Brexit Bulletin: Corbyn’s Path to Power via Brexit

Labour leader Jeremy Corbyn’s long-awaited Brexit speech on Monday spells trouble for Theresa May, and could lead to a rewrite of the U.K’s Brexit policy.

Corbyn is expected to follow the calls of his senior colleagues and declare himself in favor of keeping the customs union. He’s been notably cagier than Labour Brexit spokesman Keir Starmer, who said on Sunday that the party leadership was unanimous in its desire to stay in the trading setup. But if Corbyn does take that stance, the stage would be set for a showdown in Parliament, where a rebellion by a small number of pro-Europeans in May’s Conservative Party could derail her strategy.

A lifelong euroskeptic, Corbyn’s desire to precipitate a crisis for May might be guiding his feelings about Europe, Alex Morales and Rob Hutton write. Amendments to Brexit legislation currently going through the House of Commons could force a shift in the government’s policy, and ultimately defeat May.

May’s fragility was laid bare in December when Tory rebels teamed up with Labour to defeat her in Parliament, ensuring that lawmakers will have a meaningful vote on the final deal she strikes with the European Union. There’s probably a majority in Parliament to stay in a customs union – the option that business is also lobbying for.

“Whether it’s our amendments or the cross-bench amendments, crunch time is now coming for the prime minister because the majority of Parliament does not back her approach to a customs union,” Starmer told BBC TV on Sunday.

May has ruled out any form of customs union with the EU after Brexit, saying that such an arrangement would curtail Britain’s ability to broker new trade deals. Striking out in the world alone to forge new trading partnerships was a key part of the narrative of the Brexit campaign. If she abandons that stance, she risks alienating another faction within her party: the hardcore Brexiters, led by Jacob Rees-Mogg. They are numerous enough to at least prompt a leadership vote in the party.

Tories thinking of rebelling will be faced with the charge that they risk ushering in a self-proclaimed Socialist who wants to rewrite the rules of business. With the two parties neck-and-neck in the polls, the risk of triggering a general election will hold some potential rebels back.

But what if the U.K. does end up with a customs union? Business wants it as a distant second-best to staying in the single market. It would maintain tariff-free trade within the bloc, smoothing commerce and helping keep supply chains intact. It would also go at least some way to solving the problem of the Irish border. But while the Turkish model of partially open trade is often cited, it has disadvantages that the Turks resent. When the Confederation of British Industry called for Britain to stay in a customs union, it said it should be “built on lessons learnt from others.” And to get a better deal than the Turkish one, the U.K. may have to make a few more concessions.

Brexit Latest

Three Warnings | The Sunday Times reports that May was warned of three existential threats at the meeting last week of top Cabinet officials at her Chequers country home: Chief whip Julian Smith told her of the “real, real danger” of Tory rebels uniting with Labour to keep the U.K. in the customs union. Davis warned of the threat of Rees-Mogg and his hardline Brexit backers. And Northern Ireland Secretary Karen Bradley said she couldn’t be sure the Tories’ Northern Irish allies in Parliament would turn up for important votes.

Ireland Is the Issue | The European Commission is expected to unveil this week the legal text of the withdrawal agreement, and all eyes will be on how the political accord reached on the Irish border in December has been translated into legal text. Dara Doyle reported last week that the EU doesn’t want to include May’s pledge about avoiding a manned border on either side of the Irish Sea in the text. It considers that promise an internal U.K. matter. The explicit pledge will be that Northern Ireland sticks to the same rules as the Republic of Ireland as a fallback option if the final EU-U.K. trade deal isn’t comprehensive enough to avoid a policed border on the island. The Democratic Unionist Party, which props up May’s government, won’t like it.

A Red Line Turns Pink | May is preparing proposals that would blur one of her key red lines: that the European Court of Justice won’t have jurisdiction in the U.K. after Brexit. Government documents outline a proposal that would keep companies under the oversight of EU regulators that in turn answer to the ECJ, Tim Ross reports. The move is likely to enrage Brexit supporters in May’s party.

Pure Illusion | Just hours after the British Cabinet agreed to a united stance on Britain’s post-Brexit trading relationship with the bloc, EU President Donald Tusk condemned the plan as “based on pure illusion.” He told reporters: “It looks like the cake philosophy is still alive.” The tone is more surprising than the rejection itself, which was well-flagged.

The Rock | Spain is demanding joint management of Gibraltar’s airport and greater cooperation on tax fraud and smuggling after Brexit, the Financial Times reports. Spain has a veto over the Brexit deal as it applies to Gibraltar, so its demands could derail the wider EU-U.K. agreement. In good news for the U.K. however, Spain says now is not the time to try to win sovereignty of the rocky outcrop that was ceded to Britain in 1713.

On the Markets | Pound traders are waiting for clarity from Corbyn’s speech on Monday and May’s on Friday. Sterling climbed on Friday to pare some of its weekly decline against the dollar, while reaching its strongest in two weeks against the euro. In early trading on Monday the pound edged higher, to $1.4018.

Coming Up | Another negotiating round gets under way in Brussels on Monday. Trade Secretary Liam Fox gives his Brexit speech on Tuesday. EU President Donald Tusk meets May in Downing Street on Thursday, the same day she holds a special Cabinet meeting. Her big Brexit speech on the future relationship is Friday.

And Finally…

Quote of the week is from Jean-Claude Juncker, who had a stab at humor on Friday as he spoke to reporters at a summit in Brussels hours after the Chequers meeting concluded.

“I am not the British prime minister. It would be good for Britain if I was.”

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