Theresa May, U.K. prime minister, speaks during a news conference at the European Union (EU) leaders summit at the Europa building in Brussels, Belgium. (Photographer: Jasper Juinen/Bloomberg)

May to Draft New Customs Law for Brexit Deal With Corbyn

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Theresa May’s officials are drafting a new law in preparation for a Brexit deal between the government and the opposition Labour party that would break the deadlock that’s paralyzed the U.K.’s divorce from the European Union.

According to people familiar with the matter, new clauses are being written into the Withdrawal Agreement Bill that would provide for a customs union-style arrangement guaranteeing there are no checks on goods crossing the U.K.-EU border.

May to Draft New Customs Law for Brexit Deal With Corbyn

The move is an attempt to meet a key demand from Jeremy Corbyn’s Labour party, which has said it wants to protect jobs and trade. But it might still not be enough to persuade the opposition leader to sign up to a blueprint with the prime minister, his arch rival, when their teams meet again on Tuesday. And there’s a risk that pro-Brexit cabinet ministers like Liam Fox and Andrea Leadsom will quit rather than sign up to such a close tariff and trade regime with the EU.

Britain was due to leave the EU at the end of March, but May has been forced twice to ask the bloc to allow more time to finalize the terms of the split after members of Parliament repeatedly rejected her deal.

If talks with Corbyn break down it might hasten May’s departure and trigger a Tory leadership contest that could see her replaced by a leader in favor of leaving the bloc without a deal. It would also increase the possibility of a general election or even another referendum to break the deadlock.

Doing a Deal

Months of political stalemate and uncertainty over the future of Brexit have hurt business investment in the U.K., and industry leaders are crying out for a resolution.

Writing in the Mail on Sunday newspaper, May said last week’s local election results -- which were disastrous for her Conservatives and bad for Corbyn’s Labour party -- showed that voters wanted them to get on with delivering Brexit.

“To the leader of the opposition, I say this: let’s listen to what the voters said in the elections and put our differences aside for a moment,” May wrote. “Let’s do a deal.”

May opened cross-party talks with Labour last month after the House of Commons voted for a third time to reject the divorce package she’d negotiated with the EU.

A key meeting on May 7 will determine whether the two sides can strike an agreement on any single plan, according to the people, who asked not to be identified because the deliberations are confidential. If they can’t, the focus will switch to whether Labour and the government can agree a way to put a range of options to a series of so-called indicative votes in Parliament, allowing rank-and-file politicians to choose the way forward.

Trade Deals

Labour is said to want May to entrench the customs arrangement into law permanently, guaranteeing it will remain in place even after the next general election, scheduled for 2022. The Conservative government is resisting this demand.

May to Draft New Customs Law for Brexit Deal With Corbyn

May is offering Corbyn arrangements that would allow a future Labour government to pursue a full customs union with the EU, but permit a future Tory administration to adopt a looser relationship that allows Britain to strike trade deals with other countries around the world, according to one person familiar with the discussions.

Progress has been easier in other areas of the talks including environmental protection and workers’ rights, according to the people.

“We have to find a way to break the deadlock,” May wrote in her article. “We will keep negotiating, and keep trying to find a way through. Because the real thing that matters now is delivering Brexit and moving on to all the other issues people care about.”

‘Bad Faith’

May has promised to leave office once the divorce negotiations are concluded, to allow a new Tory leader to take over and lead the next phase of Brexit talks focusing on the future trade relationship with the EU.

While some Tories sounded optimistic, John McDonnell, Labour’s Treasury spokesman, poured cold water on the idea that the talks are close to success.

He told the BBC that weekend leaks of what May was going to offer Labour represent “bad faith” -- the talks are supposed to be confidential, he said. Asked if he trusted her, he replied: “No. Not after this weekend. She’s jeopardized the negotiations for her own personal protection.”

Both leaders face a backlash from Members of Parliament opposed to a cross-party deal. More than 100 Labour lawmakers signed a demand for a referendum on any agreement last week, and over the weekend former minister Ben Bradshaw was among MPs demanding the party should withdraw from the “damaging” talks.

Tory lawmaker Lee Rowley’s message to May about the negotiations with Corbyn was succinct. “Stop this madness,” he wrote on Twitter, saying his views are supported by voters. “People didn’t vote for you to do a deal with a Marxist.”

©2019 Bloomberg L.P.