U.K.'s May Buys Time on Brexit With Chance to Delay Departure
(Bloomberg) -- Theresa May bought herself more time to secure a Brexit deal, handing business a reprieve from a catastrophic no-deal departure by offering lawmakers a vote to rule one out.
The U.K. prime minister heads into a Parliamentary vote on her strategy Wednesday appearing to have staved off a substantial rebellion by her own ministers. But the cost was a significant climb-down: May promised them votes to take a no-deal departure on March 29 off the table, and to delay Brexit. The pound soared.
“The United Kingdom will only leave without a deal on 29 March if there is explicit consent in this House for that outcome,” May told the House of Commons on Tuesday. She said she’ll continue attempts to reach a deal in Brussels so the U.K. can leave as planned March 29.
May’s gamble was designed to hold her fractious government together after a trio of cabinet ministers threatened revolt to avert a no-deal Brexit. But she’s far from out of the woods. The threat from rank-and-file lawmakers remains, with amendments tabled to Wednesday’s motion that would wrest control of the Parliamentary timetable -- and Brexit strategy -- from her. And she’s still battling to secure legally-binding concessions from Brussels that could persuade Tory euroskeptics to back her deal.
The signs are Brussels will keep her waiting: EU diplomats don’t see a breakthrough until March 11, the day before May’s promise to lawmakers of a vote on a new deal. Even then, it would only be a provisional agreement with the European Commission, with the endorsement of the 27 national governments coming later in the month.
Under May’s plan, if Parliament rejects her deal in a vote by March 12, there will be a vote by March 13 on whether to leave the EU with no deal. And if that’s rejected, the Commons will vote on a short extension to the deadline -- probably until the end of June at the latest.
The pound jumped to a five-month high as the threat of a no-deal Brexit receded, and business groups took respite in May’s words. The manufacturing lobby, MakeUK, welcomed the move, and called for Parliament to unite behind a deal. That was echoed by the biggest lobby group, the Confederation of British Industry.
“To avoid a hammer blow to firms and livelihoods, delay cannot simply be an extension of stalemate,” CBI Director-General Carolyn Fairbairn said. "Compromise is the only way.”
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May’s tactical move looks to have averted mass resignations of pro-EU ministers in her team, and prevented the crushing defeat that almost certainly awaited her on Wednesday.
There’s also a chance her gamble could encourage pro-Brexit politicians to get behind her unpopular exit agreement. With Labour now backing a second referendum, and May opening the door to a delay, the prospect of losing Brexit altogether could convince at least some euroskeptic Tories to back her.
Writing in the Daily Mail on Wednesday, May said her engagement with the EU has "begun to bear fruit" and urged Parliament to "do its duty so our country can move forward."
Veteran Brexit campaigner Iain Duncan Smith insisted he had no problem with the premier’s offer. A delay by two months won’t make much difference to the course of Brexit, he told Bloomberg.
May’s statement followed a fractious cabinet meeting on Tuesday morning. The three ministers who threatened a revolt to stop a no-deal Brexit were attacked for disloyalty by their colleagues, people familiar with the meeting said. But now Amber Rudd, Greg Clark and David Gauke are all satisfied with May’s promises and will not rebel, the people said.
There were signs also that junior ministers who had been preparing to rebel were pacified.
“Common sense has prevailed, and the country’s interest has been put first,” Defense Minister Tobias Ellwood said in an interview. “But crashing out has only been temporarily avoided, and there is still much work to be done to guarantee the threat of a no-deal Brexit is removed.”
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