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Brexit Deal in Crisis After 2 U.K. Cabinet Ministers Quit

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LONDON — Prime Minister Theresa May of Britain faced a deep political crisis on Thursday after two cabinet ministers quit her government, including Dominic Raab, her chief negotiator on withdrawal from the European Union — decisions that threaten to wreck not only her plans for the exit but also her leadership.

The surprise resignation of Mr. Raab on Thursday morning followed a tense, five-hour meeting of the cabinet the previous day, during which ministers reluctantly agreed to sign off on Mrs. May’s draft plans for departure from the European Union, a process commonly known as Brexit.

Mr. Raab’s departure was not only unexpected but also deeply damaging to Mrs. May’s authority, increasing the risk that she might face a leadership challenge from rebel lawmakers inside her own Conservative Party.

Shortly after his announcement, Esther McVey, the work and pensions secretary, resigned, adding to the turmoil.

At a news conference at the end of the day, Mrs. May, projecting her customary confidence, insisted that she was not worried about the prospects for the deal or her own political fortunes.

“Leadership is about taking the right decisions, not the easy ones,” she said. “Am I going to see this through? Yes.”

The pound, an indicator of stability amid the Brexit debate, fell sharply on the news that Mr. Raab had resigned and dropped again when the pensions minister stepped down. The currency, which was worth close to $1.30 before Mr. Raab’s resignation, dipped as low as $1.2753 by mid-morning and continued to have an unsteady day.

After sliding in the minutes before Mrs. May started her speech, the currency rose to $1.2786 as she talked.

The crisis is a grave one for Mrs. May, who knew even before the resignations that she would struggle to win Parliamentary approval for her draft agreement. She addressed the House of Commons on Thursday morning to sell her deal and for nearly three hours took questions on the deal, nearly all of them ranging from skeptical to outright hostile.

“What we agreed yesterday was not the final deal,” she said. “It is a draft treaty that means that we will leave the E.U. in a smooth and orderly way on the 29th of March, 2019, and which sets the framework for a future relationship that delivers in our national interest.”

An investment manager watching Mrs. May speak to the House of Commons. The pound dropped as much as 1.5 percent against the dollar on Thursday.  Credit Simon Dawson/Reuters

She added that the deal “delivers in ways that many said could simply not be done.” It would put in place a transitional relationship with the European Union through the end of 2020, while a permanent arrangement is negotiated, but the transition period could be extended.

Jeremy Corbyn, the Labour Party leader, called Mrs. May’s agreement “a leap in the dark, an ill-defined deal by a never-defined date.” The continued uncertainty about Britain’s relationship with Europe, lasting at least another two years and possibly much longer, will accelerate the exodus of businesses and investment that is already underway, he said.

“Parliament cannot, and I believe will not,” accept the arrangement, he added.

That view was echoed by Ian Blackford, a lawmaker from the Scottish National Party, who said the prime minister was “trying to sell us a deal that is already dead in the water.”

Reflecting the cool response to Mrs. May’s plan and the talk of a leadership challenge, Laura Kuenssberg, the political editor of the BBC, asked at the prime minister’s news conference, “Is it not the case now that you are in office, but you’re not really in power?” Mrs. May did not answer directly, sticking firmly to her talking points about the deal and declining to dwell on the politics around it.

The lack of support for the agreement from lawmakers in both major parties had kept the pound down. “What we need to see is ministers who have not resigned come out and back the deal,” said Jordan Rochester, a foreign exchange strategist at Nomura Securities. “It’s not the P.R. campaign we’ve expected.”

Still, the lack of clarity kept the pound from collapsing, Mr. Rochester said, though calls for a vote of no confidence in Mrs. May did not help. Despite a series of negative headlines through the day, he noted, the pound did not continue to fall.

“There is a buyer out there,” he said. “It’s guys thinking, ‘It’s bad now, but it increases the chance of remain.’ ”

European Union officials lay low on Thursday, declining to comment on the drama across the English Channel, or to speculate about what would happen if Mrs. May were ousted or if Parliament rejected the deal. But speaking on the condition of anonymity, they said the union had gone a long way to satisfy the prime minister’s demands that there be no hard border between Ireland and Northern Ireland, and that Britain continue to have frictionless trade with the bloc.

Negotiators “think it is the best we can do collectively with the constraints that we have on both sides,” one official said.

Mrs. May made much the same point: “Nobody has any alternative proposal that both delivers on the referendum and ensures there is no hard border between Northern Ireland and Ireland.”

Dominic Raab’s resignation increases the risk that Mrs. May might face a leadership challenge.CreditAndy Rain/EPA, via Shutterstock

Although a hard-line supporter of Brexit, Mr. Raab had been a core member of the cabinet, and his presence had reassured other hard-line lawmakers. He served as Brexit secretary for barely four months, succeeding David Davis, who also resigned, because he felt that Mrs. May was not taking a hard enough line in negotiations.

In his letter of resignation, Mr. Raab said that he could not “reconcile the terms of the proposed deal with the promises we made.”

Dominic Raab@DominicRaab

Today, I have resigned as Brexit Secretary. I cannot in good conscience support the terms proposed for our deal with the EU. Here is my letter to the PM explaining my reasons, and my enduring respect for her.

Ms. McVey’s departure, though damaging, was less of a surprise.

View image on TwitterView image on Twitter

Esther McVey@EstherMcVey1

Earlier this morning I informed the Prime Minister I was resigning from her Cabinet

Another cabinet minister, Penny Mordaunt, the international development secretary, was also reportedly reconsidering her position after a cabinet debate on Wednesday that Mrs. May described, diplomatically, as “impassioned.” As many as 10 cabinet ministers were reported to have voiced reservations.

Iain Duncan Smith, a leading Conservative supporter of Brexit and former party leader, told the BBC that the effect of Mr. Raab’s resignation would be “devastating,” because it suggested that the Brexit secretary’s concerns had been ignored, despite his pivotal position in government and in withdrawal negotiations.

Such is the unhappiness from around the party at Mrs. May’s draft deal that the calculation of those who want to oust her might change.

It would take written requests from 48 Conservative lawmakers to secure a vote of no confidence in Mrs. May. Though the hard-line pro-Brexit faction has that number, it has held back so far because it does not believe that it has enough support to topple her.

To oust her as prime minister would require a majority of Conservative lawmakers — at least 158 — voting to force her out.

On the floor of Parliament on Thursday, Mrs. May faced a torrent of criticism, much of it from members of her own party. One Conservative lawmaker, Julian Lewis, described her deal with Europe as “a ‘Hotel California’ Brexit deal which ensures that we can never truly leave the E.U.”

Mr. Rees-Mogg, the Conservative Brexit hard-liner, said that the prime minister’s promises and actions “no longer match,” and asked why he should not join those demanding a vote of no confidence. He later confirmed that he had done just that.

Britons voted to quit the European Union in a 2016 referendum, but since then the Conservatives have been split between those who want to keep some close economic ties to the bloc, to protect the economy, and others who want a cleaner break.

An abandoned customs post on the border between Ireland and Northern Ireland. The border is probably the toughest challenge in Britain’s withdrawal from the European Union.CreditAndrew Testa for The New York Times
An abandoned customs post on the border between Ireland and Northern Ireland. The border is probably the toughest challenge in Britain’s withdrawal from the European Union.Credit Andrew Testa for The New York Times

Worryingly for Mrs. May, many of her enemies, on both the right and the left, are converging around the view that the compromise she has carefully forged is the worst of both worlds, leaving Britain without a voice in the European Union but still subject to many of its trade rules. Several leading Brexit supporters have characterized the draft deal as worse than membership in the bloc they find so objectionable.

The focus of the discord has been around plans to ensure that, whatever happens in future trade talks, there should be no physical checks at the border between Northern Ireland, which is part of the United Kingdom, and Ireland, which is a member of the European Union.

Under the so-called backstop plan that is part of the draft deal, the whole of the United Kingdom would remain in a customs union with the European Union until future trade plans that negate the need for border checks are worked out.

But Northern Ireland would be subject to more of the European Union’s regulatory processes than the rest of the country, a fact that Mr. Raab said “presents a very real threat to the integrity of the United Kingdom.”

He also objected to the fact that Britain could not unilaterally leave the backstop, a move that would clear a path to exit a customs union and pursue trade deals with other countries.

One of Mr. Raab’s under secretaries for Brexit, Suella Braverman, also stepped down on Thursday. Their departure had been preceded on Thursday morning by the resignation of Shailesh Vara, a junior Northern Ireland minister.

View image on Twitter

Shailesh Vara MP@ShaileshVara

With much sadness and regret I have submitted my letter of resignation as a Northern Ireland Minister to the Prime Minister. A copy of my letter is attached.
It has been a joy and privilege to serve in the Northern Ireland Office and I will always cherish the fondest memories.

Speaking at a news conference in Brussels shortly before Mr. Raab’s announcement, Michel Barnier, the top European Union negotiator, and Donald Tusk, the president of the European Council, said they would call a summit meeting for Nov. 25, where leaders of the bloc’s member states could endorse the deal.

Mr. Tusk said that the accord approved by the British cabinet meets two crucial objectives: It limits the damage Brexit would cause, and it protects the vital interests of the 27 remaining members states and the European Union as a whole.

“We have always said Brexit is a lose-lose situation and these negotiations were always about damage control,” he said.

Mr. Barnier said that the coming days, when the focus will be on finalizing a political declaration outlining the future relationship between Britain and the European Union, would be “intense,” adding that “we have no time to lose.” Brexit is scheduled to take effect on March 29.

However, European Union officials have made it clear that they were scheduling the summit meeting on the assumption that turbulence in Mrs. May’s party would not paralyze or overwhelm her government.

Follow Stephen Castle on Twitter: @_StephenCastle.

Reporting was contributed by Michael Wolgelenter, Amie Tsang and Richard Pérez-Peña from London, and Steven Erlanger from Brussels.

Source: https://www.nytimes.com/2018/11/15/world/europe/uk-brexit-theresa-may.html