Brexit Bulletin: The Impossible Job

(Bloomberg) -- Today in Brexit: May's whips are furiously trying to convince rebels. It's not looking good.

Theresa May has five days to pull off the impossible.

Chief Whip Julian Smith is trying to talk skeptical members of Parliament into voting for the prime minister's Brexit deal, but so far he has little to offer them. One Tory who joined a meeting with him yesterday said Smith was simply listening to the criticism of May's deal, Kitty Donaldson reports. He'll meet more lawmakers today. But the government will need something new, and big, up its sleeve to sway the rebels, who probably number as many as 100.

Things are looking so bad for May that Cabinet ministers are telling her to pull the vote, The Times reports. There's a summit of European Union leaders on Dec. 13-14, which could become one final opportunity to go back and ask for tweaks to the deal, even though EU leaders have made pretty clear that the current plan is their final offer.

Some Tory rebels do want to come around. The argument is that rejecting May's deal risks ushering in a softer Brexit, a second referendum, or no Brexit at all. It's an argument Trade Secretary Liam Fox and May's pro-Brexit former adviser Nick Timothy are both making forcefully — one that's become stronger since Parliament voted to give itself more power over the endgame.

“We're between a rock and a hard place; we risk Brexit not getting through,” Brexit-supporting Tory Edward Leigh said in an interview. “I don't know how I'm going to vote next week. I'm looking for a lifeboat from the government in the next few days.”

The Democratic Unionist Party raised the stakes on Wednesday, threatening to bring the government down if the deal goes through. The Northern Irish party doubled down on its position as the publication of May's legal advice confirmed its worst fears about the Irish backstop. Nigel Dodds, the party's leader in Westminster, had a clever message for Brexit-backing Tories also, telling ITV that if the deal is rejected, the party would support the government in a no-confidence vote.

If May loses the vote on Tuesday, we're in uncharted waters. A no-confidence vote could follow, a general election, a leadership challenge or some Christmas-canceling combination of the three. The government keeps refusing to be drawn on “Plan B.” Only five sleeps until we find out what it is. 

Today's Must-Reads

• Of course Theresa May wanted to keep the Brexit legal advice a secret: It lays bare the dangers her deal poses to the territorial integrity of the U.K.
• May has engaged with executives as never before in an effort to win support for her deal. Her business envoy, a London banker named William Vereker, has played a key role.
• Michael Fallon, former defense secretary and May ally, writes in the Telegraph that MPs should reject the deal to give Britain “time and space to think again.”

Brexit in Brief

Betrayal | Len McCluskey, general secretary of the Unite union, has warned Labour lawmakers in private against backing a second referendum, saying voters could see it as a betrayal, the Guardian reports. McCluskey is an ally of Labour leader Jeremy Corbyn and an influential figure in the party. In July, the union backed away from a motion calling for another vote in a last-minute compromise.

More Time | EU leaders could offer May an extension of the negotiating period beyond March 29 at the summit next week as a way of avoiding no-deal, the Telegraph reports.

Stealing Brexit | Trade Secretary Liam Fox, a veteran euroskeptic, is sticking to the best argument Brexiteers have to support May's deal: Reject this and risk losing Brexit altogether. “I think there is a real danger that the House of Commons, which has a Remain majority, may attempt to steal Brexit from the British people, which I think would be a democratic affront,” he told Parliament.

Unprepared | Royal Bank of Scotland CEO Ross McEwan says the bank's business customers aren't ready for a no-deal Brexit, and he's backing May's deal as the only alternative. The bank has a £3 billion ($3.8 billion) fund that it will use to fund customers if they suddenly need it. “We are going to hold a lot of strong liquidity so we can fund our customers,” McEwan told Bloomberg in an interview.

Can't Prepare | Airbus SE, which has long been working on contingency plans for a no-deal split, said it's impossible to prepare for everything. “On the customs side, obviously the time is very short so we're doing what we can, but preparations will not be all-comprehensive,” CEO Tom Enders said in Brussels. “That means that we may not have contingency plans for everything.”

On the Markets | Goldman Sachs Group is expecting a Brexit deal will eventually pass through Parliament, sending both the pound and gilt yields climbing. The U.S. bank expects May's Brexit divorce deal to be rejected by lawmakers on Dec. 11, leading the pound to drop by 1 percent to 2 percent. But it then expects a deal to likely pass in early January, causing sterling to climb around 5 percent to $1.34. The pound was broadly unchanged at $1.2715 early on Thursday.

Careful What You Wish For | As European cities seek to lure business from post-Brexit London, a Swiss village has a cautionary tale about relying on finance jobs to drive the economy. Patrick Winters reports from Pfaeffikon.

Coming Up | Brexit Secretary Stephen Barclay takes questions in Parliament at 9:30 a.m. Chancellor Philip Hammond opens the Brexit debate in the House of Commons later on.

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To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Jones Hayden

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