Brexit Bulletin: Will May U-Turn on Customs?
Brexit Bulletin: Will May U-Turn on Customs?
(Bloomberg) -- Today in Brexit: With a delay in the bag, Theresa May signals more concessions ahead.
Is Theresa May about to make her biggest U-turn yet? She dropped a big hint in Parliament on Thursday that she’s less opposed to staying in a post-Brexit customs union with the European Union than might appear. That could reveal the way to a compromise with opposition leader Jeremy Corbyn.
Just hours before she held a meeting with Corbyn, May told MPs: “There is actually more agreement in relation to a customs union than it is often given credit for when different language is used.”
The issue has been a thorny one because many of May’s Conservatives passionately back an independent U.K. trade policy after Brexit. That’s at odds with signing up to a common external tariff policy with the EU.
It’s the closest she’s come to admitting that there’s something very similar already hiding in the deal she signed with the EU but has so far failed to get past Parliament. (The EU side has long thought a customs union is where final trade talks would end up.)
The key bit is this: May wants something like a customs union but doesn’t call it that, while Corbyn wants a customs union with add-ons that would give the U.K. some kind of say in trade policy.
While Conservatives would find it hard to swallow—and there’s nothing like a Tory majority for the policy in the House of Commons—May’s attorney general, Brexiteer Geoffrey Cox, might have provided her with the new script. He said earlier this month that he’d prefer to leave the bloc in a customs union than not leave at all. The six-month Brexit extension was agreed to this week and the prospect of the U.K. taking part in European Parliament elections in May both provide new impetus to that argument.
For months now May has presented members of Parliament with simple choices in her bid to get Brexit delivered. So far they haven’t worked. The next one could be this: It’s better to leave now, with an unpleasant compromise, than risk never leaving at all.
But positions have become so entrenched, with arcane bits of policy becoming matters of faith among tribes of MPs, that even amidst their deep Brexit fatigue, it’s hard to see them falling into line.
Today’s Must-Reads
- Brexit exposes a painful disconnect between England and Britain, writes Bloomberg’s Alan Crawford
- The Telegraph says the choice now is between “Brexit and Mrs May.”
- With Britain facing another six months of Brexit limbo, the costs are stacking up for U.K. industries. Take a look at the costs for six major firms.
Brexit in Brief
Tiggers Prepare | The Independent Group of Conservative and Labour defectors will stand candidates for the European Parliament in all regions of the U.K.—if it can register on time with the Electoral Commission. They’ve named former Tory Heidi Allen as their leader, with former Labour MP Chuka Umunna their spokesman. “All of our candidates will be making the case for a People’s Vote,” Umunna said. Pro-Brexit politicians are also gearing up for a campaign that could end up looking a bit like a referendum on the split. Nigel Farage writes in the Telegraph today that his new Brexit Party wants to start a “revolution,” starting with EU elections. Farage launches his party today in Coventry.
Boris Courts the DUP | Democratic Unionist Party leader Arlene Foster and deputy Nigel Dodds met Boris Johnson in the House of Commons, the Times reports. On Thursday, Foster declined to say whether she had confidence in May, saying only the Northern Irish party has a deal with the Conservative Party to allow it to govern, rather than with May herself, and that the DUP will work with whoever is Tory leader.
Standing Down | The government has stood down some 6,000 civil servants who had been preparing for an imminent no-deal Brexit. Those seconded from other departments will now return to their regular jobs, the Guardian reports.
Keep Running | Some British lawmakers suspect May will keep the current session of Parliament running until October so that she doesn’t have to renegotiate the arrangement with the DUP or risk a revolt by her backbenchers over a new Queen’s speech, Kitty Donaldson reports.
Borrowing to Stockpile | What does May’s extension mean for business? More costs. One small company told Bloomberg’s Joe Mayes it now needs a loan to cover the cost of the stockpiling it’s been building up in preparation for a no-deal split. “It just screws us,” said Guy Blaskey, founder of petfood maker Pooch & Mutt. “Until we know what’s going on, we need to keep our stock levels high.”
Fleeing U.K. Assets | Investors fled U.K. stock funds for a fourth week, taking the total that’s bled from those funds to nearly $25 billion since the referendum, the Financial Times reports.
On the Markets | Pound traders are relaxing, with gauges of future price swings easing because of the extension. Volatility options that cover the new Oct. 31 exit date fell to the lowest since July. Sterling was little changed at $1.3075 early on Friday.
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