Theresa May Issues Ultimatum after MPs Ditch No-Deal Brexit

The prime minister’s challenge came after she suffered another humiliating defeat in parliament, with a majority of MPs defying her wishes by voting to take a no-deal exit off the table permanently. May had backed a more equivocal stance towards leaving the EU without an agreement.

May’s decision to hold a third vote on her Brexit plan next week, just days before she is due to attend an EU summit in Brussels, is a calculated gamble that she can finally bring the escalating Brexit drama to a head before formally seeking to delay Britain’s departure date from March 29 to June 30.

The prime minister said that if a deal was not agreed by MPs before the March 21 EU summit, she would be forced to seek “a much longer extension” of the exit process, requiring Britain to take part in European Parliament elections in May, the Financial Times reported.

The move infuriated Tory Eurosceptics but, after Wednesday night’s Commons votes, they are feeling extreme pressure to come into line and support May’s deal. “The only way out is for (Eurosceptics) to support the prime minister’s deal,” admitted one MP in the anti-EU European Research Group. “Otherwise chaos.”

The Democratic Unionist party, whose 10 MPs prop up May’s government and still oppose her deal, said on Thursday it was talking to the government and would continue to have “conversations aimed at getting a sensible deal for the entire UK and one that works for our neighbors in the Republic of Ireland”, according to a party official.

Conversations are understood to be taking place over an idea raised by Jacob Rees-Mogg, the head of the ERG, in the Commons earlier this week, on how article 62 of the Vienna Convention on the Law of Treaties could be used to enable the UK to exit any Irish backstop, the measure to prevent a hard border in Ireland.

Responding to Rees-Mogg on Tuesday, Brexit secretary Stephen Barclay said the UK would be entitled to end the treaty ratifying the withdrawal agreement “if the facts clearly warranted that there had been an unforeseen and fundamental change of circumstances affecting the essential basis of the treaty on which the United Kingdom’s consent had been given”.

He said: “It would, in the government’s view, be clear in those exceptional circumstances that international law provides the United Kingdom with a right to terminate the withdrawal agreement.”

In an unexpected challenge to May’s authority, four members of her own cabinet broke ranks and abstained in defiance of the party whip on Wednesday evening, backing the move to take a no-deal exit off the table permanently.

The pound rallied sharply on the sign of unexpectedly strong parliamentary support for leaving the EU with a formal agreement with Brussels, rising above $1.335, its highest level in almost a year. Against the euro, it hit €1.1772, its best level in almost two years.

In Asian trading on Thursday, the pound had slipped 0.67 per cent against the US dollar, trading at $1.3246 by early afternoon.

Despite MPs’ rejection of a no-deal Brexit, the European Commission made clear it was not up to the UK to determine if it left the EU with a deal or not; ultimately, the remaining 27 members must agree to extend talks beyond March 29.

 “To take no-deal off the table, it is not enough to vote against no-deal — you have to agree to a deal,” said a commission spokesman. “We have agreed a deal with the prime minister and the EU is ready to sign it.”

The amendment calling for the Commons to reject no-deal Brexit at any time and under any circumstances passed by 312 to 308 — a mere four votes — throwing Downing Street’s whipping operation into confusion.

The government’s own motion had sought to reject the no-deal option only for March, while keeping it on the table in the long term. Having seen that motion forcibly amended by MPs, May then sought to whip her own MPs against it in scenes that aides said were farcical.

That manoeuvre was even more convincingly rejected by the Commons by 321 to 278 votes in a show of force by parliamentarians.

On that final vote, 12 ministers, including four members of cabinet — Greg Clark, Amber Rudd, David Mundell and David Gauke — risked being sacked by abstaining. “They didn’t have much choice,” said one Tory aide. “They are principled people.”

Number 10 indicated that the rebels would not face the sack. Sarah Newton, a junior minister, resigned in order to vote against the government.

Parliament is preparing for its third historic vote of the week on Thursday evening, when MPs are expected to agree a time-limited extension of Article 50.

Although May wants MPs to back her deal, opposition Labor and pro-EU Conservative MPs will seek to prove there is a Commons majority for an alternative “soft Brexit” plan, including a customs union with the EU and single market membership.

Although Downing Street does not favor “indicative votes” in the Commons next week to test support for a Brexit Plan B, it is likely to be imposed upon a prime minister who has lost control of Brexit.

Philip Hammond, the chancellor, told Sky News on Thursday that while he “would be delighted if a consensus emerges behind the prime minister’s deal . . . we also have to explore other options for parliament to express a view about how we resolve this impasse.”

 “I understand why (Brexiters) may not find the prime minister’s deal perfectly in line with their view of the optimum future relationship. But it is clear the House of Commons has to find a consensus around something, and if it is not the prime minister’s deal, I think it will be something that is much less to the taste of those of the hard Brexit wing of my party.”

Downing Street hopes that if the Commons signals support for a much softer Brexit — such as seeking status similar to Norway, which is not an EU member but is in the single market — it could scare hardline Eurosceptic MPs into backing down and finally supporting May’s deal.

Anti-EU MPs hate the idea of staying in the single market, which would mean continuing payments to Brussels and allowing EU citizens freedom of movement in Britain.

Earlier, Hammond has promised an end to austerity if parliament was able to leave the EU with an agreed deal, suggesting that May may have to pivot to a softer Brexit to break the Westminster gridlock.

 “We will have the opportunity to start to map out a way forward towards building a consensus across this House for a deal we can, collectively support, to exit the EU in an orderly way,” Hammond told MPs.

In his Spring Statement, Hammond revealed official forecasts of economic growth slowing this year but picking up subsequently.

However, he warned MPs that those predictions were based on an orderly exit from the EU and that a no-deal Brexit could imperil a “deal dividend” of up to £26bn.

European leaders are growing increasingly exasperated by the failure of the House of Commons to decide a way forward with just over two weeks left before the UK is due to leave the EU.

Michel Barnier, the EU’s chief Brexit negotiator, told the European Parliament in Strasbourg that the chances of Britain leaving the bloc without a deal by “accident” were rising by the day.

 “The risk of no-deal has never been higher,” he said. “I recommend not to underestimate that risk and its consequences.”

John McDonnell, UK shadow chancellor, told BBC Radio 4’s Today programme that Labor would call for a “limited” extension to Article 50 on Thursday.

He said: “We’ll be putting forward our own proposals about a limited extension because there is no way in which, to be frank, even if Theresa May’s deal had gone through yesterday I think the prime minister would have had to apply for an extension because most of the legislation associated with a deal hasn’t gone through yet.”