May Stares Into Brexit Abyss as Parliament Takes Control

Tim Ross and Robert Hutton
May Stares Into Brexit Abyss as Parliament Takes Control

(Bloomberg) -- Theresa May is openly contemplating a Brexit “Plan B” amid growing signs that the British Parliament will reject the deal she’s reached with the European Union and try to take charge of what happens next.

On Wednesday, the prime minister suffered her second defeat in two days in the House of Commons, losing control of the timetable for setting out the next steps if -- as expected -- Parliament votes down her Brexit deal on Jan. 15.

In the aftermath of Wednesday’s defeat, May’s office publicly discussed for the first time what she would do if she loses that critically important vote next Tuesday. “Our intention has always been to respond quickly and provide certainty on the way forward in the event we lose,” her spokesman, James Slack, told reporters in London. “That is what we will do.”

Slack’s remark is a significant development and a clear sign that May’s team knows she’s losing ground in her battle with Parliament over who controls the direction of Brexit. It followed a defeat on Tuesday when the Commons voted to undermine her preparations for a no-deal exit from the bloc.

It all points to a scenario in which the prime minister, who leads a weak minority government, can’t dictate what happens next, while an emboldened Parliament increasingly asserts its will.

Some in May’s Cabinet welcome that. Business Secretary Greg Clark became the latest senior government figure to signal that a no-deal Brexit was unacceptable. Speaking to the BBC on Thursday, he said the world’s investors were watching the U.K. with “mounting alarm,” and urged Parliament to be an “active participant” in finding a Brexit compromise.

In recent days, May has been trying to garner support for her deal. She this week met with a group of opposition Labour Party lawmakers in an attempt to win their support on Brexit, according to an official familiar with the matter. That’s in addition to larger group of cross-party lawmakers she met with to discuss their concerns about a no-deal Brexit, as well as smaller groups of Conservatives, the official said.

Opposition Math

However, the number of Labour members willing to risk their party’s fury in order to support May’s deal as it stands isn’t close to the number of Conservatives publicly committed to voting against it. Only a significant shift by the prime minister, for instance accepting a customs union with the EU, would have any chance of doing that.

That would outrage Brexit-supporting Conservatives, but there are signs that the rest of the party is losing patience with them. Speaking in Parliament on Wednesday evening, Tory Paul Masterton said that, having accepted that his side lost in the Brexit referendum, he had been willing to compromise.

“The deal before us is as far as I am prepared to go,” he said. “If some of my colleagues want to blow this up in pursuit of an ideologically purist fantasy, fine. Go ahead. But I am done. Would it not be something if, when the history books are written, it emerged that it was owing to the arrogance and belligerence of the hardline Brexiteers in refusing to compromise that, rather than ending up with this imperfect Brexit, they ended up with no Brexit at all?”

Losing Control

The Parliamentary defeats of recent days -- and the willingness of Cabinet ministers to publicly discuss their preferences -- show that the prime minister is losing control of the process.

The Labour Party is seeking to leverage her weakness, with its leader, Jeremy Corbyn, set to deliver a major speech on Brexit on Thursday in which he’ll call for a general election if May loses next week’s vote.

“If the government cannot pass its most important legislation, then there must be a general election at the earliest opportunity,” Corbyn will say, according to extracts of his speech emailed by his party. “A government that cannot get its business through the House of Commons is no government at all.”

With fewer than 80 days until the U.K. is due to leave the EU, time is running out to secure an agreement and avoid what businesses and pro-European politicians fear will be a costly no-deal exit.

If the U.K. tumbles out of the bloc on March 29 without any new trading partnership in place, official analysis suggests the impact could trigger a recession, with the pound falling by as much as 25 percent and house prices by as much 30 percent.

Officially, May has not given up hope of winning the backing of the Commons for the divorce agreement she negotiated over 18 months of talks with the EU. But she was forced to cancel a plan to put the deal to a vote in December because she said she was sure it would be defeated. In the month since, little seems to have changed to suggest that she’ll win.

Read more detail on all Wednesday’s key developments, as they happened

(Updates with Clark comments from sixth paragraph.)

--With assistance from Alex Morales.

To contact the reporters on this story: Tim Ross in London at tross54@bloomberg.net;Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Alex Morales, Robert Jameson, Stuart Biggs

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