May Talks to Labour in Search of Compromise Deal: Brexit Update

(Bloomberg) -- Theresa May’s government holds intensive talks with Jeremy Corbyn’s opposition Labour Party in search of a compromise position on the U.K.’s future ties to the EU. The House of Lords debates a controversial bill to block a no-deal Brexit that passed the Commons by a single vote last night.

Key Developments:

  • Government in intensive talks with Labour to find Brexit compromise
  • MPs voted last night in favor of a bill to compel May to seek a Brexit extension; it moves to the House of Lords on Thursday
  • Attorney General Geoffrey Cox, a Brexiteer, said he’d prefer a customs union to not leaving the bloc, in a sign a compromise with Labour is possible
  • House of Commons leader Andrea Leadsom says Parliament will need flexible schedule in coming weeks

Votes on Brexit Options Could Be After Summit (12:30 p.m.)

May’s spokesman, James Slack, told reporters that European leaders would be “seeking clarity’’ at their summit next Wednesday on the U.K.’s position following negotiations with the Labour Party. He left open the possibility that parliamentary votes on Brexit proposals might not take place before May travels to Brussels.

Asked about the negotiations today between David Lidington, May’s de facto deputy, and Labour’s Brexit spokesman Keir Starmer, Slack said he didn’t want to “preempt’’ any compromises the two sides might reach. May and Corbyn have not yet set a time for their next meeting, Slack added.

He was then asked if May agrees with Chancellor of the Exchequer Philip Hammond, who said late Wednesday a second Brexit referendum remains a “perfectly credible proposition.’’ Slack replied: “Parliament has looked at this on a number of occasions and rejected it.’’

Lords Urged to Push Through Cooper Bill (11:55 a.m.)

In the House of Lords, Labour peer Dianne Hayter is seeking to introduce the bill that squeaked through the House of Commons last night. She urged peers to ignore normal procedures, and agree to push it through in a day.

“The bill passed by the elected House can only have effect if we deal with it today,” Hayter said, so it can receive royal assent in time for the EU council to consider the U.K.’s application for an extension at its April 10 summit. That’s just two days before Britain is due to leave the bloc, with or without a deal.

Hayter emphasized the consequences for the U.K. of a no-deal exit, including “no transition period, the immediate introduction of tariffs, complete uncertainty for British citizens living in the EU27, no European arrest warrants, security concerns, dire consequences for industry, to say nothing for the implications for Gibraltar and the island of Ireland.”

EU Officials Say No-Deal Increasingly Likely (11:50 a.m.)

In Brussels, the European Commission is spending a second day presenting its plans for a no-deal Brexit, with officials lining up to say that the possibility of the U.K. crashing out without agreement on April 12 is increasingly likely.

Commission Vice-President Jyrki Katainen, a former Finnish prime minister, has outlined preparations to protect EU citizens’ access to medicine and medical devices -- but the EU’s plans are all about self-protection, not making a no-deal easier for the U.K. He said that’s up to the British government. “We wish all the best to the U.K.,” he said.

Katainen said it’s “logical” that Britain is “rushing to a hard Brexit” -- by which he means no-deal -- because, he said, the EU doesn’t know what the alternative is if the U.K. rejects May’s deal. “We only know what Britain doesn’t want,” he said.

Leadsom: Parliament Schedule Must Be Flexible (11:15 a.m.)

Leader of the House of Commons Andrea Leadsom has announced next week’s agenda, predominantly secondary legislation related to Brexit. There was no mention of further votes on Brexit options, inevitably perhaps given that talks between the government and the opposition Labour Party are still underway.

Leadsom did say Parliament must remain “flexible” in coming days, and MPs should be prepared to sit on April 15 and 16. The Easter recess had been scheduled to run from April 4-23.

Barclay Leaves Open Potential Compromise (10:30 a.m.)

After Attorney General Geoffrey Cox said he’d prefer a customs union with the EU to not leaving the bloc at all, Brexit Secretary Steve Barclay dropped a hint the government’s red lines may be softening.

He was asked in the House of Commons by pro-Brexit Tory Philip Hollobone to confirm that the party’s manifesto committed to take the U.K. out of both the EU’s customs union and single market, and that the prime minister wouldn’t renege on that promise at next week’s EU summit.

Barclay confirmed the manifesto contained the commitment, but pointedly said it also promised a “deep and special partnership” with the EU, a necessary “balance” given that 48 percent of voters didn’t opt to leave the bloc -- and which May’s Brexit deal reflects.

“It is that compromise that hasn’t been pure enough for some members of my own benches, the government benches, to support it,” he said. He didn’t refer to May’s plans for next week.

Barclay: Lords Will Examine ‘Flaws’ in Cooper Bill (10 a.m.)

In the House of Commons, Brexit Secretary Steve Barclay was asked whether the government would comply with the bill passed by the House of Commons last night which would compel the prime minister to seek an extension to Article 50. He replied that ministers would always obey the law.

But he added that Parliament should not necessarily expect the bill to be passed in the House of Lords, adding that he expects peers to closely examine the “flaws” in the legislation.

In the early exchanges, Barclay also acknowledged that given the votes in Parliament, the government could not guarantee the U.K. wouldn’t take part in elections to the European Parliament. The EU will decide on whether Britain is granted a Brexit extension, he said, and may attach conditions to that. Taking part in the elections would damage public trust in politics, he said.

S&P: Brexit Vote Hurt U.K. Economy (Earlier)

The U.K. economy would have been about 3 percent larger at the end of 2018 had it not voted to leave the EU, according to a report from S&P Global Ratings. That’s an average of 6.6 billion ($8.7 billion) of forgone economic activity in each of the 10 quarters since the 2016 referendum.

S&P said the main pressure on growth came from the weaker pound, which stoked inflation and damped private consumption while at the same time failing to bolster exports.

Hancock: Vote Makes No-Deal ‘Very Unlikely’ (Earlier)

Health Secretary Matt Hancock said a no-deal split from the European Union is “very unlikely” after the House of Commons voted in favor of Labour MP Yvette Cooper’s bill on Wednesday night.

Speaking on BBC Radio 4 on Thursday, Hancock also defended Theresa May’s talks with Labour leader Jeremy Corbyn. “Delivering the prime minister’s deal on Conservative votes hasn’t succeeded,” he said. “The only option left open to her was to seek Labour votes.”

Hancock said he remained opposed to both a customs union with the EU and a second referendum, though he added that all politicians are having to compromise on Brexit.

Earlier:

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