put forward at the Cabinet gathering at Chequers last week, which he describes as “not just a u-turn, it was a handbrake turn.’’ May made “a lot of noise” about opting out of elements of EU membership, and then opted back into the “most important ones,” he says.

Rees-Mogg also says he wouldn’t want to be Brexit secretary even if offered, because the prime minister “constantly overrules” the Brexit secretary. He suggests there’s little point in the Brexit department if May’s office sets all the policy.

May Faces Brexit Crisis as Key Ministers Quit (8:53 a.m.)

U.K. Prime Minister Theresa May was plunged into the worst crisis of the past year after key members of the government quit over her Brexit plan. Her government is in disarray and her leadership in question just nine months before Britain leaves the European Union.

Brexit Secretary David Davis and his deputy, Steve Baker, resigned late on Sunday -- just two days after May announced she had secured the backing of her whole Cabinet for a plan to keep close ties to the EU after leaving the bloc. Junior Brexit minister Suella Braverman also resigned, the Guardian reported.

A replacement will be announced on Monday, May’s office said, and the appointment will offer clues as to her tactics going forward.

“It seems to me we’re giving too much away too easily, and that’s a dangerous strategy at this time,’’ Davis said on BBC Radio 4 on Monday. In his resignation letter, he said May’s plan to adopt EU regulations for all goods and agri-food products after Brexit “hands control of large swathes of our economy to the EU.”

‘More Uncertainty’

As the minister responsible for the Brexit negotiations, Davis is a major voice in the debate in the U.K. Though Davis told the BBC that “of course” May can survive his resignation, it still has the potential to derail her government and could embolden pro-Brexit lawmakers to make a move against her.

The pound fluctuated on the news of Davis’s departure.

Davis, Baker and other pro-Brexit members of May’s Conservative Party have deep concerns about her plans for keeping the U.K. tied to EU rules for goods and adopting a close customs arrangement with the other 27 member countries. They say Britain should have a clean break from the bloc and be liberated to pursue new trade deals with other countries, as well as to make its own laws, free from European influence.

Parliament’s Decision

In her reply to Davis, May insisted her plan would deliver on the referendum result and the party program from last year’s general election.

“I do not agree with your characterization of the policy we agreed at cabinet,” she said.

The resignations came at a critical and highly sensitive time for May’s strategy, as she seeks to make progress in negotiations with the EU. A divorce agreement is due to be wrapped up in just 15 weeks, but there are still major obstacles to overcome.

She achieved a rare consensus in a key cabinet meeting on the way forward for the negotiations with the EU and told ministers that from now on they had to back her position or resign. That agreement, at her Chequers country retreat, was meant to kick-start talks that have been stalled for months.

Second Thoughts

On Friday, Davis and fellow Brexit backer Foreign Secretary Boris Johnson both agreed to support May’s proposal for a softer divorce than she had originally planned. As resignations failed to materialize over the weekend -- when England was playing in the World Cup -- May seemed to have survived the storm.

Johnson’s allies said on Saturday that he decided not to quit because he wanted to remain in the government to fight for the kind of Brexit for which he had campaigned.

The prime minister will have a crunch meeting with members of her Tory party to discuss her plan in Parliament on Monday evening. Some lawmakers have already expressed their misgivings. Johnson will give a press conference later on Monday as part of an international summit.

May has survived crises before, including threatened leadership challenges. Although U.K. politics is volatile, the pro-Brexit camp in Parliament would likely struggle to get the numbers together to win if May decided to stay and fight. John Redwood, a Brexit-backing lawmaker, dismissed talk of a leadership challenge, saying the priority is to get the policy right.

Even so, “there needs to be a rebuilding of trust,” Bernard Jenkin, a pro-Brexit backbench Conservative lawmaker told BBC radio on Monday.

“There’s been a massive hemorrhage of trust over the last few days,” he said. “In all my meetings with the prime minister I never expected this to be the result.”

Even if they succeeded, a new leader would be stuck with the same lack of a parliamentary majority that has forced May to adopt a softer split from the bloc than the one she originally planned.

Over the weekend, May sought to bind Brexit supporting ministers to her proposal as they were sent out to tell the media that they backed it.

Trade Secretary Liam Fox put his name to a newspaper article backing the plan, and Environment Secretary Michael Gove defended the agreement in a TV interview.

But in a sign of the trouble to come, Jacob Rees-Mogg, chairman of the European Research Group of Tory lawmakers, said May’s plan was “defeatist” and he would oppose it. “If the proposals are as they currently appear, I will vote against them and others may well do the same,” he said in an article for Monday’s Daily Telegraph newspaper.

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