UK Politics: Odds drift on Brexit no deal after cabinet reaches agreement

The EU and UK need to make a deal on Brexit
After Friday's summit, the UK and EU look more likely to reach agreement on Brexit
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Theresa May emerged from her summit on Friday hailing a cabinet agreement on Brexit. But how long will this fragile peace hold? And are there signs that Labour will back a second referendum? Max Liu reports.

"No deal is out to 2/1, a sign perhaps that the UK and EU will reach agreement before next spring's Brexit deadline."

So Theresa May got her way at Chequers. The Prime Minister emerged from Friday's summit at her country retreat in Buckinghamshire claiming that the government has "agreed our collective position for the future of our negotiations with the EU".

Ahead of the summit, there was speculation that ministers could resign at Chequers. On the eve of the meeting, Brexit Secretary David Davis reportedly told the PM that her plan was unworkable, while Boris Johnson hosted Brexiteer ministers at the Foreign Office to discuss their plan. However, for now at least, the Brexiteers in the cabinet are toeing the line.

Following Friday's summit, the European Union's chief negotiator Michel Barnier reacted warmly to the news that the UK now knows what it wants and looks set to pursue a soft Brexit involving a new customs agreement.

Earlier on Friday, a Brexit no deal by April next year traded at evens on Betfair. On Saturday, that had changed, with no deal out to 2/1, a sign perhaps that the two parties should now reach agreement before next spring's Brexit deadline which, incidentally, the UK is now [1.53] to meet.

Will the peace last in the cabinet?

The government white paper will include details of how the UK will match the EU's standards on food and goods. According to the PM, it will lead to "a UK-EU free trade area which establishes a common rule book for industrial goods and agricultural products."

The PM made it clear to cabinet colleagues that anyone who publicly opposes the agreement, by voting against it or writing articles of the kind Johnson published last year criticising her handling of the negotiations, will be sacked. Johnson is said to have criticised May's proposals at Chequers, while Michael Gove says he accepts the need for compromise among Brexiteers and Remainers in the cabinet.

Once the weekend is over, however, and the government prepares to put its Brexit white paper to Parliament, the mood could once again become fractious in the Tory party. Conservative backbenchers, not bound by cabinet rules and with no jobs to lose, can speak out.

Principal among them is Jacob Rees-Mogg, the leader of the influential European Research Group of pro-Brexit Tories. He says he's waiting to see the full details of the government's plan but has warned the PM against crossing her Brexit redlines.

You can bet your bottom centime that, privately, Rees-Mogg is unhappy about what amounts to a soft Brexit and could rally other backbenchers to cause trouble for the PM. But Rees-Mogg is not as a significant a player as was once though. He's no longer Tory members' choice to succeed May and, on Betfair, is behind Gove [6.8] and new market leader Sajid Javid [6.0].

We will see over the next week how fragile this Tory Brexit peace really is.

Where does this leave Labour on Brexit?

Where the new government's new stance on Brexit leaves Labour is difficult to say and opposition MPs have been slow to react so far. Earlier in the week, Unite Union leader and influential supporter of Jeremy Corbyn, Len McCluskey said Unite are "open to the possibility" of a second Brexit referendum.

McCluskey explained that, if his members showed support for a second vote, then Unite would back it. This was interpreted as causing a potential conflict for Corbyn, who has so far rejected pressure from his MPs to back a second referendum. But could it actually be a shrewd way for the Labour leadership to change their stance without alienating Labour voters who voted Leave?

Unite is Labour's biggest donor, so Corbyn has to listen to them. McCluskey thinks it unlikely that the government's EU withdrawal bill will pass Labour's six Brexit tests about jobs and the economy. If so, he says, "Unite will mobilise against the deal." That would mean Labour voting against the deal and the outcome of that could be a second referendum - which is 7/2 to happen by next April - or a general election.

It's also reported that Momentum, the group set up by activists to support Corbyn, could come out in favour of a second referendum. If Momentum and Unite support a second referendum, then the Labour leadership will have to get on board too.

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