Theresa May, U.K. prime minister, carries a document folder as she leaves number 10 Downing Street in London, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

May Won't Rule Out Brexit Delay as U.K. Parliament Takes Control

(Bloomberg) -- U.K. Prime Minister Theresa May is refusing to rule out delaying Britain’s departure from the European Union as Parliament moves to take over the process to avoid an economically damaging no-deal Brexit.

May is under pressure from a cross-party group of politicians who are drafting a new law that could force her to ask the EU to extend the Brexit deadline.

May Won't Rule Out Brexit Delay as U.K. Parliament Takes Control

If no deal is struck by Feb. 26, Parliament will be able to direct the next steps, including forcing May to call for an extension to the negotiations beyond Britain’s planned exit date of March 29, under the plan.

On Monday, the prime minister hinted she’s already contemplating an extension. During a question session in the House of Commons, May was repeatedly asked if she would rule out a delay to the U.K.’s withdrawal -- but stopped short of doing so.

Her comments represent another indication that the U.K.’s troubled divorce from the EU will need more time. With just over nine weeks until Britain is due to end its EU membership, there is still no sign of a plan that can pass through Parliament.

Last week, the draft withdrawal agreement that May has spent the past two years negotiating with the EU was rejected in the House of Commons in the biggest defeat for a British government in recent history.

If no agreement can be ratified before March 29, the U.K. will lurch out of the EU with no deal, risking dire economic consequences, including a recession, and potentially a 25 percent fall in the value of the pound, according to British authorities.

May has been holding talks with opposition members of Parliament in an attempt to formulate a cross-party plan for the way forward. But she said her efforts were not working because her main rival, Labour party leader Jeremy Corbyn, was refusing to take part.

May Won't Rule Out Brexit Delay as U.K. Parliament Takes Control

May said she would shift her focus to finding a compromise with the EU on the backup plan for avoiding a hard border with Ireland -- the so-called Irish backstop. This is the most contentious part of the exit deal and so far the EU has refused to reopen talks on the issue.

May’s hope is that a better deal on the Irish border will win over members of her Conservative Party and the Democratic Unionist Party who rejected her deal last week.

In other concessions to her critics, May said her government will waive the 65 pound ($84) fee for European nationals wanting to stay in the U.K., and pledged to talk to labor unions and opposition parties about guaranteeing workers’ rights and environmental protections as she seeks to build consensus for her deal.

She pushed back against repeated requests for a second referendum on Brexit, warning that it would “damage social cohesion and faith in our democracy” if Parliament didn’t carry out the wishes of the 17.4 million people who voted to leave the EU in 2016.

In other developments on Monday:

  • May ruled out reports in newspapers that she is willing to reopen the Good Friday agreement that brought peace to Northern Ireland in her quest for a deal.
  • The International Monetary Fund renewed its warning about the economic risks of a no-deal Brexit to the U.K., holding its 2019 growth forecast at 1.5 percent and warning “substantial uncertainty” surrounds the estimate.
  • Irish Foreign Minister Simon Coveney rejected a proposal by Poland to limit the backstop to five years as a way of breaking the impasse

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