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