(Bloomberg) -- Prime Minister Theresa May's flagship piece of Brexit legislation will be debated for the first time Thursday as her chief negotiator took questions and explained that on the tricky matter of the divorce bill “it is clear that the two sides have very different legal stances.”
As if negotiating Britain's departure from the European Union wasn't hard enough, Brexit Secretary David Davis also needs to steer through legislation that will copy and paste European Union law into the British statute.
EU negotiator “Michel Barnier and I agreed that we do not anticipate making incremental progress on the final shape of the financial deal in every round,” he told lawmakers in the House of Commons. “It is also clear there are significant differences to be bridged in this sector.”
With the main opposition Labour Party saying it'll vote against the bill at the end of the so-called second-reading debate Monday, and the Scottish National Party and Liberal Democrats also opposing the measure, Davis's main task is ensuring they don't tempt enough dissenters from his own Conservatives to defeat the government.
Unionist Support
May has an effective Commons majority of 13 with support from Northern Ireland's Democratic Unionist Party, meaning seven Tory rebels could be enough to defeat the government. The signs are they won't rebel -- yet. One prominent Europhile Conservative member of Parliament, Anna Soubry, said on Monday she doesn't know of any Conservative who plans to oppose the bill at this stage.
The bill is “the single most important step we can take to prevent a cliff-edge for people and businesses, because it provides legal certainty,” May said in a statement. “I look forward to the contributions of MPs from across the house. But that contribution should fit with our shared aim: to help get the best Brexit for Britain.”
Henry VIII Powers
Labour's opposition stems from clauses in the bill allowing ministers to modify laws with little scrutiny. Called “Henry VIII powers” after the Tudor monarch who exercised them, Davis says they're needed to ensure tweaks are made to EU laws that, for example, make reference to EU regulators, while Labour is worried they could be misused.
“There comes a point where Parliament has to assert itself,” Labour's Brexit spokesman, Keir Starmer, told BBC Radio 4. “We're not just going to spectate while the government negotiates and takes us forward. The idea of Parliament not being involved in that is unthinkable.”
Former Tory Attorney General Dominic Grieve has also expressed reservations about that aspect of the bill. But pro-European Tories are more likely to oppose Davis when the bill moves onto the next step, called the committee stage. That's when legislators can submit amendments, and Soubry said she's prepared to put her name to “sensible” changes.
There was further criticism for May from the House of Lords Constitution Committee, which she told lawmakers on Wednesday had supported the bill. Committee Chairwoman Ann Taylor accused the premier of “selective” quotation of a report by the panel and said members want a series of safeguards in the legislation and “meaningful” scrutiny by lawmakers.
Misquoted
“We acknowledge that the government needs significant powers in order to deliver legal certainty after Brexit,” Taylor said in a statement. “However, we warned the government that such powers must come with tougher parliamentary scrutiny mechanisms and we are disappointed that we have not only been misquoted by the government, but that our key recommendations have been ignored.”
The Brexit focus moves to Parliament after a couple of days that have highlighted continuing business concerns over May's strategy. Her office distributed a letter to major U.K. companies for senior executives to sign praising the government's approach, according to a draft seen by Bloomberg. Sky News television, which first reported the move Wednesday, said company chiefs expressed incredulity at being asked to sign.
A day earlier, a Home Office document leaked to the Guardian newspaper set out measures to restrict immigration from the EU and prioritize British workers for jobs. It drew criticism from employer groups including the Food and Drink Federation.
Davis returned from Brexit negotiations with his EU counterpart, Michel Barnier, last week. The discussions ended in acrimony amid a stalemate over Britain's financial obligations on leaving the bloc.
There is a “powerful legal case” that the U.K. will not owe the EU any money at the time of withdrawal, the European Research Group, a coalition of more than 80 pro-Brexit Conservative lawmakers, said Wednesday. Instead, the EU owes Britain about 10 billion euros ($11.9 billion), Charlie Elphicke, one of its members, said in a statement.
Main Impediments
The U.K's refusal to accept any legal financial obligations beyond its last payment to the EU budget in early 2019, disagreements over the enforcement of citizens' rights, and lack of progress in shielding the Good Friday peace agreement in Ireland are among the main impediments holding back talks, according to people briefed on a discussion between Barnier and European commissioners in Brussels on Wednesday.
Progress was achieved on secondary matters, including social-security coordination, frontier workers, the recognition of professional qualifications, and the common travel area in Ireland, according to Barnier's briefing to the commissioners.
Read more: Brexit's Repeal Bill Faces Scrutiny After Summer: QuickTake Q&A
The consensus in the European Commission is that the chances of a cliff-edge Brexit without a deal have receded, due to last June's election result limiting May's room for maneuver and the Labour Party's decision to mount a greater challenge to May's strategy, the people said, asking not to be named, as discussions aren't public.
Barnier's team is set to publish updated papers outlining the EU's position on intellectual property rights, customs-related matters needed for an orderly withdrawal of the U.K. from the EU, the use of data and information obtained before the withdrawal date, and public procurement, the people said, asking not to be named, as EU discussions are private.
Another EU paper will place the responsibility for avoiding a hard border with Ireland onto the U.K., The Guardian reported in its Thursday edition. The bloc also wants Britain to protect 3,300 food and drink products, such as Parma ham, feta cheese and Spanish cava from British imitations after Brexit, the newspaper said.
--With assistance from Thomas Penny
To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net, Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net.
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Andrew Atkinson
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
