UK steps up preparations for 'no-deal' Brexit scenario

Prospect grows even as Labour faces refusal over bid for no-confidence motion in PM May

LONDON • British ministers met yesterday to intensify plans for leaving the European Union without a deal - a prospect that is becoming more likely as Prime Minister Theresa May plays for time with just 100 days to go until Brexit.

The opposition Labour Party, meanwhile, faced refusal over its request for a no-confidence motion in Mrs May and growing pressure to table a binding vote against the government.

Mrs May on Monday said the government was preparing for a "no-deal" Brexit and "the Cabinet will be discussing the next phase in ensuring we are ready for that scenario". She will be refereeing between ministers who want the government to step up preparations for a no-deal scenario and those who want Parliament to have a final say in a series of votes on potential options for Brexit.

One option is the Prime Minister's own Brexit deal, but that is hanging by a thread after she was forced to pull a vote on it last week in the face of huge opposition from within her Conservative Party.

Opposition leader Jeremy Corbyn on Monday tabled a non-binding no-confidence vote in Mrs May after she told MPs they will get another chance to vote on her deal in the week beginning Jan 14.

"This House has no confidence in the Prime Minister due to her failure to allow the House of Commons to have a meaningful vote," Mr Corbyn told lawmakers ahead of tabling the motion in Parliament.

But Downing Street was reported yesterday to be blocking the motion from being debated. "We won't allow time for what is a stunt," Britain's Press Association quoted Downing Street as saying.

If Parliament fails to approve the text of PM May's deal, Britain could crash out of the EU with no deal - a prospect that experts warn could lead to serious trade disruption and trigger a financial crisis.

Labour had the option of tabling a binding motion but faced defeat after Conservative Brexit hardliners and the Democratic Unionist Party, which props up the government, both said they would back Mrs May.

Even a non-binding vote of no-confidence from a majority in the House of Commons could leave Mrs May's authority further weakened - and potentially prompt another vote in her entire government and a general election.

Britain is set to leave the EU on March 29 next year, but after 18 months of tortuous negotiations appears no closer to formalising a divorce deal. If Parliament fails to approve the text of her deal, Britain could crash out of the EU with no deal - a prospect that experts warn could lead to serious trade disruption and trigger a financial crisis.

International Development Secretary Penny Mordaunt told reporters yesterday: "It's absolutely right that we step up 'no-deal' planning now. Not only do we need to prepare the country, but it's also the best way that we will ensure that we get a deal."

The delay on the vote has angered members of Mrs May's own party and Labour opposition politicians, who accused her of trying to "run down the clock" ahead of Britain's withdrawal to increase pressure on them to back the deal.

Mrs May is also facing calls for a second referendum to resolve the impasse, with dozens of MPs from all sides now supporting another poll and reports that Mrs May's officials are considering the possibility.

But the Prime Minister argued that this would betray the 2016 result and undermine public confidence in politics.

Britain's economy has slowed since the first referendum in 2016 and there is no guarantee that businesses and consumers will retain tariff-free access to European goods after Brexit. The British Chambers of Commerce forecast yesterday that economic growth this year and in 2019 looks set to be the weakest since Britain emerged from recession in 2009, due to a freeze in business investment and weak consumer demand ahead of Brexit.

Mr Mike Amey, head of sterling portfolios at fund management giant Pimco, said there was "low probability" of no-deal as there was currently not a majority of lawmakers who would accept it.

Britain would be more likely to extend or revoke its Article 50 notice to leave the EU, he said.


A version of this article appeared in the print edition of The Straits Times on December 19, 2018, with the headline 'UK steps up preparations for 'no-deal' Brexit scenario'. Print Edition | Subscribe