UK Cabinet Backs Draft Brexit Deal – Theresa May

by Samuel Abasi Posted on November 14th, 2018

London, UK : British Prime Minister May said today that her Cabinet ministers agreed to a draft deal on the UK’s exit from the European Union. But she could face the ultimate test as junior coalition partners hint at fresh elections.

British Prime Minister Theresa May on Wednesday secured support for a draft Brexit agreement from her Cabinet after a marathon five-hour meeting.

“The collective decision of cabinet was that the government should agree the draft withdrawal agreement and the outline political declaration,” she said, after a five-hour meeting.

Speaking over protesters shouting anti-Brexit slogans from the end of Downing Street, she said the deal, 585 pages long, was the best that could be negotiated.

“When you strip away the detail, the choice before us was clear: this deal, which delivers on the vote of the referendum, which brings back control of our money laws and borders, ends free movement, protects jobs security and our Union; or leave with no deal; or no Brexit at all,” she said.

No ministers threatened to resign over the deal, which May hopes will satisfy both Brexit voters and EU supporters by ensuring close ties with the bloc after Britain leaves on March 29.

But the weakest British leader in a generation now faces the ordeal of trying to push her deal through parliament, where opponents lined up to castigate the agreement, even before reading it.

Brexit will pitch the world’s fifth largest economy into the unknown. Many fear it will divide the West as it grapples with both the unconventional U.S. presidency of Donald Trump and growing assertiveness from Russia and China.

Supporters of Brexit admit there may be some short-term pain for Britain’s $2.9 trillion economy. Notably, the deal will give Britain’s vast financial center, the biggest source of its export and tax revenue, only a basic level of access to the bloc’s markets after Brexit.

Such an arrangement would give Britain a similar level of access to the EU as major U.S. and Japanese firms, while tying it to many EU finance rules for years to come.

But keen Brexiteers say that, in the long term, Britain will prosper when cut free from the EU – which they cast as a failing German-dominated experiment in European integration.

May gave no date for a vote in parliament but she will need the votes of about 320 of the 650 lawmakers. It is unclear whether she has the numbers.

A senior Eurosceptic lawmaker said the cabinet decision was a majority decision, not a unanimous one.

Asked if anyone had threatened to resign, a senior government official who declined to be named said “nobody”, adding: “The PM used the word ‘impassioned’ for a reason, and clearly there are strongly held views on this subject, which we acknowledge.”

During the cabinet meeting, British journalists said anger among Brexit-supporting Conservative lawmakers was so high that they might call for a vote of no confidence in her leadership. There was no confirmation.

The British Cabinet met on Wednesday to discuss the draft agreement, while in Brussels, ambassadors from the other 27 EU countries gathered to examine the proposal.

Key developments:

  • The British Cabinet has backed the draft deal negotiated between May and the EU.
  • Ahead of the Cabinet meeting, May told lawmakers that the draft deal delivers the Brexit that Britons voted for.
  • The EU’s chief Brexit negotiator, Michel Barnier, struck a cautious note when he said the deal “wasn’t yet finalized.”
  • Northern Ireland’s Democratic Unionist Party, a junior coalition partner in May’s government, threatened to withdraw support over the deal.
  • The brexit withdrawal Agreement has been published (see link above). An special Brexit summit will be organised in the course of this month.

The pound edged higher after the U.K. Cabinet approved a draft Brexit plan, removing a key hurdle to finalize a divorce deal with the European Union.

Sterling struggled to rally even after Prime Minister Theresa May said an impassioned debate led to backing from her top ministers at a lengthy meeting on Wednesday. Brexit negotiators secured a deal on paper in Brussels Tuesday, yet the currency has fluctuated on worries that lawmakers could reject the agreement.

The currency has slumped about 13 percent against the dollar since the U.K. voted to leave the EU in 2016 and has since fluctuated on the twists and turns of the negotiations. Failure to get a deal or Parliament backing this year could see a slump toward $1.20, while approval by lawmakers could drive a rally toward $1.40, according to strategists.

“It took her more than five hours to get agreement from her Cabinet, but there are increasing murmurings of a leadership challenge,” said Jeremy Stretch, head of Group-of-10 currency strategy at Canadian Imperial Bank of Commerce, adding investors appeared to “buy the rumor, sell the fact” after the announcement. Stretch said getting Parliament’s approval would be difficult and he would prefer to sell any rally toward $1.3075.

The pound gained 0.4 percent to $1.3029, after earlier falling to a low of $1.2882.

With just over four months to go before the Brexit deadline, the agreement marks a significant step toward a two-year transition period and trade talks, relieving some of the uncertainty for companies including the banks and investment firms that crowd London’s historic financial center.

Strategists see a sustained rally being conditional on the Brexit text being approved in Parliament. A majority of lawmakers must vote in favor for the deal to pass, and May faces opposition from both within her own Conservative party and the opposition Labour. Anger among Conservatives is “so high” that a call for a confidence vote in May is possible, BBC editor Laura Kuenssberg said on Twitter, citing an unidentified member of the party.

Decisive step made towards concluding Brexit negotiations – Barnier

The European Union (EU) and Britain have made decisive steps to end Brexit negotiations, said the EU’s chief negotiator Michel Barnier Wednesday, sending a clear signal for an upcoming special summit later this month.

“We have reached a crucial stage, an important moment in this extraordinary negotiation,” said Barnier in a press conference conveyed shortly after Britain’s cabinet approved the draft Brexit deal.

The progress is the result of very intensive negotiations stretching back 17 months, said Barnier, adding that “We are at an important moment in this extraordinary negotiation,” he said.

On citizen’s rights, Barnier noted that the draft deal ensures that “those EU citizens who live in the UK and UK citizens who live in the EU will be able to live their lives as before.”

As to the Northern Island border issue, Barnier said the solution for avoiding a hard border between the Republic of Ireland and Northern Ireland meets four key conditions: protecting the Good Friday agreement; preserving the integrity of EU single market and Ireland’s place in it; respecting Britain’s territorial integrity and constitutional order; and preserving Britain-Ireland common travel area.

Compromises reached in the final stages would ensure that there would be no hard border in Ireland, with a “backstop” plan included in the agreement which would place entire Britain into a customs union with the EU, Mr Barnier said.

Talking about the transition period, Barnier admitted that the only thing not specified in the deal is the length of a possible extension to the transition period.

Commenting on the future relationship between Britain and the EU, Barnier said “the United Kingdom will remain our friend, our partner, our ally.”

But “There remains a lot of work to do … I know that the way ahead is still long and perhaps difficult to guarantee an orderly withdrawal, and to build a “durable” future partnership, he said.

Prior to Barnier’s press conference in Brussels, British Prime Minister Theresa May said Wednesday night that the cabinet has given its backing to her Brexit deal.

May delivered her message outside 10 Downing Street after an emergency meeting of her cabinet that overran by more than two hours.

She acknowledged the difficulties facing the government and the country over Brexit, adding: “I firmly believe with my head and my heart that this is a decision that is in the best interests of the whole United Kingdom,” she said.

May said she will make a full statement to the House of Commons on Thursday.

Political observers are now waiting to see if any of her dissenting ministers have quit.

The next 24 hours could also determine whether May could face a vote of no confidence among her Conservative ranks in the House of Commons.

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Samuel Abasi

Samuel Abasi

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