Hunt Said to Advise Keeping No Deal on Table: Brexit Update

(Bloomberg) --

Brexit is in stalemate. The European Union said it’s still waiting for Theresa May to come up with something new to break the deadlock. Parliament is plotting to seize control, with the Labour Party inching closer to proposing a second referendum.

Key Developments

  • Corbyn proposes a vote in Parliament on possible second referendum
  • EU says it’s still waiting for May to make clear what she wants
  • EU says no deal would mean a hard border in Ireland
  • Dyson, led by Brexit-backing billionaire James Dyson, is moving its head office to Singapore

Hunt Said to Advise May to Keep No Deal on Table (5:10 p.m.)

At this morning’s Cabinet meeting, Foreign Secretary Jeremy Hunt argued that if May got her deal through Parliament by agreeing to ask for a time limit on the Irish backstop, the EU could be forced to compromise. He also advocated leaving a no-deal Brexit on the table.

But Justice Secretary David Gauke warned of disquiet in the Conservative Party ranks, from members who fear the government is sleepwalking toward a no-deal Brexit, according to four people familiar with the discussions. He urged May to threaten Tory rebels with no Brexit instead.

And Natalie Evans, who’s in charge of getting legislation through the House of Lords, warned that chamber will defeat the government and insert an amendment into the Trade Bill calling for a customs union with the EU.

Osborne Calls on May to Rule Out No Deal (2 p.m.)

Former Chancellor of the Exchequer George Osborne has been weighing in on Brexit from the World Economic Forum in Davos.

Speaking to Bloomberg Television, Osborne said May is the only person who thinks her deal can be renegotiated, and the U.K.’s only options right now appear to be a no-deal Brexit, or delaying or stopping it entirely.

Since the former is unacceptable, May should rule it out, he said, adding that another general election is a definite possibility. He also said a no-deal Brexit would be the “biggest act of protectionism” in U.K. history.

No Deal Needs 24/7 ‘Command and Control’ Ops (1:15 p.m.)

John Manzoni, chief executive of the U.K. civil service, said plans are being made for “several thousand” staff to be switched into a “command and control” role in the event of a no-deal split from the European Union.

“This is a complicated problem. I’ve never pretended it’s all going to go swimmingly well in the event of no deal,” Manzoni said at an event in central London. “There’s a period the machinery will be working 24/7 in a command and control mode. We’re largely ready for that.”

Civil servants are waiting for politicians to decide the nature of Britain’s future relationship with the EU, and it will take time to develop and build systems for new border arrangements, he said.

“From the moment we decide exactly what border we want it will take several years to put it in place,” he said. “The important thing to decide if it is frictionless, minimum friction, what kind of thing.”

EU: No Deal Can’t Mean Status Quo (1 p.m.)

Don’t mistake no-deal Brexit plans for a continuation of the status quo, the European Commission says. In an internal memo to EU government envoys, seen by Bloomberg, the bloc’s executive arm notes that “contingency measures should not replicate the benefits of membership of the Union, nor the terms of any transition period.”

The comments highlight concerns in Brussels that some member-states may seek to cushion the outcome of hard Brexit via national deals with the U.K which will extend current ties beyond the withdrawal date.

Any contingency measures should be temporary, taken with the sole interest of the EU in mind and can’t be substitutes for delays in the preparation process for a hard Brexit, according to the document dated Jan. 18. The Commission also suggests some countries may need a higher “sense of urgency” to prepare with “only a few weeks left before the withdrawal date.”

EU ambassadors in Brussels are going to discuss the document at a closed-doors meeting on Wednesday afternoon.

The EU also warned that in the event of no deal, a hard border would emerge on the island of Ireland.

May Likely to Oppose Cooper-Boles Plan: Official (12:55 p.m.)

A U.K. official told reporters May will probably travel to Brussels after Parliament votes on Brexit amendments next Tuesday. The government is also likely to oppose the plan laid down by Labour lawmaker Yvette Cooper and Conservative Nick Boles to delay Brexit, the official said.

May to Meet Unions on Workers’ Rights (12:45 p.m.)

May’s spokesman, James Slack, told reporters the prime minister will hold meetings with labor union leaders -- including Unite’s Len McCluskey -- this week to discuss Brexit-related issues, including workers’ rights and environmental standards. May is also holding a call with business leaders today at 2:30 p.m.

At Tuesday’s Cabinet meeting, ministers got a security briefing from U.K. intelligence services, and were updated on planning for a no-deal Brexit, Slack said. Meanwhile the government is committed to getting the necessary Brexit legislation through Parliament before exit day in March, he said.

EU Needs to Know What U.K. ‘Really Really Wants’ (12 p.m.)

May has said she wants to re-negotiate the divorce deal to make it more palatable to Parliament. But the EU says it’s still waiting to hear what that means.

“There is nothing else that I can meaningfully say. I think that I have exhausted all our arguments, all our positions; there is nothing new,” Margaritis Schinas, spokesman for the European Commission, told reporters. “And we expect the United Kingdom to tell us what they want, what they really, really want.”

European Commission Vice President Jyrki Katainen went further. Theresa May’s indecision “has been the problem since the very beginning when we started negotiating on Brexit,” he told Bloomberg Television in an interview.

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