Brexit Bulletin: Workers Unite

(Bloomberg) -- Today in Brexit: While Boris Johnson fuels more Tory infighting, the campaign for a second referendum gets some important backing.

It’s still a long shot. But the campaign for a second referendum is getting some important support.

The Trades Union Congress, an umbrella group of unions with ties to the Labour Party, is calling for a second plebiscite if Prime Minister Theresa May fails to bring home a Brexit deal that’s in workers’ interests. As a poll showed that most members of the country’s three biggest unions would support a second referendum, TUC leader Frances O’Grady issued a warning to May.

“I want to serve notice to the Prime Minster today that if we don’t get the deal that working people need then the TUC will be throwing our full weight behind a campaign for a popular vote so that people get a say on whether that deal is good enough or not,” O’Grady told the BBC on Sunday. 

O’Grady has even found a way to address one of the main concerns that second referendum campaigners have struggled with – that it would look anti-democratic. “I’m a trade unionist – there is no way a trade unionist would negotiate a deal and not go back to their members. We know that people want a say, that they don’t trust politicians, they’re really worried about what Brexit means for their jobs, their industries, their communities and their wage packets and prices going up too. So it’s only right that people should get a say.”

TUC delegates meet in Manchester for their annual conference this week, with Brexit center-stage. One of the groups backing the call for a second referendum is the Royal College of Midwives – a profession that’s already feeling the effects of the divorce as fewer European Union midwives arrive and more leave the country.

The question is whether the shift in the unions’ stance will be enough to budge the Labour Party leadership on the issue. In the run-up to Labour’s conference later this month, there’s already been some movement: Brexit spokesman Keir Starmer and Shadow Chancellor John McDonnell have both said a second vote shouldn’t be off the table. Leader Jeremy Corbyn said last week that the party’s policy wasn’t yet fixed – a slight shift from his earlier stance.

Labour wants a general election rather than a second referendum and hopes that rejecting the deal that May comes back will trigger one. But if the Fixed Term Parliaments Act makes it harder for Labour to trigger an election, another referendum might just emerge as a second-best way of trying to oust the Tories. 

Today’s Must-Reads

• Boris Johnson fueled more Conservative infighting over the weekend. His Monday Telegraph column broadens his not-so-subtle leadership bid, with an argument not to raise taxes. But if he challenges Theresa May and loses, party rules mean he can’t have another go for another year. 
• Sweden faces political gridlock after an inconclusive election result. Ian Wishart writes from Brussels that the rise of more political outsiders is a boost for the campaign against Europe.
• Telegraph columnist Roger Bootle, chairman of Capital Economics and a member of Economists for Free Trade, makes the case for a Brexit based on trading on World Trade Organization terms.

Brexit in Brief

Support in Salzburg | EU leaders will use an informal summit in Salzburg on Sept. 20 to discuss whether to issue additional guidelines to chief EU negotiator Michel Barnier to close the Brexit deal, the Financial Times reports. Austrian Chancellor Sebastian Kurz, meanwhile, hopes the European Commission will have a proposal for a deal in time for that gathering, he told Spiegel. On Friday, Barnier put a positive spin on May’s Brexit plans, in another sign that the EU is focused on getting the deal over the line. 

November’s a Date | David Lidington, the U.K.’s de facto deputy prime minister, said he’s confident a Brexit deal can be reached by November and reiterated that the withdrawal agreement is 85 percent complete. 

The Alternative | The Sunday Times reported that Johnson has abandoned plans to support a rival plan drawn up by hardline Brexiters after learning it contained plans for a post-Brexit government to build a “Star Wars”-style missile shield to protect Britain from nuclear attack and an “expeditionary force” to defend the Falklands. Jacob Rees-Mogg’s European Research Group also wants to cut income tax and VAT on domestic fuel, the paper said.

On the Markets | Pound traders may need more convincing to turn bullish, Charlotte Ryan writes. Sterling rallied in the later half of last week amid signs the two sides negotiating Brexit may settle for a broad-brush agreement by March 2019 and sort out the details later. Still, that emphasizes how vulnerable the pound is to headlines, and how little concrete progress has been made on Brexit. Sterling edged lower to $1.2913 in early trading on Monday.

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

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