Brexit Update 5th April 2019

By April 20, 2019 Brexit Updates

Top 3 developments 

  • The Prime Minister has requested an extension of Article 50 until 30th June 2019.
  • The Cooper Bill to legally bind Government to apply for an extension and avoid a no deal passed through the Commons by one vote and will be debated in the Lords on Monday.
  • Parliament failed to find a Brexit option that would gain a Parliamentary majority after a second round of indicative votes.

UK Update

Flextension

The Prime Minister has written to the EU requesting a Brexit extension until 30th June 2019. May has stated that she wants the extension to be “as short as possible” and for Britain not to take part in the EU elections. However, it is unlikely that it will be granted by the EU27 without a deal being agreed by Parliament ahead of the EU Summit on Wednesday. The President of the European Council, Donald Tusk, has proposed a 12-month “flexible” extension that would allow Britain to leave sooner if Parliament ratified a deal. Reports suggest that the former Polish Prime Minister is determined to give Downing Street as much flexibility as possible to avoid suggestions that Brussels is seeking to trap Britain in the EU.

A Parliamentary Coop-er

On Wednesday night, the House of Commons voted in favour of forcing an extension of Article 50 beyond 12th April in a tight race that saw the Bill pass its third reading by a single vote (313-312). The Bill, spearheaded by backbench Labour MP Yvette Cooper and brought forward by the Conservative MP Sir Oliver Letwin, calls on the Government to seek an extension of Article 50 and avoid a no-deal Brexit. Both Labour and SNP whipped in support of the motion, while 20 Conservative MPs rebelled to vote in favour of it.

The Bill was discussed in the Lords yesterday and whilst Brexiteer Lords are outnumbered by Remainers and will be unable to defeat the Bill, they used a filibuster tactic to delay the Bill passing through last night. The Chief Whip John Taylor made a compromise with Labour to avoid the Bill going through in one sitting and peers having to vote through the night. The Bill will now be brought back for its third reading in the Lords of Monday. Once it has passed through the House it will be granted Royal Assent, legally binding the Government’s hands to extend the Brexit process and avoid a no deal Brexit next Friday, even though the Prime Minister has already applied for an extension this morning.

Ultimately, it is the EU which decides whether to grant an extension. EU leaders have continued to reiterate that a short extension beyond April 12th is not an option unless the Withdrawal Agreement is agreed in the Commons.

Fortune favours the Boles

Parliament held indicative votes once again on Monday and, despite the expectation that a looming no-deal departure would focus minds, failed to find a majority for any of the four following Brexit options that were put forward: Customs Union, Second Referendum, Common Market 2.0 and giving Parliament power to stop no-deal.

Nick Boles MP resigned the Conservative Whip shortly after the results, stating that the Tory party has refused to compromise. He will now sit as “an independent progressive conservative”. Brexit Secretary Stephen Barclay MP seemed to indicate that there was little chance of the PM shifting back to no deal, which has been confirmed by her second Article 50 extension request this morning. Barclay continued to state that the only option was to “find a way through that allows the UK to leave with a deal” as soon as possible.

The focus then turned to a possible third round of indicative votes, with a proposal being brought to the House on Wednesday. This delivered the first deadlocked vote in the Commons for more than a quarter of a century as 310 MPs vote for and 310 MPs voted against a third round of indicative votes to be held on Monday 8th April. The Speaker cast the deciding vote after a tied result, voting with the Government, in accordance with precedent, to block an amendment by Labour’s Hilary Benn that would have given MPs more time to hold further indicative votes on Monday – the last time the Speaker gave the ruling vote in Parliament was in 1993.

Cabinet spend the night together

Theresa May led an intense seven-hour Cabinet meeting on Tuesday, which led to the PM reaching out to the Labour leader Jeremy Corbyn to find a Brexit consensus that would pass through the Commons. Despite promising to leave the Customs Union and Single Market in the 2017 Conservative Manifesto, the PM indicated that she would be willing to remain in both of these in order to get a Brexit deal through the Commons. Although there has been strong opposition from her backbenches and two Ministerial resignations, it is clear that she saw this as the only way to break through the Brexit logjam.

Reports from the Cabinet meeting were contradictory, but some clear themes have emerged. Firstly, the prospect of a General Election was certainly raised and quashed, with Party Chairman Brandon Lewis insisting that there was not enough money to contest a snap election. There was also strong opposition to reaching out to Corbyn, as it would legitimise him and undermine their arguments that he was unfit for Government.

But there was conflicting information about how many Ministers rejected a long extension to Article 50. Some reports claim there were up to 14 Ministers who rejected it, but Energy Minister Claire Perry (who attends Cabinet) clarified that there were only four. Surprisingly however, despite such strong opposition being raised, there have been no Cabinet resignations as of yet. But it took a couple of days for Cabinet Ministers to resign after the Chequers Agreement last summer, so resignations over the weekend should not be ruled out.

Hot-Cross Talks

Talks between Labour leader Jeremy Corbyn and Theresa May took place on Wednesday and Thursday. The two sides are seeking agreement on changes to the Brexit deal’s future relationship pillar – the Political Declaration. Labour has said a permanent customs union should be negotiated with the EU, which is widely opposed within the Conservative Party. Tory Ministers attempted to convince Labour that the backstop already acts as a custom union and therefore should be enough to gain their support. Unsurprisingly, this line of thought was rejected by the Labour team, with Labour drawing conclusions that May is unwilling to grant any meaningful concession in order to achieve a cross-party Brexit compromise. Reports suggest that the Prime Minister will write to Corbyn today outlining the areas which she is willing to consider softening her approach.

With more talks expected today, Tory MPs are concerned that the Prime Minister will include a second referendum within this compromise as Corbyn is under significant pressure from his own party to include the option. Tom Watson, Labour’s deputy leader, said: “I don’t think our party would forgive us if we were to sign off on a Tory Brexit without that kind of concession.” However, officials will write to Corbyn today outlining their wishes for a Brexit deal and reports suggest that some will request that a second referendum is not included.

If a compromise is agreed upon today, which is unlikely, then the Prime Minister will bring the deal to the House on Monday in the hope that it will be agreed upon ahead of the EU Council Summit on 10th April, allowing for a short extension.  However, it is extremely unlikely that such a deal would get the backing of Parliament, as at least 100 Tory MPs would be certain to vote against any deal with a customs union and up to 80 Labour MPs have made clear they will not support any deal that does not include putting the plan to a second referendum.

Better to be safe than sorry

Following the rejection of the PM’s deal for a third time on Friday 29th March, the opportunity to guarantee that the UK would not participate in European Parliamentary elections was removed. David Lidington, the PM’s de-facto deputy and head of the Cabinet Office, therefore wrote to the Electoral Commission on Monday to confirm that the Government would reimburse spending on contingency preparations for the European Parliamentary elections. Although it is not yet clear how much money will be needed, it is likely to be well over £100 million, as the previous European elections in 2014 cost £109 million.

The European Parliamentary elections are due to be held on the 23rd May 2019. The EU extended Article 50 to 22nd May 2019 precisely so the UK could avoid participating in these elections. However, this extension date was conditional on a deal passing through the House of Commons. Considering no deal has passed as of yet, and MPs voted to rule out a no-deal Brexit on 11th April  and seek a long extension, it is now likely that the UK will have to participate in these elections.

EU Update

The Chronicles of Barnier

The EU Chief Negotiator Michel Barnier warned on Tuesday that a no-deal Brexit was becoming more likely by the day. His remarks follow those of the Dutch PM Mark Rutte, who said that a no-deal was now ‘probable’. Unlike the EU Commission President Jean Claude Juncker – who expressed his frustration by calling David Cameron the ‘great destroyer of modern times – Barnier stressed that he had some patience left, and suggested that he was willing to speak to MPs directly about delaying Brexit further. These comments completely undermined Theresa May’s authority, as the Chief Negotiator went over the PM’s head and appealed to MPs instead to find a solution.

Although the EU have suggested that they will consider delaying Brexit further, Barnier highlighted that the UK will need to give a strong justification for a delay, such as organising a new referendum, a general election or a pivot to a customs union or single market plan. This presents an almost impossible choice for the PM, who faces either a no-deal or a lengthy delay, having ruled out a general election, second referendum or softer Brexit.

The EU has given justification that an extension would negatively affect them, as EU businesses are warning of the harmful costs of extending the uncertainty, and policymakers are worried about how it would impact their decision-making autonomy. It is still plausible that the EU27 will simply reject a delay and the UK would crash out of the EU on the 11th April. While this is unlikely, Article 50 extensions require unanimous approval from the EU27, and all it would take is one nation to make the executive decision to end this agonising uncertainty, and the UK would have no choice but to face a no-deal Brexit.

Dublin the Pressure

Germany and Ireland held Brexit talks yesterday, as the everchanging deadline and a threat of a no deal loomed. Many have viewed these talks as a significant intervention from Germany considering the crucial stage of Brexit negotiations. Merkel has stated that Germany will stand with Ireland “every step of the way…I wanted to demonstrate with my visit that even as we head into this crucial phase we want to continue to stand together as 27”. The pair held roundtable discussions with members of the public from either side of the border to discuss their frustration. It is unclear whether an alternative solution to the backstop has been put forward, but Merkel’s visit and statement have made it clear that Ireland will have the full support of the EU27 as the Brexit negotiations continue.

Upcoming Key Dates

  • 8th April: Third Debate of the Withdrawal Bill in the Lords / potential delivery of cross-party compromise.
  • 10th April: EU Summit.
  • 12th April: Cut off point for longer extension/UK leaves without a deal.
  • 30th June: Brexit deadline should the EU accept the extension request.
  • 31st December 2020: UK Planned exit from the transition agreement

 

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