Brexit Bulletin: ‘Not Wild Unicorns’

(Bloomberg) -- Today in Brexit: Prolonged EU membership now looks increasingly likely.

Parliament has taken control of the Brexit process, and that probably means the U.K. isn’t leaving the European Union anytime soon.

Prime Minister Theresa May admitted on Monday that her deal didn’t have enough support to put it to another vote, and U.K. lawmakers swiftly moved to take the matter out of her hands. Three government ministers resigned to vote against her and put rank-and-file members in charge of the agenda. On Wednesday lawmakers will vote on alternatives to her unpopular deal, which will probably include a second referendum, staying in the customs union and single market, or even canceling Brexit altogether.

“It’s essential we should be able to look at all the serious options, not wild unicorns, but things we could actually do to carry this process forward,” former loyalist Tory minister Oliver Letwin, who proposed the plan, told Parliament. “We should allow ourselves a couple of days to do what should have been done over a couple of years.”

It’s still not confirmed exactly how the voting will be structured, whether a consensus can actually be found in Parliament and, crucially, whether May will implement what Parliament decides. She refused to commit on Monday, and hinted at the problematic prospect that lawmakers might ask her to do something that goes against her 2017 election pledges. 

But with May saying more clearly than ever on Monday that she won’t lead the U.K. over the no-deal cliff without Parliament’s consent, a long extension is now shaping up as the most likely outcome. It would mean May going back to Brussels in early April and asking for more time to find a new approach. The EU, which wants the U.K. to keep close ties and likes the idea of a cross-party approach, would probably say yes, on the strict condition Britons take part in European elections. Some officials in the bloc will hope an extension leads to a second referendum to call the whole thing off. 

There is one last shred of hope left for May’s deal: If Parliament quickly lines up behind a soft Brexit, anti-EU hardliners will be forced to decide whether they want her compromise version now or a deeply diluted Brexit in a year’s time. May coined a new phrase on Monday aimed squarely at scaring them into backing her—the risk of a “slow Brexit.” Shortly afterward, Jacob Rees-Mogg opened the door to supporting her deal, though only on the tricky condition that the Northern Irish Democratic Unionist Party did so first.

The trouble for the prime minister is that she only has until Friday to get her deal passed if she wants to deliver Brexit this spring. May has run down the clock, and now she’s running out of time. 

Today’s Must-Reads

• Brexit panic leads to desperate measures. One stockpiler has been consulting the Mormon survival guide, Kitty Donaldson and Thomas Penny report.
• JPMorgan is pushing about 300 London-based investment-banking employees to sign contracts agreeing to leave the U.K. in the event of  a no-deal Brexit.
• Civil servants are alarmed by the prime minister’s focus on party rather than national interests, Rachel Sylvester writes in the Times. 

Brexit in Brief

EU Braces | The European Union said a no-deal Brexit was “increasingly likely,” as it sought to reassure businesses and citizens that it’s ready. It has a telephone helpline and put out fact sheets for citizens, in 23 languages.

General Election? | Brexit Secretary Steve Barclay raised the prospect at the weekend that if Parliament tells the government to negotiate something that violates its manifesto pledges, then the next step could be a general election. May didn’t go so far on Monday, but did reference more than once her 2017 pledge to leave the customs union.

Corbyn Gets Closer | Labour leader Jeremy Corbyn said the House of Commons should consider putting the Brexit deal to a confirmatory public vote. The idea of a vote that pits May’s deal against remaining in the bloc has been put forward by a pair of Labour lawmakers and could gain traction as  Parliament tries to find a way forward.

Another Brexit Lawsuit | Jolyon Maugham, the lawyer behind a landmark ruling allowing the U.K. to change its mind on Brexit, returns to court on Tuesday for a new case, an 11th-hour challenge to the government’s plans for drug supplies in a no-deal scenario. His lawsuit centers on plans to let pharmacists hand out different medications for the same condition if there’s a serious shortage. 

Leavers Gloomy | A majority of  Britons think Brexit will hurt the economy, and Leave voters have become more pessimistic, according to a survey by pollster John Curtice. Eighty percent of Leave voters and 85 percent of Remain voters believe the government is handling Britain’s exit badly. The study also found that far more people identify strongly as a “Remainer” or a “Leaver” than as a supporter of a political party.

On the Markets | The pound rallied after the vote in Parliament, but on early Tuesday traded flat at $1.3189.

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To contact the editor responsible for this story: Anne Pollak at apollak@bloomberg.net, Timothy Coulter "Tim"

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