May's Office Says Talks With Labour ‘Productive’: Brexit Update

(Bloomberg) -- Theresa May’s government said it held “detailed and productive” Brexit talks with the opposition Labour Party, and both sides said they are planning to meet again. A House of Lords debate on a controversial bill to block a no-deal Brexit that passed the Commons by a single vote Wednesday looks set to run long into the night.

Key Developments:

• Labour says it had “detailed, technical” discussions with government over four-and-half hours; statement leaves out word “productive”
• Attorney General Geoffrey Cox, a Brexiteer, said he’d prefer a customs union to not leaving the European Union, in a possible sign a compromise with Labour is possible
• Germany’s Merkel vowed to try to avoid a no-deal Brexit during a visit to Ireland
• House of Lords still debating motion on pushing through Cooper bill blocking a no-deal Brexit in a single day

Lords Truncate Brexit Marathon (7 p.m.)

The House of Lords has agreed to postpone a large part of its Brexit debate until Monday, after it took seven hours of discussions today just to pass the business motion and give the bill an initial reading.

The Second Reading, which is a general debate on the bill, will start shortly and could last several hours as there are currently 44 speakers listed. After that, the Committee and Report stages will be postponed until Monday, said government chief whip Lord Taylor of Holbeach. He expects the Lords will be able to return the bill to the Commons with any amendments at about 8 p.m. on Monday.

Government Fills Six Vacancies (6:25 p.m.)

The government has finally replaced six ministers who resigned to vote against the government over Brexit, including Sarah Newton, who left her role in the Department for Work and Pensions more than three weeks ago.

James Cleverly will replace Chris Heaton Harris, who resigned this week from his role at the Department for Exiting the European Union. The other new ministers are Justin Tomlinson, Seema Kennedy, Andrew Stephenson, Will Quince and Kevin Foster.

Merkel: Brexit in ‘Decisive’ Phase (5:50 p.m.)

Following a meeting with Irish Prime Minister Leo Varadkar in Dublin, German Chancellor Angela Merkel told reporters both countries will “stand together” on Brexit, and said the peace process in Northern Ireland must be preserved. She also said Brexit is in a “decisive” phase and that she hopes for the U.K. makes an offer at next week’s EU summit, adding that an orderly Brexit is crucial.

Varadkar told reporters a no-deal Brexit would put Ireland in a “difficult position” and said there was little time left to reach an agreement, though he also called for patience and understanding of the U.K. position.

Government: Labour Talks ‘Detailed, Productive’ (5:35 p.m.)

Negotiating teams from Theresa May’s government and the opposition Labour Party held four-and-half hours of “detailed and productive technical talks,” May’s office said in an emailed statement.

The two sides plan to meet together for further talks “to find a way forward to deliver on the referendum, mindful of the need to make progress ahead of the forthcoming European Council,” a spokesman for May said.

Labour said in a statement they had “detailed, technical discussions,” but left out the word “productive.”

The negotiators ate a lunch of sandwiches and fruit. Tea, coffee and biscuits were served throughout the day.

Letwin, Davis Keep Eye on Lords Filibustering (5:10 p.m.)

Oliver Letwin, architect of the bill to block a no-deal Brexit passed by the House of Commons last night, is sitting on the steps of the throne in the House of Lords as pro-Brexit peers stage a filibuster to try to stop the legislation passing through the unelected upper chamber in one day. Former Brexit Secretary David Davis is also in the chamber keeping an eye on proceedings.

Lawmakers are currently debating amendments to the timetable for debate, and after five and a half hours they still haven’t got through them all. When the debate starts on the bill itself there will be further amendments, meaning it’s likely to run long into the night.

House of Commons Suspended After Water Leak (2:50 p.m.)

The House of Commons was suspended on Thursday afternoon as water started pouring into the chamber. Lawmakers were debating tax legislation at the time, in a rare diversion from discussing Brexit.

Parliamentary staff are seeking the source of the leak, which saw water cascading into the press gallery in the Commons chamber, which is above and behind the Speakers chair. The Palace of Westminster, which dates from the mid-19th Century, is undergoing a program of repairs, and MPs are expected to move out for a time in the next decade to allow the completion of a 3.5 billion pound refurbishment.

Labour MPs Urge Corbyn Not to Back Referendum (2:35 p.m.)

A group of 25 Labour MPs have written to Jeremy Corbyn urging him not to request a referendum in his talks with Theresa May and to reach a deal "that can bring remain and leave voters together."

The lawmakers, about 10 percent of the party’s MPs, say they hope he can secure "safeguarding of workers rights, health and safety, and environmental standards" in his talks with the prime minister. They warn that a repeat plebiscite "would be exploited by the far right, damage the trust of many core Labour voters and reduce our chances of winning a general election."

Early Lords Votes Indicate Support for Cooper Bill (1:20 p.m.)

It’s still only the preamble in the House of Lords -- essentially debates and votes on the motion to debate the Cooper bill, not yet on the bill itself -- but the indication from two early votes is there are considerably more supporters than opponents currently in the chamber.

Votes on Brexit Options Could Be After Summit (12:30 p.m.)

May’s spokesman, James Slack, told reporters that European leaders would be “seeking clarity’’ at their summit next Wednesday on the U.K.’s position following negotiations with the Labour Party. He left open the possibility that parliamentary votes on Brexit proposals might not take place before May travels to Brussels.

Asked about the negotiations today between David Lidington, May’s de facto deputy, and Labour’s Brexit spokesman Keir Starmer, Slack said he didn’t want to “preempt’’ any compromises the two sides might reach. May and Corbyn have not yet set a time for their next meeting, Slack added.

He was then asked if May agrees with Chancellor of the Exchequer Philip Hammond, who said late Wednesday a second Brexit referendum remains a “perfectly credible proposition.’’ Slack replied: “Parliament has looked at this on a number of occasions and rejected it.’’

Lords Urged to Push Through Cooper Bill (11:55 a.m.)

In the House of Lords, Labour peer Dianne Hayter is seeking to introduce the bill that squeaked through the House of Commons last night. She urged peers to ignore normal procedures, and agree to push it through in a day.

“The bill passed by the elected House can only have effect if we deal with it today,” Hayter said, so it can receive royal assent in time for the EU council to consider the U.K.’s application for an extension at its April 10 summit. That’s just two days before Britain is due to leave the bloc, with or without a deal.

Hayter emphasized the consequences for the U.K. of a no-deal exit, including “no transition period, the immediate introduction of tariffs, complete uncertainty for British citizens living in the EU27, no European arrest warrants, security concerns, dire consequences for industry, to say nothing for the implications for Gibraltar and the island of Ireland.”

EU Officials Say No-Deal Increasingly Likely (11:50 a.m.)

In Brussels, the European Commission is spending a second day presenting its plans for a no-deal Brexit, with officials lining up to say that the possibility of the U.K. crashing out without agreement on April 12 is increasingly likely.

Commission Vice-President Jyrki Katainen, a former Finnish prime minister, has outlined preparations to protect EU citizens’ access to medicine and medical devices -- but the EU’s plans are all about self-protection, not making a no-deal easier for the U.K. He said that’s up to the British government. “We wish all the best to the U.K.,” he said.

Katainen said it’s “logical” that Britain is “rushing to a hard Brexit” -- by which he means no-deal -- because, he said, the EU doesn’t know what the alternative is if the U.K. rejects May’s deal. “We only know what Britain doesn’t want,” he said.

Leadsom: Parliament Schedule Must Be Flexible (11:15 a.m.)

Leader of the House of Commons Andrea Leadsom has announced next week’s agenda, predominantly secondary legislation related to Brexit. There was no mention of further votes on Brexit options, inevitably perhaps given that talks between the government and the opposition Labour Party are still underway.

Leadsom did say Parliament must remain “flexible” in coming days, and MPs should be prepared to sit on April 15 and 16. The Easter recess had been scheduled to run from April 4-23.

Barclay Leaves Open Potential Compromise (10:30 a.m.)

After Attorney General Geoffrey Cox said he’d prefer a customs union with the EU to not leaving the bloc at all, Brexit Secretary Steve Barclay dropped a hint the government’s red lines may be softening.

He was asked in the House of Commons by pro-Brexit Tory Philip Hollobone to confirm that the party’s manifesto committed to take the U.K. out of both the EU’s customs union and single market, and that the prime minister wouldn’t renege on that promise at next week’s EU summit.

Barclay confirmed the manifesto contained the commitment, but pointedly said it also promised a “deep and special partnership” with the EU, a necessary “balance” given that 48 percent of voters didn’t opt to leave the bloc -- and which May’s Brexit deal reflects.

“It is that compromise that hasn’t been pure enough for some members of my own benches, the government benches, to support it,” he said. He didn’t refer to May’s plans for next week.

Barclay: Lords Will Examine ‘Flaws’ in Cooper Bill (10 a.m.)

In the House of Commons, Brexit Secretary Steve Barclay was asked whether the government would comply with the bill passed by the House of Commons last night which would compel the prime minister to seek an extension to Article 50. He replied that ministers would always obey the law.

But he added that Parliament should not necessarily expect the bill to be passed in the House of Lords, adding that he expects peers to closely examine the “flaws” in the legislation.

In the early exchanges, Barclay also acknowledged that given the votes in Parliament, the government could not guarantee the U.K. wouldn’t take part in elections to the European Parliament. The EU will decide on whether Britain is granted a Brexit extension, he said, and may attach conditions to that. Taking part in the elections would damage public trust in politics, he said.

S&P: Brexit Vote Hurt U.K. Economy (Earlier)

The U.K. economy would have been about 3 percent larger at the end of 2018 had it not voted to leave the EU, according to a report from S&P Global Ratings. That’s an average of 6.6 billion ($8.7 billion) of forgone economic activity in each of the 10 quarters since the 2016 referendum.

S&P said the main pressure on growth came from the weaker pound, which stoked inflation and damped private consumption while at the same time failing to bolster exports.

Hancock: Vote Makes No-Deal ‘Very Unlikely’ (Earlier)

Health Secretary Matt Hancock said a no-deal split from the European Union is “very unlikely” after the House of Commons voted in favor of Labour MP Yvette Cooper’s bill on Wednesday night.

Speaking on BBC Radio 4 on Thursday, Hancock also defended Theresa May’s talks with Labour leader Jeremy Corbyn. “Delivering the prime minister’s deal on Conservative votes hasn’t succeeded,” he said. “The only option left open to her was to seek Labour votes.”

Hancock said he remained opposed to both a customs union with the EU and a second referendum, though he added that all politicians are having to compromise on Brexit.

Earlier:

U.K. Parliament Acts to Block Potentially Chaotic No-Deal Brexit
No Deal Brexit? Which European Countries Have the Most to Lose
Brexit Bulletin: Back from the Brink?
Even Jeremy Corbyn Can’t Kill the No-Deal Beast: Therese Raphael

--With assistance from Lucy Meakin, Peter Flanagan and Patrick Donahue.

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net;Ian Wishart in Brussels at iwishart@bloomberg.net;Alex Morales in London at amorales2@bloomberg.net

To contact the editors responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net, Tim Ross

©2019 Bloomberg L.P.