(Bloomberg) -- The opposition Labour Party called on the government to put any Brexit deal to a referendum and said it would campaign to stay in the European Union rather than accept an agreement brokered by the Conservatives or a no-deal exit. Meanwhile, members of Parliament from both parties are maneuvering to prevent the next prime minister forcing a no-deal split.
Key Developments:
- Labour backs a new referendum on any exit deal, and would campaign to stay in EU rather than leave on terms negotiated by the Tories
- Parliament will debate an amendment that aims to stop the next PM suspending the legislature to push through no-deal
- Pound nears two-year low after economists predicted the U.K. economy will contract 0.1% in the second quarter
- Leadership rivals Boris Johnson and Jeremy Hunt go head to head in debate at 8 p.m.
Parliament to Vote on Move to Stop No-Deal (12:45 p.m.)
MPs in the House of Commons will debate an amendment to the Northern Ireland Bill to require parliament to sit between October and December in a move intended to stop the new prime minister from suspending the House of Commons to force through a no-deal Brexit.
The amendment, being proposed by pro-EU Tory lawmaker Dominic Grieve, was selected for debate and will be voted on by MPs on Tuesday evening.
An additional clause from Grieve which would have required the Queen to recall Parliament if it had been suspended hasn’t been selected for debate.
Labour to Back Remain vs. No-Deal, Tory Deal (11:25 a.m.)
Jeremy Corbyn challenged the next prime minister to put their Brexit deal to a second referendum, and said Labour will campaign to remain in the EU in a vote on a no-deal exit or Conservative Brexit that doesn’t protect jobs or the economy.
The announcement follows a meeting of the shadow cabinet to agree on a settled Brexit position. Pressure has been building on the party leadership to shift its position, with the majority of grassroots members in favor of staying in the EU. The major trade unions that fund Labour and help set its policy agreed to back a second referendum on Tuesday.
In a letter to Labour Party members, Corbyn repeated his preference for a general election “to end austerity and rebuild our country for the many not the few.”
There is no explicit mention in Corbyn’s letter about Labour’s plan for dealing with Brexit if it wins a snap election before the U.K. leaves the bloc, but he offered a hint when he referred to the party’s attempt to reach a deal with Prime Minister Theresa May.
“Labour set out a compromise plan to try to bring the country together based around a customs union, a strong single-market relationship and protection of environmental regulations and rights at work,” he wrote. “We continue to believe this is a sensible alternative that could bring the country together.”
EU Moves to Make No-Deal More Palatable (11:15 a.m.)
The European Union has taken a further step to make a potential no-deal Brexit more palatable by rubber stamping a plan to continue funding projects in Britain signed before the U.K. leaves the bloc. It would be contingent on the U.K. continuing to pay its contribution to the EU’s 2019 budget.
Finance ministers meeting in Brussels signed off on the plan to prevent a sudden break in EU-funded programs in areas such as agriculture and research.
Much uncertainty surrounds what would happen if the U.K. leaves without a deal, and Tuesday’s decision is “without prejudice to an agreement to be negotiated in a no-deal scenario on a financial settlement between the EU and the U.K., which would have to cover the entirety of mutual obligations resulting from the U.K.’s EU membership,” the EU said.
Ireland Accepts Need for Border Checks in No-Deal (Correct)
Ireland has accepted the need to set up checks with Northern Ireland in a no-deal Brexit scenario, people familiar with the matter said.
The government accept that checks, especially on livestock, will be required if the U.K. crashes out of the European Union, the people said, asking not to be identified because the plans haven’t yet been discussed with cabinet. The location of any checks is still to be determined, one of the people said.
Bloomberg earlier reported that the government would accept that checks would have to be at or close to the border. A spokesman for Foreign Affairs Minister Simon Coveney said that was “incorrect.” Updated contingency plans will be published in full later Tuesday, after the cabinet has had its discussion, the spokesman said.
Tory Rivals ‘Underestimate’ Chances of No-Deal (8:50 a.m.)
Boris Johnson and Jeremy Hunt risk underestimating the chances of a no-deal Brexit, while the European Union shouldn’t rely on Parliament stopping it, according to former Conservative Party leader William Hague.
“It’s going to be a very close run thing whether it can do so,’’ Hague said on BBC radio on Tuesday.
Hague, who is backing Hunt to be prime minister, also said Britain shouldn’t tie itself to the specific Brexit date of Oct. 31, as it may need more time for negotiations with the bloc.
Earlier:
Anti-Brexit Tory Tries to Stop Next PM Suspending ParliamentThe Tory Rivals Jockeying to Become Britain’s Next ChancellorU.K. Economy Probably Shrank for First Time in Seven YearsU.K. Businesses See Damage From Post-Brexit Immigration Plans
(An earlier version corrected a story on Irish border.)