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May Faces Losing Control Over Brexit Despite Gamble on Backstop

May abandoned the agreement she’s spent the past 18 months negotiating with the EU and threw a new proposal to re-write the deal.

May Faces Losing Control Over Brexit Despite Gamble on Backstop
Theresa May, U.K. prime minister, departs number 10 Downing Street in London, U.K. (Photographer: Simon Dawson/Bloomberg)  

(Bloomberg) -- Theresa May faces losing control of Brexit to Parliament on Tuesday in a series of crucial votes that will shape Britain’s split from the European Union.

Despite a last minute gamble aimed at buying off rebels in her Conservative Party, the prime minister will face a knife-edge battle to fight a proposal that would hand Parliament the power to put the whole process on hold.

The leadership of the opposition Labour Party was preparing to order its MPs to vote for the amendment, according to three people familiar with the matter. The plan aims to prevent the catastrophic scenario of crashing out of the bloc without a deal, but critics see as an attempt to thwart Brexit.

With Labour backing, the amendment, known as Cooper-Boles, would stand a good chance of winning. That would be good news for business and markets but a humiliating loss for May.

Fighting to keep her Brexit plan alive -- and her party united -- the prime minister made a dramatic bid on Monday night to forge a compromise. She threw her weight behind a separate proposal to effectively rewrite the agreement she spent 18 months negotiating.

May urged hundreds of Conservative politicians crammed into a room inside Parliament to support another amendment that would strip out the so-called backstop plan for the Irish border, wrecking a compromise she’s agreed to with the EU in the hope of securing one with her own party. On Tuesday morning, it was still unclear if her efforts to keep her party united behind at least a version of her Brexit plan would succeed.

Resolving the Impasse

May’s move was intended to win over hardline Brexit backers who joined with opposition MPs on Jan. 15 to reject her EU divorce package. It was the biggest government defeat in the House of Commons for more than a century and prompted two weeks of soul-searching and debate over how to resolve the impasse inside the government.

May Faces Losing Control Over Brexit Despite Gamble on Backstop

Previously implacable factions in the Conservative Party have even held private talks to seek a consensus around asking the EU for a modified backstop and an extra year’s transition. Whatsapp discussions between politicians, including leading euroskeptic Jacob Rees-Mogg and Pro-EU Nicky Morgan, were made public Monday night and confirmed by the two sides.

If the House of Commons does not ratify a Brexit agreement, the U.K. will tumble out of the bloc with no new trading terms in place on March 29. That risks a recession, a hit to the pound and a crash in house prices, according to official analysis from the authorities in Britain.

Irish Backstop

May, who will close Tuesday’s debate, now hopes her Tory party will say clearly what it wants to change in the deal she’s struck with the EU. Her aim is to send a message to Brussels that the Irish border backstop must be ditched or radically redrafted, and persuade the EU to change position so a new deal can pass through Parliament. The EU has repeatedly refused to budge.

May Faces Losing Control Over Brexit Despite Gamble on Backstop

According to an EU official the amendment proposed by Graham Brady has little chance of persuading the bloc to make compromises. The proposal appears to only leave scope for the backstop to be overtaken by a better solution -- and there’s no evidence there is one. It will be “extraordinarily difficult” for the U.K. to win concessions or remove the backstop unless it moves its own red lines, the official said.

‘String Things Out’

So far, May’s euroskeptic colleagues in the European Research Group have said they’re unlikely to be persuaded to support her call, though they will not finalize their position until just before Tuesday’s votes.

Instead, the Cooper-Boles plan could now win more backing from politicians who are determined to stop a no-deal Brexit and ensure they have the power to delay the U.K.’s divorce from the EU if necessary.

“When will the PM understand that the ideological leaders of the ERG do not want a deal? They just want to string things out until it is too late,” Boles said in a posting on Twitter. “Pragmatic Conservatives should support the Cooper amendment tomorrow and shoot the no-deal fox.”

In an effort to appease those Tories who are proposing to back Boles and Cooper’s plan to delay Brexit, May promised they would have another chance to vote to stop Britain leaving the bloc without a deal, according to people in the room Monday. She said the government will come back to make a statement to Parliament on the next steps if no Brexit deal has been agreed by Feb. 13.

--With assistance from Robert Hutton, Kitty Donaldson and Alex Morales.

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Robert Jameson

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