May Caves, Offers Brexit-Deal Concessions Following Dramatic Commons Defeats

After being effectively frozen in place since Prime Minister Theresa May survived a Tory no confidence vote late last year, the dynamics of the debate in Parliament are finally beginning to shift now that MPs have taken steps to seize control of the process from No. 10 Downing Street.

In a series of embarrassing defeats for May's government earlier this week, MPs voted to limit the government's ability to use the threat of a 'no deal' Brexit as a cudgel to coerce MPs into backing May's deal, while the "Grieve Amendment" (sponsored by Tory MP and former Attorney General Dominic Grieve), passed on Wednesday, requires May to call a vote on a "Plan B" Brexit deal within three days should she lose a vote next week on her deal.

May

With her back against the wall as the debate on her Brexit plan enters a second day, it appears May has finally relented on her insistence that she would not yield to demands to change her deal, even as her Parliamentary archnemsis Jeremy Corbyn appeared to back away from threats to take down her government.

While Corbyn said during a speech on Thursday that he wouldn't table a motion of no confidence in May's government (which, if successful, would clear the way for a general election that would inject a fresh helping of chaos into the process) if the vote should fail, offering May some more room to maneuver, the Financial Times reported that the prime minister has put forward a "package" of concessions including granting Parliament power over whether the Irish backstop is triggered, implementing requirements to conclude a future UK-EU trade deal within one year should the backstop take effect, and offering a slate of 'workers rights' reforms and promising to work with the EU, according to the Financial Times.

May would also be required to obtain "further assurances" from the EU that the backstop will likely never take effect.

Still, as the FT pointed out, it's unlikely that these concessions will win enough support to pass May's deal on the first go-round.

The workers rights concessions were swiftly rejected as an obvious ploy to win over Labour votes when Corbyn delivered a major Brexit speech on Thursday speech, the Guardian reported. And union officials also warned Labour MPs not to take the bait. The Labour leader also downplayed a comment by his shadow Brexit secretary who said a delayed Brexit was no almost inevitable.

If May has one thing going for her, it's that MPs haven't formed a consensus on an alternative to her plan. Which means that May's plan to pressure the EU into offering more concrete last-minute concessions must succeed if the prime minister wants to make sure that 'Brexit Day' means 'Brexit Day' - and that the UK's exit isn't delayed, which now appears more likely than a 'no deal' exit thanks to the votes this week (though a 'no deal' exit hasn't been explicitly ruled out).

Whatever happens, both professional Wall Street analysts and armchair amateurs concede that what transpires between Thursday and Brexit Day is anybody's guess. 

According to a research note from HSBC, bettors online have no clue what the outcome of the process might be...

Bookies

...Though odds on online betting market PredictIt put the odds of May's deal passing during the first go-round at just 3%.

Odds

If there is a consensus to be found, it's that May might end up losing next week's vote by a margin of well over 100 votes, according to a breakdown from HSBC.

Brexit

In what sounds like a doomed gambit, May is planning one final round of appeals to the EU ahead of the 'meaningful vote' on her Brexit deal, which is set for Tuesday. In a sign that the EU has softened its position somewhat, the FT reported that the EU would allow the concessions on the backstop, which we explained above, because they wouldn't alter the UK's treaty obligations.

And while she has certainly ceded some control over the process, May's fundamental strategy remains intact: Hope that the EU will relent and offer last-minute concessions after the deal is defeated - assuming May can hang on to power long enough to push through a vote on the second go-round.

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