Theresa May Loses 2 Cabinet Ministers Over Brexit

by Samuel Abasi Posted on November 15th, 2018

London, UK :  A second British Cabinet minister has resigned in protest at Prime Minister Theresa May’s draft Brexit deal with the European Union.

Work and Pensions Secretary Esther McVey quit, saying the deal “does not honor the result of the referendum” in which Britain voted to leave the EU.

She resigned an hour after Brexit Secretary Dominic Raab also quit, saying he could not “in good conscience” support the deal.

The resignations leave May’s Brexit deal, and her leadership of the Conservative Party, in peril.

Britain’s Brexit Secretary Dominic Raab earlier resigned, saying he “cannot in good conscience support the terms proposed for our deal with the EU.” The resignation of Brexit secretary Raab comes at a difficult time for May and could raise the risk of a vote of no-confidence in the PM

Prime Minister Theresa May, who is addressing lawmakers this morning on the draft Brexit deal.

She is already facing an uphill struggle to convince enough lawmakers in Parliament to accept the agreement with the European Union.

May made some major concessions to the EU to achieve the deal: Britain, for example, will remain tied to the European Union’s customs union during the transition period and potentially for much longer.

Raab said the agreement was unacceptable, and that “no democratic nation has ever signed up to be bound by such an extensive regime.”

British lawmakers are struggling to summon much enthusiasm for the proposed Brexit plan that Prime Minister Theresa May has agreed with the European Union, with the opposition Labour Party signaling it will vote against.

The opposition Labour Party’s Brexit spokesman Keir Starmer told the “Good Morning Britain” television program that the deal was a “miserable failure of negotiation,” signaling that May is unlikely to be able to count on the main opposition to make up for those from her own Conservative Party who look set to vote against.

Health Secretary Matt Hancock told the BBC’s Radio 4 that lawmakers should back the draft divorce agreement because the alternatives were “ugly.”

“Ultimately this allows us to take back control,” he said.

British Prime Minister Theresa May will start on a campaign to sell a Brexit deal agreed with the European Union to Britain’s divided Parliament.

May, who has persuaded a majority of her cabinet to back the deal, is addressing lawmakers Thursday morning over the terms of the proposed divorce deal. Many in her own party oppose the deal for leaving Britain too closely tied to the European bloc and opposition parties have said they’ll vote against.

Pacifying some in her own party will be a challenge and on Thursday Shailesh Vara quit as Northern Ireland Minister, saying he could not support May’s agreement, which he said “leaves the UK in a halfway house with no time limit on when we will finally be a sovereign nation.”

European Union chief Donald Tusk has called for a summit of leaders to take place on Nov. 25 so they can endorse a draft Brexit deal that has been reached with the British government.

Following an early Thursday meeting, Tusk heaped praise on the EU’s Brexit negotiator, Michel Barnier, who had “achieved the two most important objectives” — limiting the damage caused by Britain’s impending departure and maintaining the interests of the other 27 countries that will remain in the bloc after Brexit.

While British Prime Minister Theresa May is trying to win support within her fractured party as well as Parliament, the EU has held the line behind Barnier during the negotiations.

The pound has fallen sharply after Britain’s Brexit minister resigned from the government, saying he did not agree with the deal the country had struck with the European Union over the terms of its departure next March.

The currency dropped 1 percent, a relatively large decline for an established currency, to $1.2870 within minutes of a tweet by Dominic Raab saying he “cannot in good conscience support the terms proposed for our deal with the EU.”

Investors sought the safest assets, with trading volumes in gilt futures about twice the average of the past 10 days.

Money markets now see the first BOE rate increase in February 2020, compared with November 2019 at the close of trading on Wednesday. That outlook spurred stocks higher, with the benchmark FTSE-100 Index climbing 0.3 percent on higher-than-average volumes. However, shares of Royal Bank of Scotland Group Plc, Barclays Plc and Lloyds Banking Group Plc all fell more than 5 percent, while homebuilders also declined. Bank bonds also declined, while measures of credit risk jumped.

One-month pound option risk-reversals plummeted against both the dollar and euro, with the hurdle of getting the Brexit plan through Parliament still looming large even if May dodges a leadership challenge. Implied volatility on one-month pound-dollar contracts was at 13.07 percent, near the highest level since January 2017.

Sterling, which strengthened 1.8 percent this month through Wednesday, could now be headed for a downturn.

The strong November could turn to cold December for the pound. It’s clearly worrying for the pound as this suggests the passing of the Brexit bill in parliament will be even more challenging for May than recent optimism might have hinted at.

The dollar jumped and traders bought into the safe-haven yen on Thursday after Britain’s Brexit deal with the European Union was plunged into uncertainty, spooking investors.

Prime Minister Theresa May faces a political backlash over the deal, which is considered insufficient by Brexit backers as well as those who wanted to remain in the EU. Parliament needs to approve the deal and it is unclear whether May has the numbers to push it through.

May, who had persuaded a majority of her cabinet to back the deal, is addressing lawmakers Thursday morning. May says she has taken ‘the right choices, not the easy ones’ on Brexit.

Wednesday’s deal not the final deal -Theresa May

What was agreed between the United Kingdom and the European Union on Wednesday night was not the final Brexit deal, British Prime Minister Theresa May told the House of Commons Thursday following several resignations.

Addressing the House, May said that delivering Brexit involves difficult choices. She said she respected the views of those who resigned and thanked them.

“There is no deal which delivers the Brexit the British people voted for without this insurance policy,” May said, referring to the Irish border backstop agreement that has infuriated some Brexiters.

Two Cabinet ministers, two junior ministers and a parliamentary aide resigned on Thursday morning, just hours after May won approval from her Cabinet for the draft Brexit deal.

Image: Dominic Raab (right) and Esther McVey

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Samuel Abasi

Samuel Abasi

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