May’s Brexit plan throws Britain into deepest political turmoil since Suez crisis
● British Prime Minister Theresa May was fighting for survival after a draft divorce deal with the EU provoked the resignations of senior ministers and mutiny in her party.
More than two years after the UK voted to leave the EU, it is still unclear how, on what terms or even if it will leave the EU as planned on March 29 2019.
May, who won the top job in the turmoil that followed the 2016 referendum, has sought to negotiate a Brexit deal that ensures that the UK leaves in the smoothest way possible. But Brexit minister Dominic Raab resigned on Thursday over her proposed deal, sending the pound tumbling.
Mutinous MPs in her own party openly sought to challenge her leadership and bluntly told her the Brexit deal would not pass parliament.
Sterling, which has see-sawed on Brexit news since the referendum, was trading flat at $1.2783 on Friday, but down almost 3c since a deal was struck on Tuesday. This came after an almost 2% drop in currency markets on Thursday when shares of banks, builders and utilities tumbled 5% or more.
“The assumption that a Brexit deal will be reached and ratified by all sides has now been called into question,” wrote Lena Komileva, an economist in London at G+ Economics. “For a deal to happen, the threat of a no deal has to become realistic, causing serious financial disruption, and a possible business and consumer confiBy dence shock.”
Markets may take temporary solace in the leadership of May: sterling steadied during her defiant press conference on Thursday. If she can hold on to the leadership of the Conservative Party, that may lift its fortunes, at least for a while.
But if MPs reject the deal, the currency vigilantes may re-emerge en masse over the low-liquidity Christmas period, ratcheting up pressure on a divided parliament.
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 US presidency of Donald Trump and growing assertiveness from Russia and China.
Amid the deepest political turmoil since the Suez Canal crisis in 1956, the ultimate outcome remains uncertain.
Scenarios include May’s deal ultimately winning approval; May losing her job; Britain leaving the bloc with no agreement; or even another referendum.
To leave the EU on the terms of her deal, May would need to get the backing of about 320 of parliament’s 650 MPs. The deal is due to be discussed at an EU summit on November 25.
Some Conservative MPs have said they have submitted letters of no confidence. When 48 letters are submitted to the party’s so-called 1922 committee, May will face a leadership challenge.
Politicians, officials and diplomats in London openly questioned how long May had left as speculation swirled around London that a leadership challenge could come soon.
If a confidence vote is called among her MPs, May would need a simple majority of the total votes in order to win.
By seeking to preserve the closest possible ties with the EU, May has upset her party’s many advocates of a clean break, and Northern Ireland’s Democratic Unionist Party (DUP), which props up her minority government.
The Daily Telegraph reported that the DUP had demanded May be replaced as prime minister.
The EU and Britain need an agreement to keep trade flowing between the world’s biggest trading bloc and the UK, home to the biggest international financial centre.
May said she felt the threat of a no deal Brexit personally as she was Type 1 diabetic: “I depend on insulin every day. My insulin is produced by a country elsewhere in the European Union.”
British aero-engine maker Rolls-Royce said it was continuing with its contingency plans. The plans include “buffer stocks so that we have all the logistical capacity that we need to carry on running our business”, said CEO Warren East.
Supporters of Brexit say that though the divorce might bring some short-term instability, in the longer term it will allow the UK to thrive.
Meanwhile, proponents of closer relations with the EU in May’s own party and the Labour opposition say the deal squanders the advantages of membership for little gain.