Brexit Bulletin: Not Enough Votes

(Bloomberg) -- Today in Brexit: As Theresa May struggles to wrest concessions from Brussels, her chief whip warns he hasn’t got the votes to get the deal over the line next week.

Prime Minister Theresa May’s chief whip told the Cabinet on Tuesday he’s not confident he has the numbers to get her exit accord approved next week, and predicted that a defeat would be followed by Parliament forcing the U.K. to maintain closer ties with the European Union.

Julian Smith, the man with the impossible job of manufacturing majorities for May’s Brexit policy, told ministers that the vote will be tight and he doesn’t know which way it’s going to go, Bloomberg reported on Tuesday. In the event of a defeat, Parliament will then take the no-deal option off the table and call for an extension, earlier ballots indicate. Smith predicted that what would happen next is members would move to keep the U.K. in a customs union. That sounds like an argument aimed at getting Brexiteers to back the agreement.

Brexit Bulletin: Not Enough Votes

Talks in Brussels aimed at improving the pact and making it acceptable to U.K. members of Parliament didn’t produce anything on Tuesday, as expected, and negotiations could continue into the weekend. May is expected to go to Brussels in the next few days to try to finish things off. That raises the prospect of the prime minister presenting the new agreement as late as Monday, just before lawmakers have to vote on it on Tuesday.

Meanwhile, the signals from the Labour camp don’t look good for May. Labour officials are sounding increasingly upbeat that they will be able to contain the potential voting rebellion in their ranks. Speaking privately, three officials said they’re confident fewer than 10 Labour lawmakers would vote with May, even though whips have as many as 30 members of Parliament on their list of potential rebels. The less likely the deal is to pass, the less inclined wavering lawmakers might be to risk their careers to back it.

May’s latest efforts to get Labour MPs on board are falling flat. Cash handouts for pro-Brexit regions were widely criticized earlier this week and the government’s long-awaited announcement on protecting workers’ rights after Brexit — also aimed at giving Labour MPs an excuse to back the agreement — have been slammed as insufficient.

“These are flimsy procedural tweaks,” Frances O’Grady, general secretary of the Trades Unions Congress, said in a statement.

Today’s Must-Reads

  • Bank of England Governor Mark Carney says a no-deal Brexit wouldn’t be as catastrophic as previously forecast because of preparations in areas such as financial markets. But there would still be “a material economic shock.”
  • Are Theresa May’s Northern Irish allies softening? There’s not much evidence of it yet and voters appear to be behind a hard-line stance, write Dara Doyle and Rodney Edwards.

Brexit in Brief

Carmakers Sound Alarm | Toyota Motor Corp. has added its voice to warnings about potential Brexit fallout, while BMW said it would consider moving some production of its iconic Mini brand from Oxford. 

Brexit Bulletin: Not Enough Votes

External Forces | EU President Donald Tusk said “external forces” could be trying to influence the European Parliament elections in May, “as was the case with Brexit,” and called for cooperation to fight against it. “Do not allow political parties that are funded by external forces, hostile to Europe, to decide on key priorities for the EU, and the new leadership of European institutions,” he said.

No Deal, No Tariffs | The government will cut 80 percent to 90 percent of all tariffs on imported goods in the event of a no-deal Brexit, Sky News reports. That’s good news for consumers as it reduces prices, but potentially terrible news for domestic producers that would suddenly be exposed to fiercer international competition.

Fishes and Fishes | Even if the U.K. leaves the EU without an accord, there won’t be a shortage of fish sticks. Stefan Descheemaeker, CEO of Nomad Foods Ltd., told Bloomberg Television the company is stockpiling “millions, millions of fish fingers.”

Bombardier’s Warning | Canadian aircraft maker Bombardier Inc. is putting pressure on Northern Ireland’s DUP to back May’s accord, the Financial Times reports. Meanwhile, the head of the region’s civil service has warned that a no-deal Brexit would increase unemployment and threaten food supplies, according to the paper.

Ads Hit | U.K. companies are holding back on marketing spending because of Brexit uncertainty, according to the publisher of the Guardian newspaper. “You can almost see ad spend correlating to the chaos in the Houses of Parliament,” said David Pemsel, chief executive officer of Guardian Media Group. “As soon as there’s a modicum of surety, you suddenly feel people say they’re willing to commit more.”

On the Markets | The pound fell as optimism over an imminent deal faded. Sterling traded at $1.3133 early on Wednesday.

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