Theresa May Must Win Two Key Brexit Battles to Get a Deal

(Bloomberg) -- U.K. Prime Minister Theresa May is still aiming to strike a Brexit deal within days so she can get it formally signed off at a summit of European Union leaders by the end of November.

First she has to win two key battles inside her own divided government: over whether to release the government’s legal advice, and over her plan to sign the U.K. up to the EU’s social, environmental and competition laws.

Key Insights

  • May’s most euroskeptic ministers are demanding to see the government’s full legal advice supporting a plan for the Irish border backstop. These ministers fear May’s blueprint risks binding the U.K. forever into the EU’s customs rules and tariff regime and want to see the legal evidence behind it.
  • Attorney General Geoffrey Cox has not yet written the legal advice and May told ministers she would only let them see a summary of it, once he has, according to a person familiar with the matter. That’s not good enough for the likes of Environment Secretary Michael Gove.
  • Now the opposition Labour Party is demanding that the whole document -- when it’s ready -- must be published so Parliament can see the advice before politicians vote on whether to accept or reject May’s Brexit deal. When that vote comes, Labour support could make the difference between May winning and losing.
  • May is also facing a backlash after she told her Cabinet that the U.K. will sign up to the EU’s so called “level playing field” rules as part of the Irish border backstop. This means Britain will promise not to burn swathes of EU regulations on issues such as competition rules, state aid and environmental regulations.
  • That’s because EU member states are worried Britain will get an unfair advantage in trade terms, if it’s still inside the bloc’s customs territory but doesn’t need to apply the same strict rules as the other 27 member countries.
  • For pro-Brexit campaigners in May’s party, escaping these same rules is a crucial prize of leaving the EU. They want Britain to take back control of its own laws in all these areas -- and are less likely to back a deal that fails to deliver this freedom.

Know more

  • May could visit the European Commission within days to shake hands with President Jean-Claude Juncker on the terms of the U.K.’s divorce.
  • Ministers have started reading the draft text of the exit deal but it doesn’t contain the plan for the Irish border yet.

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