Theresa May, U.K. prime minister, awaits the arrival of Jacinda Ardern, New Zealand’s prime minister, in Downing Street in London, U.K. (Photographer: Luke MacGregor/Bloomberg)

May Rips Up Divorce Plan to Keep Party United: Brexit Update

(Bloomberg) --

Theresa May has ripped up her Brexit plan in a bid to keep her party united and she faces key votes today that will put her plan B to the test. She’s backing an amendment that would give her a mandate to go back to Brussels to renegotiate her divorce deal. Another amendment, put forward by the opposition, aims to put Brexit on hold.

Key Developments

  • Speaker John Bercow will pick which amendments will go to a vote after midday. May will open the debate this afternoon at around 1:30 p.m. Voting starts at 7 p.m.
  • May is trying to convince Tory lawmakers to back an amendment that calls for the Irish border backstop -- the most toxic part of the deal -- to be scrapped.
  • If it’s passed, it could serve as a first step toward a compromise -- known as the Malthouse plan -- which is being hashed out among Tory lawmakers and was discussed by the Cabinet today. What is it? See 9:15 a.m.
  • The EU has long rejected changing the Irish border backstop. Officials don’t like the compromise idea either as it includes a rewrite of the backstop.
  • The other amendment, which aims to delay Brexit -- known as Cooper-Boles -- received the backing of the opposition Labour Party. Markets like this option.

ERG Support for Brady Amendment Hinges on PM (12:50 p.m.)

Tory lawmaker Steve Baker, a prominent member of the Brexit-backing European Research Group, told Sky News the ERG will wait to listen to the prime minister’s statement before deciding whether to support the Brady amendment on the Irish backstop this evening. The group will make that decision at 6 p.m.

Baker also urged Conservatives to get behind the so-called Malthouse compromise plan, which he said would ensure no hard border with Ireland by replacing -- or matching the effect of the backstop -- via alternative means.

It’s a view, though, that’s not likely to be shared by the EU (see 11:30 a.m.)

May to Outline Latest Thinking (12:36 p.m.)

May will get up in front of lawmakers this afternoon and open a 5-1/2 hour debate where she will explain why the government is coming out in support of the Brady amendment, which basically would give her a mandate to return to Brussels to re-open negotiations on the much-loathed Irish backstop. May is trying to keep Conservatives together and if this amendment gets picked and passes -- two big ifs -- she will have at least rallied her fractious party behind her. She will also feel more emboldened to go to EU leaders with a clear demand. EU has repeatedly said the U.K. doesn’t know what it wants.

Labour Backs Amendment to Put Brexit on Hold (12:15 p.m.)

The opposition Labour party backs the so-called Cooper-Boles amendment, which seeks to delay Brexit to avoid a no-deal scenario, and will tell its lawmakers to vote for it, according to two people familiar with the situation.

That gives it a fair chance of passing -- if enough Tories rebel, and enough Labour MPs do what they Corbyn tells them to do.

Malthouse Compromise Is ’Prolonging Madness’ (11:30 a.m.)

One EU official said the compromise Malthouse plan is “just another step prolonging this madness.” Any move to reopen the backstop wouldn’t fly, particularly because all 27 EU leaders had given their names to it after 18 months of negotiation, the official said.

Negotiators on both sides had spent months examining different possibilities to prevent a hard Irish border -- including exploring whether technology could be used -- and settled on the only realistic way, the official said.

The EU doesn’t have any particular objection to a longer transition period and the official pointed out that the possibility of an extension until the end of 2021 is already provided for in the Withdrawal Agreement.

The EU also reckons Parliament’s problems with Brexit ran deeper than the Irish border arrangement.

Remainer Won’t Back New Compromise (11:25 a.m.)

Sarah Wollaston, a Tory MP who wants a second referendum, said she wouldn’t back the Malthouse compromise and won’t vote for the amendment on the Irish backstop today.

DUP Backs Malthouse Compromise (11.19 a.m.)

Northern Ireland’s DUP, the party that props up May’s minority government, gave its support to the Malthouse plan. Leader Arlene Foster said the compromise gives a “feasible alternative” to the backstop.

“If the Prime Minister is seeking to find a united front, both between elements in her own party and the DUP, in the negotiations which she will enter with the European Union, then this is a proposition which she should not turn her back on,” Foster said, according to an emailed statement.

Cabinet Said to Discuss New Tory Compromise (11 a.m.)

The Cabinet is now discussing whether to throw the government’s weight behind the a new compromise for Brexit -- known as the Malthouse compromise -- according to a person familiar with the matter.

May herself is said to have asked Tories to produce a solution and they have come up with this package — which is winning wide support among MPs on all sides of the Brexit debate, the person said.

If May does back the Malthouse plan — and an announcement could come later today — she will be close to getting enough votes on her own side to pass a Brexit deal in Parliament.
The problem is, it’s not at all certain that the other 27 EU countries will even consider such a plan, let alone agree to it.

Rees-Mogg Signals Support For May’s New Plan (10:30 a.m.)

Jacob Rees-Mogg, who leads the caucus of pro-Brexit hardliners, indicated he may be able to support the amendment on the Irish backstop. It depends what May says today during the debate and the clarifications she offers about what the amendment would mean, he told the BBC.

Fox: May Plans to Reopen Divorce Agreement (9:50 a.m.)

International Trade Secretary Liam Fox said passing the Brady amendment today would send May back to Brussels with “a strong mandate” to seek a compromise on the Irish backstop, and that skeptical lawmakers should be reassured that May will seek to reopen the Withdrawal Agreement with the EU to secure that compromise.

Many lawmakers are worried that the phrase “alternative arrangements” to the backstop in the Brady amendment risks yielding only more letters of reassurance from the EU on the backstop, rather than legally binding changes to the backstop they want, Fox said. But the government intends for the compromise to be legally binding, he said.

Despite the EU’s repeated statements it won’t accept any renegotiation, Fox said “there have been some changes in recent times dictated by reality.” He said the European Commission could be flexible if it meant the U.K. leaving in an orderly fashion with a deal. “No negotiation is over until we have reached the end of this process,” he said.

“We have seen the German economy weakening, we have seen the French economy weakening,” Fox said. “I think we still have time to reach a compromise.”

More on Proposed Tory Compromise (9:15 a.m.)

Speaking to Bloomberg TV, Tory MP Nicky Morgan said she would vote for both the Brady amendment to ditch the so-called Irish backstop, and the Cooper-Boles plan to delay Brexit. The key, she said, is for Parliament to find a way to secure a “negotiated” exit from the EU -- indicating she sees both amendments as compatible the potential compromise that emerged overnight.

So what does the compromise involve? According to snippets from Morgan and others, the basic outline is:

  • May goes back to Brussels to renegotiate the backstop arrangement -- something the EU has said it won’t do -- potentially armed with a parliamentary majority for the Brady amendment which, according to Morgan, would tell the EU clearly that “the backstop is the issue”
  • The plan calls for the Brexit transition period to be extended by a year to Dec. 2021 to negotiate the future partnership
  • If negotiations on the backstop fail, the U.K. offers to pay for a “standstill” period to Dec. 2021 -- again to prepare for the future relationship

There are significant obstacles, though, not least the fact that this compromise plan isn’t among the amendments being voted on tonight. So in order for it to work, it would likely need a majority for Brady’s backstop amendment as a first step.

Perhaps more significant is the fact that as Morgan acknowledged, the compromise also hinges on the reaction from the EU -- which has repeatedly ruled out renegotiating the Withdrawal Agreement. It’s very unlikely the bloc will accept any “standstill” period that doesn’t include a backstop.

Sturgeon: Independence Push Hinges on Brexit (8:30 a.m.)

Scotland’s First Minister Nicola Sturgeon told Bloomberg TV she’ll make a decision on when to push for another independence referendum when the U.K.’s Brexit path is clearer.

She said she’ll wait and see if the U.K. leaves the EU with or without a deal, whether Article 50 is extended or whether there’s another referendum on Brexit or a general election before making decision on the timing to push for another vote on independence. She also said her Scottish National Party MPs in London would vote for the Cooper-Boles amendment to delay Brexit.

“The whole experience of the last two-and-a-half years for Scotland has underlined the importance of having decisions about our future taken in Scotland rather than in Westminster,” she said.

Compromise Plan Has Widespread Support: Morgan (8 a.m.)

Tory MP Nicky Morgan, who helped broker a compromise between rival Conservative factions, said her plan commands “quite widespread support” in the party, although it still needs to be discussed with the EU.

“We hope that the prime minister, even if it’s not captured in an amendment people are voting on today, will be able to perhaps say this is a plan that we can take forward,” Morgan said in a Bloomberg television interview.

Morgan’s position on Tuesday’s votes was complicated. She said she will be voting for both the Graham Brady amendment calling for the Irish border backstop to be scrapped -- which May has now backed -- and Yvette Cooper’s plan to give Parliament the power to delay Brexit.

Earlier:

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