Theresa May, U.K. prime minister, pauses during a news conference. (Photographer: Simon Dawson/Bloomberg)

EU Said to Consider Extension of Many Months: Brexit Update

(Bloomberg) -- The U.K. stands at its most dangerous crossroads in decades after Parliament emphatically rejected Theresa May’s Brexit deal, and will vote later on whether to oust her government.

Follow TOPLive coverage of U.K. government confidence vote

Key Developments

  • Parliament’s confidence vote in May’s government at 7 p.m.
  • EU discussing an extension to Brexit deadline beyond July
  • May says a general election would delay exit day
  • May to speak to EU leaders tomorrow, person familiar says
  • Pro-Brexit Tory hardliners pledge to back May in confidence vote

May to Speak to Leaders as EU Plots Extension (5:10 p.m.)

The European Union is willing to delay Brexit well into the second half of 2019, diplomats said, as governments examine ways of preventing the U.K. crashing out of the bloc without a deal.

The EU is likely to approve any U.K. request to extend the Article 50 negotiation period beyond March 29 and the extension could go well beyond the first sitting of a newly elected European Parliament at the start of July, three diplomats said. One said September was a possible new deadline.

However, there isn’t complete agreement among EU member states, with some thinking the best strategy is still to insist that the U.K. leaves on the original date, or with only an extension of a few weeks to enable the British Parliament to pass necessary legislation, a fourth diplomat said. Approval for a delay needs the unanimous support of all 27 remaining EU governments.

May said on Wednesday that it was still her plan to leave the EU on March 29 but didn’t rule out a possible extension. The prime minister is planning to speak to EU leaders tomorrow about her Brexit strategy, according to another person familiar with the situation.

Ex-Labour Independent to Vote Against Corbyn (5 p.m.)

Former Labour MP John Woodcock, who now sits as an independent, made Corbyn’s task of winning the no-confidence vote more difficult by announcing that he will not be supporting it.

He said he had spoken to Labour members who are “wrestling with the consciences” because Corbyn “is as unfit to lead the country as he was when they voted in the no-confidence motion of the party” in 2016. Corbyn lost that vote of his own MPs by 172-40.

Pro-EU MPs Focus First on Blocking ‘No Deal’ (4:35 p.m.)

Lawmakers who favor a second referendum are discussing how to secure their aim. Under current plans, they would propose an amendment to the strategy May’s due to set out in Parliament on Monday. Their first step would be to ensure Britain doesn’t leave the EU without a deal, according to a person familiar with the drafting process.

No-Confidence Vote Is Risky for Corbyn Too (3:55 p.m.)

Corbyn’s decision to propose a no-confidence vote in May’s government doesn’t just damage the prime minister -- it exposes his own Brexit policy to scrutiny he would probably rather avoid.

The Labour leader is resisting calls for a new referendum on Brexit, instead pushing for an election. He’s been able to hold off a clash with grass roots activists and elected politicians who are demanding a second referendum after a compromise was reached last year.

The fragility of his position was shown on Wednesday as he was unable to say what his policy on Brexit would be if the general election he’s calling for takes place. “We’re a democratic party and our party will decide,” Corbyn said. He has spent two-and-a-half years skirting around Brexit in his speeches, preferring to stick to his theme that the division in Britain is between the rich and poor, not remain and leave. After Wednesday’s debate and vote, he will find it harder to avoid the subject.

Brexit Committee Backs Indicative Votes (3:30 p.m.)

The question of how Parliament should express its preferences for different Brexit options has been a live one since last night. May’s preference is for what she’s already been forced to agree to: A motion will be laid on Monday, and later in the week members of Parliament will be able to put forward amendments and vote on that.

The objection to this method is it makes it difficult for politicians to express their second or third preferences. Significantly, the Brexit Committee has just published a brief report recommending holding a series of “indicative votes” on different options. This would mean a series of freestanding motions, where people could vote for all of those that they support.

Still, the committee acknowledged the risk that “the House could adopt several mutually contradictory positions or adopt no position at all.”

May Accuses Corbyn of Wrecking Labour Party (2:55 p.m.)

May delivered an excoriating critique of Corbyn’s leadership of the Labour Party, contrasting his actions with those of great Labour leaders of the past. Her words certainly don’t suggest she’s reaching out to him to find a way forward on Brexit.

EU Said to Consider Extension of Many Months: Brexit Update

To cries of “shameful” May recalled his past call for a dismantling of NATO before accusing him of inviting Irish Republican Army terrorists into Parliament and presiding over a culture of antisemitism in his party.

“If we want to see what he would do to this country, we could do no better than look at what he has done to his party,” May said. “The party which had fought so hard against discrimination could become the banner under which racists and bigots whose world view is dominated by a hatred of Jews could gather.”

EU Denies Concessions Are in the Works (2:35 p.m.)

Reports in German newspaper Handelsblatt (see 1:30 p.m.) that Germany and the Netherlands want to explore the possibility of giving the U.K. concessions on the Irish backstop are inaccurate, an EU official said.

The scale of Theresa May’s defeat means that many EU governments don’t believe that giving ground on the Irish border arrangement will be sufficient to sell the deal, two officials said.

Ireland Says Not Much Room for More Talks (2:08 p.m.)

Irish Prime Minister Leo Varadkar said he didn’t see “much room” for further negotiations around the Brexit divorce agreement after a German newspaper said a plan could be in the works to make the Irish backstop more palatable.

He also told the parliament in Dublin on Wednesday that he had raised the possibility of extending the Article 50 negotiating period with May before yesterday’s vote. He said she didn’t respond.

He may meet May in Davos next week.

May: Election Would Mean Delaying Brexit (1:40 p.m.)

May said an election would be the worst thing Britain could do, bringing uncertainty and pushing back the timetable for negotiating and delivering Brexit.

May told the Commons an election would mean "extending Article 50 and delaying Brexit for who knows how long?"

Is an EU Concession in the Works? (1:30 p.m.)

German newspaper Handelsblatt has a story saying that Germany, the Netherlands and some other EU countries want to explore the possibility of ceding some ground on the so-called Irish backstop.

As things stand, the U.K. stays in the customs union until a solution can be found to avoiding a hard border going up between the Republic of Ireland and Northern Ireland. The U.K. government is desperate to put some kind of time limit to this arrangement but Ireland, backed by the EU, has said the point of the backstop is to offer an open-ended guarantee.

Citing diplomats, Handelsblatt is saying that those countries want to consult with Ireland to see what can be done to accommodate the U.K., they however are clear that any form of softening has to come with the “clear permission” of Ireland. That is a big if.

Grieve Proposes Bills to Prep Second Referendum (1:10 p.m.)

Dominic Grieve, the backbench Conservative lawmaker who has coordinated opposition from all parties to May’s Brexit deal, proposed two new bills that would enable preparations for a referendum on the U.K.’s future relationship with the EU. The measures come before lawmakers on Jan. 21.

In an interview, he said he anticipated the government would not find time to debate his bills because the prime minister does not favor a second referendum and the government controls the time allotted to debates. “If Parliament seizes control, then I imagine time will be found for it,” he said. “It’s a marker, so once it’s down it can be used.”

May Explains How Brexit Delay Would Work (12:40 p.m.)

The premier left the door open to extending the Article 50 Brexit deadline. She said it’s the policy of the government to leave the EU on March 29, but then explained how an extension to the deadline would work.

It would need to be agreed to by the EU’s other 27 member states, she said, and they’d only allow that if Britain showed it had a clear plan for moving towards a deal.

Officials on both the U.K. and EU sides believe an extension is inevitable, and May’s team have privately said it could be necessary if her deal is finally and conclusively rejected.

Clarke Calls on May to Shift Stance (12:30 p.m.)

Father of the House and Tory lawmaker Ken Clarke told May there’s a majority in Parliament against a no-deal Brexit, in favor of extending Article 50 and in favor of some form of customs union with the EU.

“She must now modify her red lines which she created for herself at Lancaster House and find a cross-party majority which will be along the lines that I have indicated," he said.

In response, May said Brexit Article 50 can’t be unilaterally extended by the U.K., and that the EU would only accept doing so if there was a “clear” path toward a deal on Brexit.

Corbyn Pressures May on Customs Union (12:15 p.m.)

Opposition Labour Party Leader Jeremy Corbyn opened his latest Q&A with May with a question that shows where a compromise could be found between his party and her Conservatives -- should the premier seek it. He asked whether she’s ruled out any form of customs union with the EU as part of her outreach. Her reply sounded like she has.

“What the government wants to do is first of all to ensure that we deliver on the result of the referendum,” May said. “We want to do it in a way that ensures we respect the votes of those who voted to leave in that referendum. That means ending free movement, it means getting a fairer deal for farmers and fishermen, it means opening up new opportunities to trade with the rest of the world.”

It’s that last bit on trade that would seem to rule out a customs union -- though there is some wiggle room.

Labour MPs Call for Second Referendum (11:55 a.m.)

Labour MPs behind a letter this morning calling for a second referendum on Brexit insist that the 71 who signed represent more than 100 who back a change in party policy to campaign for a "People’s Vote".

There are 24, including frontbenchers Clive Lewis and Marsha De Cordova, who are already on record backing a second plebiscite but do not feature on the list of signatories, according to Gez Sagar, the veteran Labour press officer handling communications for the group. Others are not yet ready to go public.

“Removing the government and pushing for a general election may prove impossible, so we must join trade unions, our members and a majority of our constituents by then unequivocally backing the only option to help move our country forward,” the MPs said in a statement. “A public vote, with the option to stay and keep the deal that we have.”

The number of signatories shows a marked increase from the 36 who signed a similar letter last month, Sagar said.

Cameron Reappears (11:50 a.m.)

Meanwhile former Prime Minister David Cameron -- remember him? -- told the BBC on Wednesday he’s “sure” his successor Theresa May will win this evening’s vote. He said she has his support in trying to reach a partnership agreement with the EU.

EU Said to Consider Extension of Many Months: Brexit Update

But does the man who called the 2016 referendum on Brexit have any regrets?

“Obviously I regret that we lost that referendum, I deeply regret that, I was leading the campaign to stay in the European Union, and obviously I regret the difficulties and the problems we’ve been having trying to implement the result of that referendum,” Cameron said. “But I don’t think it’s going to be helped by me giving a running commentary.”

He went on: “I support the prime minister, I support her aim to have a partnership deal with Europe. That’s what needs to be put in place, that’s what Parliament needs to try and deliver now.”

Carney: BOE Talking to Government on No Deal (10:45 a.m.)

Mark Carney said the Bank of England is in discussions with the U.K. Treasury about the powers it needs to smooth any financial ructions if the country leaves the European Union without a deal -- though he also stressed that market movements suggest a no-deal Brexit unlikely.

EU Said to Consider Extension of Many Months: Brexit Update

Giving evidence to lawmakers on Wednesday, the central bank governor reiterated his confidence that the U.K.’s financial system is resilient, but said the powers the BOE would need should be put in place before Britain leaves the bloc on March 29.

Market moves since last night’s vote in Parliament, including a rebound in the pound, seem to reflect views that the prospect of a no-deal departure has diminished, he said.

EU Waiting for May Approach (10:40 a.m.)

So what does the EU do next? There’s a bit of diplomatic chatter around Brussels this morning but mainly, as they’ve said in public, European officials are waiting to hear from May first.

The EU does have some ammunition left to try to help May sell the deal -- and that could include beefing up the section of the agreement dealing with future relations, according to diplomats. That’s the non-binding part of the package that was kept intentionally vague to allow all sides of the Brexit debate in the U.K. to back it. It had the opposite effect: it didn’t please anyone.

Within the EU there is resistance to making changes to this and, crucially, it may need the U.K. to delay its departure date beyond March 29 to give negotiators more time. Most EU officials think a postponement is inevitable anyway.

The most likely option would be for the U.K. to postpone until July. Longer than that and there would be legal difficulties -- and opposition from some countries -- because the European Parliament will reconvene after elections. But some officials think they can get around that and expect a delay to Brexit day of many more months.

Leadsom Declines to Express Confidence in Speaker (9:55 a.m.)

U.K. Cabinet minister Andrea Leadsom, who is also leader of the House of Commons, made clear the government is still fuming over the role of Speaker John Bercow in the parliamentary debates on May’s Brexit deal.

In an interview with Bloomberg TV, she declined repeatedly to express support for Bercow, saying only that she has “confidence in the importance of the role of the Speaker” in Parliament “as the impartial arbiter of proceedings.”

The row erupted when Conservative politicians accused Bercow of changing parliamentary rules to allow a vote that ultimately let opponents of a so-called no-deal Brexit take over the timetable of events in the case of May’s deal being voted down -- which was what happened (emphatically) Tuesday night.

“It’s very important that the Speaker demonstrates that the rules are fairly applied and adhered to,” Leadsom said, adding that Bercow’s actions last week -- in allowing what many MPs regarded was an unamendable motion to be amended -- “put that in doubt.”

Labour Slams Lack of May-Corbyn Contact (9:30 a.m.)

After May’s pledge to seek consensus from across the aisle to find a way through the Brexit impasse, Labour complained she has not yet reached out to the party’s leadership.

“We’ve not had any approach from the prime minister to Jeremy Corbyn,” John McDonnell, Labour’s economy spokesman, told BBC Radio. He also accused May of setting too many conditions for any talks. “She seems to be negating the discussions before they’ve even started,” he said.

EU Said to Consider Extension of Many Months: Brexit Update

In response, Andrea Leadsom, leader of the House of Commons, made clear that May’s preference is to talk to senior rank-and-file Labour MPs rather than the party’s leader.

“What Jeremy Corbyn wants to do is disrupt government and disrupt the nation at a crucial time by seeking a general election,” Leadsom told the BBC. “The prime minister will speak with senior parliamentarians across the House and seek to find a way that meets with a majority.”

Coming Up:

  • Confidence vote in Parliament at 7 p.m.


©2019 Bloomberg L.P.