Theresa May, U.K. prime minister, right, listens as U.S. President Donald Trump speaks as they are reflected in a mirror during a joint news conference in the East Room of the White House in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

No Deal Without Backstop, May Tells Parliament: Brexit Update

(Bloomberg) -- Follow @Brexitsign up to our Brexit Bulletin, and tell us your Brexit story

Theresa May is making a last-ditch attempt to win lawmakers over to her Brexit deal, as the European Union’s own efforts to help her fell short just a day before the U.K. Parliament vote.

Key Developments

  • May said to be considering backing amendment that would put time limit on backstop, which the EU has refused
  • Pro-EU lawmakers are maneuvering to give Parliament more influence over Brexit process
  • May says she’s concerned about Brexit being thwarted
  • The pound edged higher after May’s speech before paring gains

May Says EU Wouldn’t Agree to Backstop End Date (5:05 p.m.)

Talking about the idea of putting time limits on the Irish backstop, May said: “The simple truth is this: The EU was not prepared to agree to this.” Does that amount to a signal that the government isn’t going to back Andrew Murrison’s (see 2:56 p.m.) amendment? Possibly. But some in Parliament argue that the amendment passing would enable May to go back and demand more.

DUP Voices Opposition (5 p.m.)

Ten votes the prime minister looks certain to lose tomorrow are those of her supposed allies in Northern Ireland’s Democratic Unionist Party. “Will she admit that nothing has fundamentally changed?” said Nigel Dodds, the DUP’s leader in Westminster. “There need to have been legally binding changes to the Withdrawal Agreement” in order for it to pass the House of Commons, he said.

Corbyn Unimpressed (4:50 p.m.)

Unsurprisingly, the exchange of letters May secured with the EU has done nothing to persuade the Labour Party leadership.

“The prime minister has completely and utterly failed” to get the legal assurances she promised the House of Commons when she pulled the vote in December, opposition Labour leader Jeremy Corbyn told lawmakers. "Absolutely nothing has changed.”

You’re Stuck With the Backstop, May Tells MPs (4.35 p.m.)

May has gone to Parliament to explain the EU’s latest assurances and beg for support. Warning members of parliament that history would judge them harshly if they blocked Brexit or pushed for a No Deal departure. And she told them that there was no alternative to the “Irish backstop” clause that so many of her Conservative colleagues hate.

“Whatever version of the future relationship you might want to see, from Norway to Canada to any number of variations, all of them require a Withdrawal Agreement and any Withdrawal Agreement will contain the backstop,” she said. “And that is not going to change however the House votes tomorrow.”

She closed by warning that a No Deal Brexit could lead to the break-up of the U.K.

"No, it’s not perfect and yes, it’s a compromise,” May said. “But when the history books are written, people will look at the decision of this house tomorrow and ask did we deliver on the country’s vote to leave the European Union, did we safeguard our security, our economy and our union, or did we let the British people down.”

Boles Sets Out Plan for Commons to Take Charge (4 p.m.)

Tory Nick Boles has published an outline of his proposed new law (see 7:15 a.m.). His plan would give May’s government “a few weeks” in which to win the support of Parliament and the EU for whatever is its Plan B.

If that fails, under Boles’s law, the liaison committee of senior MPs would have “a few weeks” to find an alternative plan that a majority in the Commons could support. If the Liaison Committee’s plan stumbles, Boles’s law would force May to request an extension of the Article 50 Brexit deadline.

Boles said his draft law will be published in full on Tuesday and has the support of “a range” of politicians from different parties.

Prominent Euroskeptic Field Backs May’s Deal (3:30 p.m.)

Euroskeptic veteran Frank Field, who currently sits in Parliament as an independent after a rift with the opposition Labour Party, said he will back May’s deal because there’s a risk of staying in the EU if it doesn’t pass.

“I now fear there will be no Brexit unless we go with this deal,” Field said by phone. “And that would be treachery to the British voters.”

There have already been a series of “meaningful votes,” Field argued, including Parliament voting to hold the 2016 referendum and the triggering of Article 50.

He’s had meetings with other Euroskeptics from across the House of Commons, he said, and is “hoping some will move” and join him in backing May’s agreement.

May Said to Weigh Plan for Backstop End-Date (2:56 p.m.)

The government is considering backing an amendment to May’s Brexit deal motion that would put an end-date on the contentious Irish border backstop arrangement, according to people familiar with the matter.

Conservative politician Andrew Murrison’s amendment is designed to win over euroskeptics who are worried that the U.K. will be trapped in the EU’s customs rules indefinitely under the backstop plan for the Irish border. It says that the Withdrawal Agreement should be “amended to specify that the backstop solution shall expire on 31 December 2021.”

May’s office is weighing whether to support it.

There’s a big problem though -- the EU has repeatedly rejected calls for an end-date to backstop. For European leaders, such a cut-off point would defeat the point of the backstop as an insurance policy to avoid a hard border with Ireland.

According to one person familiar with the matter, the government is considering the amendment and hasn’t made a final decision yet.

May Hit by Another Resignation (1:50 p.m.)

Another member of May’s government resigned on Monday over her Brexit deal. Gareth Johnson, a government whip, said in a letter to the prime minister that the backstop “ensures we will be fettered in our ability to negotiate trade deals with other nations in the future.”

Attorney General: May’s Deal Only Way Forward (1:40 p.m.)

May’s deal represents “the only politically practicable and available” way to make sure Brexit happens, Attorney General Geoffrey Cox wrote in a letter to May published by the government.

He advised that while the European Commission’s assurances on the Northern Ireland Protocol make it politically unlikely for the so-called customs backstop -- the insurance mechanism that kicks in if the Irish border issue cannot be resolved -- to remain indefinitely, it still could by law.

DUP: ‘Nothing Has Changed’ on Backstop (12:55 p.m.)

Nigel Dodds, deputy leader of the Democratic Unionist Party which props up May’s government, said in a statement the prime minister has failed to secure legally binding assurances from the EU on the so-called backstop -- the most contentious part of her deal -- and that “nothing has changed.”

“Northern Ireland would be subject to EU laws with no representation in Brussels,” he said. “We would rely on the Dublin government to speak up for us. Instead of meaningless letters, the prime minister should now ask for and deliver changes to the Withdrawal Agreement.”

The party also seized on a line from May’s speech in Stoke, that a no-deal Brexit could result in “changes to everyday life in Northern Ireland that would put the future of our Union at risk.”

“The prime minister must explain this comment,” Dodds said. “What exactly would the government be changing? If this is nothing more than scaremongering, then the prime minister should cease from such foolish talk.”

Raab Eyes Tory Leadership (12:15 p.m.)

Former Brexit Secretary Dominic Raab, in a veiled future leadership bid, set out his “convictions’’ for the U.K.’s future after Brexit. Raab, who quit the government over May’s plans, won’t be voting for her deal Tuesday because he said it would “choke off the opportunity of Brexit’’ by retaining ties to the EU.

Raab’s speech, taking in the economy, business, energy markets, striving low-paid workers and the vulnerable, frequently referenced “leadership’’ and a “brighter” future and he suggested reducing income tax for lower earners. He also floated the idea that shareholders should be able to vote on executive pay and claw back earnings from bad investment decisions.

“I am convinced our sights must rest on the long-term interests of the country,’’ Raab told the Centre for Policy Studies in London. “There is no cause for complacency, but every reason for confidence.’’ He denied Brexiters were “chasing unicorns’’ or looking for an unattainable Brexit, joking that London is home to 36 unicorns -- or privately-held tech startups.

Asked by reporters if he wanted to be Tory leader in the future, a smiling Raab declined to answer.

Labour Rejects EU Backstop Assurances (11:53 a.m.)

Keir Starmer, Labour’s Shadow Brexit Secretary, confirmed that the EU’s letter will do nothing to win over the U.K.’s official opposition to supporting May’s deal.

“The prime minister has once again failed to deliver,” Starmer said in an emailed statement. “This is a long way from the significant and legally effective commitment the prime minister promised last month. It is a reiteration of the EU’s existing position. Once again, nothing has changed.”

Nobody expected Labour to back May in Tuesday’s vote. But one option May’s ministers are pushing for is to invite Starmer and Labour leader Jeremy Corbyn to work with her after she loses: Ministers Tell May to Ask Corbyn for Help When Brexit Deal Dies

May Doesn’t Rule Out Delaying Brexit (11:45 a.m.)

May didn’t rule out an extension of the Brexit negotiating timetable, though she repeated her line that she wants the country to leave the bloc on March 29. “We’re leaving on March 29. I’ve been clear that I don’t think we should be extending article 50 and I don’t believe we should be having a second referendum,” she says.

The key point here is May was asked to commit that she would never agree to delaying Brexit -- and would only answer in the present tense that she doesn’t “think” it’s the right thing to do. May is careful with her words and it’s clear she wasn’t ruling anything out for the future.

The same applies to May’s point about a second referendum. Here’s what we wrote on May’s potential Plan Bs -- and the likelihood of a delay to Brexit -- back in December: U.K.’s May Is Hatching Secret Brexit Plan B to Avoid Armageddon

May: EU Assurances Fall Short of What MPs Want (11:40 a.m.)

The prime minister acknowledged that the EU’s letter (11:30 a.m.) falls short of the demands of many lawmakers, but said she’s not giving up on getting her deal through Parliament. She spoke to several members of Parliament over the weekend who have changed their minds -- and now back the deal -- because they “recognize the importance of the decision that is being taken,” she said.

Talks on a future trade deal with the EU can start on Wednesday if Parliament backs the deal, she said. “Fail, and we face the risk of leaving without a deal or the even bigger risk of not leaving at all.”

May: Bigger Risk of No Brexit Than No Deal (11:35 a.m.)

May has started making her speech at a factory in Stoke and she’s ramped up her warnings that Brexit could be reversed if Parliament blocks her deal. Many MPs are worried about the U.K. tumbling out of the EU with no deal, and the economic damage that would cause, she said.

“It’s now my judgment that a more likely outcome is a paralysis in Parliament that risks no Brexit," she said. The warning is intended to persuade Tory Brexiteers to back May’s deal in Tuesday’s vote, or risk losing their dream of leaving the EU.

EU ‘Not in Position’ to Change Deal (11:30 a.m.)

The letter to May from Jean-Claude Juncker and Donald Tusk, the presidents of the European Commission and Council, is aimed at reassuring the U.K. that the EU will do all it can to prevent the Irish border backstop taking effect -- or that if it does it will be only for a short period.

But the two men underline that nothing can be “inconsistent” with the deal that’s been agreed. Most of the reassurances aren’t new and only reiterate what is already set out in the deal, or in the statement from EU leaders at their summit in December. The letter says:

  • Commission to “give priority” to replacing backstop with alternative arrangements, including possible use of technology to avoid hard Irish border. This is further than the EU has gone before in saying the backstop isn’t necessary the basis of the future relationship
  • If transition period is extended beyond 2020, the EU would “redouble its efforts” to conclude trade deal “very rapidly”
  • The U.K. can hold the EU leaders to their commitment to find a new arrangement to replace backstop because this pledge has a “legal value”
  • If backstop became operational it would be “as short as possible”
  • The EU doesn’t want the backstop because it would be a “sub-optimal trading arrangement for both sides”
  • Full trade negotiations will start as soon as possible after Brexit and any deal can be applied provisionally while waiting for ratification. This means it could enter into force quickly and not be held up by other countries, which has been the case in other EU trade deals

U.K. Publishes EU Letter on Brexit, Backstop (11:15 a.m.)

In his response to May’s request for assurances on the so-called Irish backstop, EU President Jean-Claude Juncker said the provision to prevent a hard border in Ireland would be “temporary” if triggered, and said the bloc would consider the use of technology as an alternative arrangement. Significantly, he made no mention of a time limit on the backstop -- something that will not go down well with lawmakers in London.

Government Says Boles Amendment ‘Concerning’ (10:50 a.m.)

“Any attempt to prevent the government from meeting all the legal conditions for an orderly exit at this historic moment are extremely concerning,” May’s spokesman, James Slack, told reporters. He was referring to Tory former minister Nick Boles’s announcement (7:15 a.m.) he would submit a draft law aiming to hand the Brexit process to the most experienced members of Parliament if May’s deal is killed.

Slack also said the government will “shortly” publish the EU’s letter containing assurances on the so-called Irish backstop provision, which is the key obstacle to getting through the deal through Parliament. May spoke to German Chancellor Angela Merkel on Sunday about Brexit, and both agreed to remain in contact, Slack said.

McDonnell: Labour’s Focus Is Voting Against Deal (9:25 a.m.)

Labour’s Shadow Chancellor John McDonnell told BBC Radio earlier the party’s priority is to vote against May’s Brexit deal, and doesn’t expect May’s statement to Parliament later Monday to overturn opposition to the agreement.

“I doubt it will be anything more than what we heard before Christmas,” McDonnell said. “It would have gone down a month ago. She’s delayed it to get more support -- that doesn’t seem to have worked.”

McDonnell was asked if Labour would back party lawmaker Hilary Benn’s so-called wrecking amendment, which rejects both May’s deal and a no-deal Brexit. McDonnell described it as “perfectly sound,” though his and other colleagues’ preference was for a straight vote on May’s deal to “avoid getting tangled up in some of the weeds of amendments.”

He also said Labour’s decision to a table a motion of no confidence in the government was “a matter of when, not if.” The party would “watch the balance of forces in Parliament,” he said. “It’s going to be quite tumultuous and anything could happen.”

Grieve: Public Should Have Say on May’s Deal (9 a.m.)

Pro-European Conservative lawmaker Dominic Grieve confirmed he was among a cross-party group of members of Parliament planning to publish draft legislation proposing a second referendum on Brexit, which would include the option to stay in the bloc.

Given the opposition to May’s deal from members of Parliament as well as the public, lawmakers risk being blamed for an “unsatisfactory outcome” when the implications of leave the EU under May’s deal become clear, Grieve told BBC Radio.

“If we’re going to leave on those terms, we ought to go back to the electorate and ask if that’s what they want to do -- and offer them the alternative of remaining if they’ve changed their mind,” he said. “That seems to be perfectly democratic.”

Grieve also said a no-deal Brexit would cause “immense” economic damage and lead to the break up of the U.K.

Fox: ‘Unlikely’ Government Will Win Deal Vote (8:20 a.m.)

Speaking to the BBC, International Trade Secretary Liam Fox conceded that it was “unlikely” that May’s Brexit deal would get through Parliament in its current form. Still, he expects the prime minister to push on with finding a solution even in the event of a heavy defeat, though he declined to comment on what her Plan B might be.

Fox said lawmakers “have a duty to make sure we leave the EU and do it in a way that minimizes disruption,” pointing out that other countries including Belgium, the Netherlands and Ireland have much to lose from a no-deal Brexit -- not just the U.K.

“The public gave a clear instruction in the 2016 referendum,” he said. “We have to honor that contract and leave the European Union as instructed,” he said, adding that May’s Brexit deal is still the best way to do that.

May Will Set Out EU’s Assurances (8 a.m.)

May will explain to Parliament on Monday the reassurances that the EU is offering to help persuade MPs to back the deal, according to Trade Secretary Liam Fox.

The EU was expected to send a letter that makes clear that the much-loathed Irish backstop would only be temporary if it did come into effect. The letter will insist that the deal cannot be re-opened, according to Irish broadcaster RTE.

Rebels Draft Bill to Take Control (7:15 a.m.)

Members of Parliament who are opposing a no-deal Brexit will publish a draft law later on Monday aimed at handing control over the process to senior figures in Parliament, if May’s deal is killed.

Tory former minister Nick Boles announced the move in an interview on BBC radio’s Today program.

Under the plan, the Brexit process would be passed to the most experienced members of Parliament -- on the Commons Liaison Committee, Boles said. The best option would be if May comes forward with a sensible compromise, such as one modeled on Norway’s relationship with the EU, he added.

Earlier:

Coming Up:

  • May to make statement to House of Commons at about 4 p.m.

©2019 Bloomberg L.P.