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EU withdrawal bill debate postponed as Brexit talks hit buffers

David Davis and Michel Barnier
David Davis, the UK’s Brexit secretary, and Michel Barnier, the EU’s chief negotiator, give an update on the progress of negotiations in Brussels. Photograph: Emmanuel Dunand/AFP/Getty Images

Ministers have been forced to postpone next week’s debate on the EU withdrawal bill on a chaotic day that saw Michel Barnier warn of a “disturbing deadlock” in the divorce talks in Brussels and a growing whispering campaign against the chancellor in Westminster.

Andrea Leadsom, the leader of the House of Commons, told MPs the key piece of Brexit legislation would not be debated next week, as they had planned, as the government struggles to respond to a deluge of hostile amendments.

Labour said it had identified more than a dozen of the 300 amendments that already have the backing of seven or more Tory MPs, theoretically enough to defeat the government.

The growing scale of the parliamentary discontent underlines the challenge facing Theresa May, on a day in which the UK’s divorce talks were overshadowed by a series of developments:

  • Sterling fell sharply against the euro on the currency markets on Thursday lunchtime when Barnier, the EU’s chief negotiator, gave a sombre assessment of the status quo.
  • Philip Hammond came under fresh attack from pro-Brexit Conservatives for what some regard as his pessimistic outlook, with former chancellor Lord Lawson calling on him to be reshuffled out of his job.
  • Christine Lagarde, the International Monetary Fund’s managing director, said negotiators on both sides had to put the interests of people before those of business because the risks of not reaching a deal were unimaginable.

Labour seized on the disunity in Tory ranks and market uncertainty to say that May would struggle to pass her flagship EU withdrawal bill without making a series of concessions.

“The Tories’ repeal bill is simply not fit for purpose,” said the shadow Brexit secretary, Keir Starmer. “It would give huge and unaccountable power to ministers and puts vital rights and protections at risk. Theresa May must start listening to the legitimate concerns of Labour and some of her own MPs and urgently change approach.”

Barnier made clear that he was not ready to recommend that talks on a future trading relationship begin now, as the UK had hoped.

The main stumbling block continues to be the UK’s refusal to accept the EU’s analysis of what it will owe on leaving the bloc in March 2019. Barnier said at the end of the fifth round of talks that there was no question of him making “concessions”.

“This week, however, the UK repeated that it was still not ready to spell out these commitments,” he said. “On this question, we have received a state of deadlock, which is very disturbing for thousands of project promoters and very disturbing also for taxpayers.”

Nonetheless, David Davis insisted that Theresa May’s Florence speech provided a framework for talks to move on. The Brexit secretary said: “I make no secret of the fact that, to provide certainty, we must talk about the future.”

Estimates on the size of the divorce bill have varied from about €60bn to €100bn (£54bn to £90bn).

The pound rallied in later trading after a leaked draft of the conclusions from next week’s European council meeting, revealed that the EU27 could be prepared to start laying the groundwork for the next phase of talks to begin at the end of the year.

The document, seen by the Guardian, suggests the president of the European council, Donald Tusk, will invite Barnier, and its member states to start drawing up a vision for the future trading relationship and the transition period in order to be ready for December, should sufficient progress have been made by then.

The former chancellor Nigel Lawson called for Hammond to be reshuffled out of his job, telling the BBC’s Daily Politics that Hammond’s insistence he would not authorise spending immediately on preparing for a “no deal” Brexit, and his warning that talks could break down in acrimony, was “very close to sabotage”.

Pro-Rremain backbenchers continue to press privately for the foreign secretary, Boris Johnson, to be sacked. Johnson used a press conference with his Polish counterpart in London on Thursday to urge the EU27 to press ahead to the next stage of negotiations.

“Let’s now get on with it to the next phase. I think that’s what we are saying,” he said. “We are looking for some urgency from our friends and partners and it’s time I think to put a bit of a tiger in the tank and get this thing done.”

Hammond flew to Washington on Thursday for the annual meetings of the IMF, which kicked off with a warning from Lagarde of the risks of Britain leaving the EU without a deal. Lagarde said negotiators had to put the interests of people before those of business and there was a need to end uncertainty.

Asked what she thought would be the impact on Europe of Britain falling back on World Trade Organisation rules, she said: “I just cannot imagine that that will happen because for the people themselves what does it mean? The Europeans who are based in the UK and the British who are residing in the EU. WTO does not provide for such eventualities.

“When I think of the airline industries, the landing rights in various European countries … There is so much that has been brought together between the continent and the UK that it requires a very specific approach that will reduce the uncertainty that is damaging potential.”

The IMF considers a cliff-edge Brexit to be one of the main risks to what Lagarde called a fragile recovery in the global economy.

The Labour leader, Jeremy Corbyn, speaking on a visit to Shipley, in West Yorkshire, condemned the government’s handling of the talks. “The danger is we will get to March 2019 with no deal, we fall out of the EU, we go on to World Trade Organisation rules and there will be threats to a lot of jobs all across Britain,” he said. “I think it is quite shocking. We are now 15 months on since the referendum and the government seems to have reached deadlock at every stage.”

Many Conservative MPs only backed the second reading of the EU (withdrawal) bill earlier this year because the government was clear that it was prepared to make concessions. That could mean ministers signalling their backing for select rebel amendments, or tabling their own.

The amendments on which the government is at risk of defeat cover a range of topics such as limiting the scope of the government’s “Henry VIII” powers, and stopping ministers from switching Brexit day. Some amendments may gather more support by the time the bill reaches its committee stage – the next hurdle, which is expected to involve at least eight days of painstaking debate on the floor of the Commons.

This article titled "EU withdrawal bill debate postponed as Brexit talks hit buffers" was written by Heather Stewart in London and Daniel Boffey and Jennifer Rankin in Brussels, for The Guardian on Thursday 12 October 2017 07.59pm


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