Brexit | May gets rebellion reprieve, but faces warning from allies

Anti Brexit campaigner demonstrates in Westminster in London

British Prime Minister Theresa May got a reprieve in one of her Brexit battles yesterday as party rebels said they did not yet have the strength for a leadership challenge. But she faced a new headache as parliamentary allies warned they could remove support from May’s minority government if she does not alter her divorce deal with the European Union.

Northern Ireland’s Democratic Unionist Party struck a deal last year to back May’s Conservatives on major legislation. But the Protestant, pro-U.K. party opposes the Brexit deal’s plans for keeping the border between Northern Ireland and EU member Ireland open after Brexit, saying it weakens the ties binding the U.K. by creating separate trade rules for Northern Ireland.

In a warning to May, DUP lawmakers abstained or opposed the government during several votes on finance bill earlier.

DUP lawmaker Sammy Wilson said the votes were “designed to send a political message to the government: Look, we’ve got an agreement with you but you’ve got to keep your side of the bargain.”

May defended her deal in an article for yesterday’s Belfast Telegraph, saying it “puts Northern Ireland in a fantastic position for the future.”

She said businesses would benefit because Northern Ireland would “be a gateway to both the EU market and the rest of the U.K.’s market.”

In better news for the beleaguered British leader, a leading pro-Brexit lawmaker acknowledged that the rebels haven’t mustered the numbers for a leadership challenge.

Jacob Rees-Mogg is one of a group of Conservative legislators who have written letters calling for a no-confidence vote in the prime minister. They say the draft divorce deal would leave Britain tied to the bloc’s rules without any say in making them.

The group has previously said it was confident of getting the 48 letters — from 15 percent of Conservative lawmakers — needed to spark a leadership challenge.

“Patience is a virtue, virtue is a grace,” Rees-Mogg said. “We shall see whether letters come in due time.”

The draft agreement reached last week triggered an avalanche of criticism in Britain and left May fighting to keep her job even as British and EU negotiators raced to firm up a final deal before a summit on Sunday where EU leaders hope to rubber-stamp it.

The 585-page, legally binding withdrawal agreement is as good as complete, but Britain and the EU still need to flesh out a far less detailed declaration on their future relations.

May’s office said she would meet European Commission President Jean-Claude Juncker in Brussels today as part of work to finalize the declaration.

EU leaders have largely welcome the deal, but Spain has expressed concerns, saying the wording leaves unclear how Gibraltar, the British territory at the southern tip of the Iberian Peninsula, would be dealt with.

Spanish Prime Minister Pedro Sanchez said yesterday that his country would vote against the divorce agreement if Gibraltar’s future isn’t considered a bilateral issue between Madrid and London.

Sanchez told a business forum in Madrid that Spain “cannot accept that what will happen to Gibraltar in the future depends on negotiations between the U.K. and the EU. It will have to be something that we define and we negotiate and agree between the U.K. and Spain.”

If the EU approves the deal it needs to be passed by the European and British Parliaments.

The parliamentary arithmetic looks daunting for May, and if lawmakers reject the agreement in a vote expected next month, the U.K. would face a political crisis, with Brexit day looming. Jill Lawless, London, AP

Corbyn against ‘No-Deal’ exit

BRITISH OPPOSITION leader Jeremy Corbyn said his party will try to stop Britain leaving the European Union without an agreement if PM’s divorce deal is rejected by Parliament. Corbyn, leader of the Labour Party, said in a speech to the Confederation of British Industry that “neither the Cabinet nor Parliament would endorse such an extreme and frankly dangerous course.” He said “Labour will not countenance a no-deal Brexit,” which could cause upheaval for businesses and people. But it is unclear what would happen if Parliament rejected the deal when it is put to a vote, likely next month. Corbyn said the proposed agreement is “a botched, worst-of-all-worlds deal which is bad for Britain.”

Bank of England to publish deal analysis next week

The Bank of England will publish its economic analysis of Prime Minister Theresa May’s Brexit deal next week as well as an assessment of what would happen if Britain crashes out of the European Union with no deal.

The assessments will be sent to lawmakers on the Treasury Select Committee on Nov. 29 “in good time before any parliamentary vote,” Governor Mark Carney said yesterday.

However, Carney said the bank won’t publish an assessment of there being no Brexit.

May is aiming to get the backing of EU leaders on Sunday for the withdrawal deal her government agreed on with the EU’s executive Commission. She is also looking to flesh out a political declaration about the future relationship with the EU.

In his first public comments since May agreed on the draft withdrawal agreement, Carney emphasized the importance of a transition period after Britain formally leaves the EU on March 29.

Carney said he expects the withdrawal agreement to “support economic outcomes” as it would eliminate some of the uncertainty that has surrounded the British economy since the country voted to leave the EU in June 2016.

Part of the deal involves Britain following EU rules after Brexit day until the end of 2020. However, there’s scope for that transition to be extended and that would provide businesses more time to adapt to new relations with the EU.

May’s deal with the EU on how Britain leaves the EU has been met with widespread opposition within the British parliament, raising the prospect that it might be voted down. If the parliament votes against it, Britain could crash out of the EU without a deal.

Carney said “we’re going to find out relatively soon” whether a no-deal Brexit has become more likely.

Bank of England policymakers warned that British businesses are increasingly concerned about the prospect of a no-deal scenario that could see tariffs placed on British exports, border checks reinstalled, and restrictions imposed travelers and workers.

The bank’s chief economist, Andy Haldane, told lawmakers that Brexit uncertainty is the “single largest headwind” to the British economy and that the impact has become “somewhat greater” in recent weeks amid talk of a no-deal Brexit.

As a result, he said, British economic growth is set to be “somewhat weaker” in the fourth quarter from the quarterly rate of 0.6 percent recorded in the third.

Michael Saunders, another rate-setter at the bank, said most businesses were not ready for a no-deal Brexit. AP