Brexit Bulletin: No Deal vs Political Suicide

(Bloomberg) -- Today in Brexit: The number of Tories fighting to stop a no-deal exit is set to grow, but it’s not clear they can succeed. 

What’s Happening?

“Don't underestimate how many members of Parliament desperately want to remain members of Parliament.”

That’s the advice of Nick Boles, the former Tory lawmaker, to those who are betting that the House of Commons will step in to prevent the next prime minister from leading the country out of the European Union without a deal.

As lawmakers’ opportunities to block a chaotic exit narrow, the one option that will remain until the end is to bring down the government with a no-confidence vote. But that requires enough politicians to commit career suicide, since a vote against their government disqualifies them from running again for the party. That’s why Boles, who quit the Conservatives because of colleagues’ refusal to compromise on Brexit, now reckons a messy departure is the likely outcome.

Still, the ranks of those determined to prevent a chaotic exit look set to swell. Chancellor of the Exchequer Philip Hammond indicated on Tuesday that once he leaves the government—which he seemed to take for granted under Theresa May’s successor—he will fight against a no-deal departure.

“I believe that it will be for the House of Commons, of which I will continue proudly to be a member, to ensure that doesn’t happen,’’ he told Parliament. Labour’s shadow chancellor, John McDonnell, jumped on his comments, praising the chancellor’s “vehemence” and predicting there would be a small window to prevent the scenario businesses fear most as the Oct. 31 deadline approaches.

May has also hinted she might join the rebels once she leaves office later this month, to make sure Britain doesn’t tumble into the legal limbo and potential job destruction of a no-deal departure. More soon-to-be ex-ministers could boost the numbers further.

Boris Johnson, the frontrunner to replace May, was asked yesterday how he would deal with the rebels in his party who want to stop a no-deal exit. His reply: “I would love them up.”             

Today’s Must-Reads

• EU leaders tap Germany’s Von Der Leyen as European Commission president. On Brexit, that probably means business as usual.
• Switzerland’s standoff with the EU is seen as a warning to the U.K. over Brexit. Take a look at how much the Swiss economy depends on the EU.
• Can the next U.K. prime minister command a majority in the Commons? The FT’s James Blitz reckons the new premier won’t be challenged to show he has a majority until October.

Brexit in Brief

Backstop Must Go | Boris Johnson and leadership rival Jeremy Hunt both vowed to rip up the controversial Irish backstop and yet make sure no policed borders emerge between Northern Ireland and Britain as a result of Brexit. Hunt reckons the technology already exists to allow for an invisible border on the island of Ireland. 

Another Election? | The Economist Intelligence Unit predicts Johnson, if victorious, will call an election this winter after the EU refuses to make meaningful changes to the divorce agreement and Parliament blocks his efforts to leave without a deal. Tim Ross reported last month that Johnson’s backers were war-gaming an early election.

Trade War Warning | Bank of England Governor Mark Carney warned of damage to the global economy from rising protectionism, describing a “widespread slowdown” that may require a major policy response. His comments sparked a drop in the pound below $1.26 to the lowest level of the day and the weakest since mid-June.

Labour Shift | More than a dozen members of parliament would now back any Brexit deal, the Sun reports, increasingly the chances that the next prime minister might be able to get a version of May’s deal through the House of Commons. Labour MP Lisa Nandy said on Tuesday she would now vote for an agreement.

Banker Cuts | Mitsubishi UFJ Financial Group Inc. is aiming to cut about 50 managerial jobs in London as part of a voluntary redundancy program that is focused on the U.K. capital. 

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Leila Taha

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