Theresa May, U.K. prime minister. (Photographer: Chris Ratcliffe/Bloomberg)

Pressure Builds on May to Find Compromise Plan: Brexit Update

(Bloomberg) --

The British Parliament votes later on the prospect of a no-deal Brexit and is expected to rule out the chaos scenario by a comfortable margin. But what’s next? There’s still no majority for any kind of Brexit. Chancellor of the Exchequer Philip Hammond hints it’s time for compromise.

Key Developments:

  • Parliament votes on no-deal Brexit from 7 p.m., amendments first
  • Speaker John Bercow selected two amendments -- Malthouse and Spelman -- but Caroline Spelman later said she won’t move hers
  • May said to call her Cabinet ministers to meet her in House of Commons before tonight’s vote
  • Hammond indicates he wants to seek cross-party consensus on Brexit; Environment Secretary Michael Gove hints Parliament might get a say on alternative Brexit options as soon as Thursday
  • Pound rises as traders predict Parliament will vote against no-deal and for extension

Varadkar: No Point in U.K. Seeking More Concessions (6 p.m.)

“There is no point now in the British government asking for changes or further concessions because they’ve demonstrated twice now that they’re unable to get an agreement over the line,” Irish Prime Minister Leo Varadkar told reporters in Washington on Wednesday.

In comments broadcast by Irish state broadcaster RTE, Varadkar also noted the “supreme irony” that the British government’s planning for a no-deal Brexit treats Northern Ireland differently from the rest of the U.K., and predicted it wouldn’t be workable in the long term.

Varadkar also reiterated the EU’s position that there is no standstill or transition period available to the U.K. without the full withdrawal agreement. That’s a reference to the so-called Malthouse amendment that will be voted on shortly in the House of Commons.

Barnier: Brexit Delay Not Straightforward (5:30 p.m.)

The European Union’s chief Brexit negotiator, Michel Barnier, said postponing Brexit, the subject of a potential vote in the British Parliament on Thursday, won’t be straightforward.

“It could be a tactical, a political prolongation,” Barnier told Euronews TV. “In that case, I know the answers and the reaction of the EU side, the EU leaders, the EU Parliament: ‘What for? Why do you need a prolongation? Is it for organizing a new referendum, new elections or not?”’

Barnier said that as far as he’s concerned, the Brexit negotiations are over and that the withdrawal deal is the only way to limit the consequences of the U.K.’s departure for both sides.

Spelman Says She’ll Pull Her Amendment (5:10 p.m.)

Conservative MP Caroline Spelman said she’ll pull her motion which would have rejected a no-deal Brexit in clearer terms than Theresa May’s own motion. The former Tory Party chairman said she was doing so because May’s motion was likely to garner more votes against a no-deal Brexit than her own.

Speaker of the House of Commons John Bercow then rebuked Spelman, saying she couldn’t withdraw her amendment because it hasn’t yet been moved -- but she could choose not to move it when it comes to the time to do so. But, he said, other signatories to the amendment would be able to persist with it should they want to.

May Calls Cabinet Meeting Before Vote (4:45 p.m.)

Theresa May has ordered her most senior ministers to meet her in her House of Commons office before the vote this evening, according to three people familiar with the matter. Two of the people said the meeting will be an informal one. It’s not clear yet what is on the agenda.

BBC: Spelman Withdraws No-Deal Amendment (4:40 p.m.)

Tory MP Caroline Spelman is no longer pushing her amendment to Wednesday’s no-deal motion, the BBC reported, without saying where they got the information. Spelman’s proposal was one of two amendments that had been selected by Speaker John Bercow.

Spelman’s amendment would have replaced May’s no-deal motion with a much plainer rejection of leaving the EU without a deal. The government was set to whip against it.

Pro-Brexit MPs Trying to Rule Out Referendum (4:35 p.m.)

In the House of Commons, Brexit-supporting MPs are already gathering signatures for an amendment to Thursday’s vote on delaying Brexit. It seeks to rule out a second referendum on the basis it would be “divisive and expensive.”

Mark Francois, one of the lawmakers collecting signatures, said the amendment already has support from over 50 MPs from the DUP, Conservatives and Labour’s Kate Hoey.

Gove Says Parliament May Debate Brexit Options (3:55 p.m.)

Gove indicated MPs may get a chance as soon as Thursday to debate alternative Brexit proposals. Pro-EU Cabinet ministers have been calling for so-called indicative votes since last year, and Hammond signaled earlier that he wants to start looking for a cross-party compromise on Thursday, too.

Gove was asked about indicative votes, and said “we may have an opportunity to do that tomorrow.”

Speaker Selects Spelman, Malthouse Amendments (3:20 p.m.)

Speaker John Bercow has, as expected, chosen two amendments to be voted on this evening. Caroline Spelman’s changes the motion that May has written so as to harden the rejection of a no-deal Brexit. The Malthouse Amendment, as it’s known, advocates a "managed no-deal" departure from the EU.

The government is instructing Tories to vote against Spelman and saying they can vote as they please on Malthouse. But only Spelman will get opposition support, so it is the one with the best chance of passing.

Labour to Support Spelman’s No-Deal Amendment (2:55 p.m.)

After Theresa May ordered her Tory MPs to vote against a rebel amendment which would reject Britain leaving the EU with no-deal, a Labour official said the opposition would instruct its 245 lawmakers to back it.

That means the amendment -- proposed by Tory MP Caroline Spelman (see 2:40 p.m.) -- has a much higher chance of passing, though Speaker John Bercow has yet to select which amendments he will allow vote on.

No. 10 Says No Plan for Indicative Votes (2:50 p.m.)

Briefing reporters in London, May’s spokesman said the no-deal votes on Wednesday -- and potentially Thursday’s vote on extending the deadline -- were the first steps toward reaching a consensus on the way forward.

But May is still opposed to staying in a customs union, the spokesman said. And there are no plans to hold a series of indicative votes to test support for different Brexit options in Parliament, such as EU single-market membership, or a second referendum.

Tories Ordered to Vote Against Spelman Plan (2:40 p.m.)

The next battle seems to be about the wording of the motion to reject a no-deal Brexit. May’s motion potentially leaves the option open to leaving the EU without an agreement -- just not on March 29.

But a rival amendment from Conservative MP Caroline Spelman is more emphatic, ruling out a no-deal Brexit without caveats. The Spelman plan is gaining support from pro-EU Tories, and May has now ordered all of her party’s politicians to vote against it.

If the opposition Labour Party back the Spelman amendment, it has a fighting chance of passing.

May Loses Voice and Pulls Out of Debate (2:20 p.m.)

Prime Minister Theresa May won’t open the debate on leaving the EU with no-deal because she’s losing her voice, her spokesman said.

May struggled through her statement to the Commons on Tuesday, and could hardly be heard at times during Prime Minister’s Questions on Wednesday. She had planned to open the debate on a no-deal Brexit, but has now decided against it.

The premier’s sore throat first became apparent on Monday night when she spoke at a press conference in Strasbourg alongside the EU’s Jean-Claude Juncker. Her voice has weakened progressively since, as her Brexit deal crumbled. The tabloid Sun newspaper led Wednesday’s front page Brexit article with the headline: “Croaky Horror Show.”

Hammond Urges ‘Consensus’ Approach to Brexit (1:25 p.m.)

At the end of his statement, Chancellor Philip Hammond dropped a heavy hint about his preferred route forward on Brexit. “Tomorrow, we will have the opportunity to start to map out a way forward towards building a consensus across this House for a deal we can collectively support,” he said.

That sounds like he wants to stop trying to get votes from Brexiteer Tories -- May’s strategy -- and start getting them from Labour. That would mean a softer Brexit, staying in the customs union and perhaps even the single market.

They’re comments that will upset many Tories who, though they refuse to support the government themselves, don’t like it when ministers talk about looking for support elsewhere.

Brexiteer Asks May to Vote for Plan EU Rejected (12:45 p.m)

Pro-Brexit Tory member of Parliament Peter Bone asked May to back the Malthouse amendment which is designed to endorse a so-called “managed no-deal.” The idea is supposed to unite different wings of the Conservative Party behind a plan of delaying Brexit until May 22 and using that time to negotiate a two-year standstill period, for which the U.K. would pay.

Earlier, pro-Brexit Cabinet ministers including Andrea Leadsom, Chris Grayling and Gavin Williamson urged May to allow a free-vote on the matter.

May suggested the idea is non-starter because the EU has already ruled it out. “The EU will not accept elements of what is in the Withdrawal Agreement without the Withdrawal Agreement,’’ because it contains protection for the Irish border and other guarantees, she said in Parliament.

How Long an Extension? (11:50 a.m.)

At a meeting in Brussels this morning, EU government envoys discussed possible extension scenarios, a person familiar with the matter said.

There was no conclusion --- it’s a political decision that will be taken by the leaders, and the length will depend on the reasons the U.K. cites for wanting a delay, the official said. Those could range from needing time to ratify the Withdrawal Agreement or prepare for no-deal, or elections or a second referendum.

Ambassadors were briefed that no further negotiations with the U.K. are under consideration at the moment.

May Said to Agree to Free Vote on Malthouse (11:15 a.m.)

Having said last night that there would be a free vote on whether to seek a no-deal Brexit, May found herself in fresh trouble this morning as her government considered how to direct Conservatives to vote on amendments to the motion.

After some reports that Tories would be told to vote against the so-called Malthouse B amendment (see 10:40 a.m.) -- which proposes what its supporters see as a managed no-deal departure -- an official said this too would be a free vote. That comes after pro-Brexit ministers including Transport Secretary Chris Grayling and Defence Secretary Gavin Williamson were said to have urged May not to whip Tories against the amendment.

Even if MPs do back it, the EU has already repeatedly rejected it, including on Tuesday. There’s also no word yet on whipping arrangements for other amendments, including the one which seeks to get a firmer commitment to ruling out no-deal.

Barnier: No-Deal Risk ‘Never Higher’ (10:55 a.m.)

More from the EU’s chief negotiator, who spoke at the European Parliament in Strasbourg this morning (see 10:15 a.m.)

“We are at a critical point,” Barnier said. “The risk of a no-deal has never been higher -- that is the risk even by accident of the U.K. exiting from the EU in a disorderly fashion. I urge you not to underestimate that risk or its consequences.”

Brexiteers Warn May on Whipping (10:40 a.m.)

Pro-Brexit Cabinet ministers including Transport Secretary Chris Grayling and Defence Secretary Gavin Williamson urged May not to whip against the Malthouse amendment (see 8:50 a.m.) for fear of splitting the Conservative Party, according to two people familiar with discussions in this morning’s Cabinet meeting.

Williamson was first to speak on the issue at Cabinet, according to one of the people. He told May it would be “daft” to whip against Malthouse as it would have “severe consequences” for the Conservative party and for morale among Tory MPs. “It’s going to cause us a lot of problems.” He also called for an extension to Article 50.

The Malthouse amendment calls for the government to negotiate an extension of Britain’s EU membership until May 22, and then a standstill period until the end of 2021 to negotiate a free-trade deal -- in exchange for payments to the EU. But the bloc has repeatedly ruled it out.

Barnier: Brexit-Deal Talks ‘Done and Dusted’ (10:15 a.m.)

Speaking in the European Parliament in Strasbourg, the EU’s chief negotiator Michel Barnier said the bloc can’t grant a request to delay Brexit until it knows what the U.K. wants it for.

Negotiations on the divorce deal are “done and dusted,” he said, adding that last night’s vote in the House of Commons “prolongs and makes worse” the uncertainty. “This treaty which we negotiated with the government of Theresa May for a year and a half is and will remain the only available treaty.”

Speaking after Barnier, Guy Verhofstadt, the European Parliament’s Brexit spokesman, called on the U.K. to make its mind up on Brexit and said he would oppose any request for delay that didn’t have a clear purpose.

Uncertainty Is ‘Devastating’ U.K.’s Economic Ties (9:50 a.m.)

Brexit-related uncertainty is “devastating” the U.K.’s economic relations with European partners and many buyers of British goods are actively looking for alternative sources of supply, according to a leading German business lobby.

German companies currently won’t sign sign long-term delivery contracts with British partners and are stocking up on goods wherever possible, Holger Bingmann, president of Germany’s BGA association of exporters and wholesalers, told Bloomberg.

Sterling Rallies Ahead of Vote (9:30 a.m.)

The pound strengthened the most among the Group-of-10 currencies before Wednesday’s vote in Parliament, when analysts expect lawmakers to reject leaving the European Union without a deal. The pound extended this year’s gains versus the dollar to more than 3 percent, the best performance among G-10 currencies.

Pressure Builds on May to Find Compromise Plan: Brexit Update

Conservatives Jostle Over Amendments (8:50 a.m.)

MPs are laying down amendments ahead of tonight’s vote, including one backed by Brexiteers including Steve Baker as well as more moderate Tories. It calls for the government to negotiate an extension of Britain’s EU membership until May 22, and then a standstill period until the end of 2021 to negotiate a free-trade deal -- in exchange for payments to the EU budget.

“We think this is a way through,” Baker said on BBC Radio 4. “We are in the business of finding a way to unite all wings of the party and the DUP.”

The problem is that the EU has repeatedly said a transition or standstill period is not on offer without a full withdrawal agreement. That means, according to Conservative MP Nick Boles, that many Tories won’t back it.

“It’s basically a no-deal exit,” he told the same program. “It’s important to stick to things that can be delivered, that are on offer, and not to try to come up with new schemes -- however attractive sounding -- that simply won’t fly.”

Earlier:

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