British Prime Minister Theresa May has survived a bid to topple her government, but she is a long way from resolving the impasse over Brexit that has left the country in crisis. And she has only a few days to find a solution.
On Wednesday, the government won a vote of no confidence in the House of Commons by a margin of 325 to 306. The result handed Ms. May a crucial parliamentary victory just 24 hours after a humiliating defeat, when an overwhelming number of Members of Parliament rejected her Brexit deal with the European Union. That has thrown the Brexit process into chaos and raised the real prospect the United Kingdom will leave the EU on March 29 without any arrangements for trade, border controls, financial services and a host of other issues.
Ms. May has until Monday to present a new Brexit plan to Parliament, and she vowed on Wednesday to work with MPs from all parties to move forward. “We must find solutions that are negotiable and command sufficient support in this house,” she told MPs after the confidence vote.
Labour Party Leader Jeremy Corbyn said Ms. May has botched Brexit, and called on her to rule out trying to leave the EU without a deal, as some of her Conservative Party colleagues have proposed. “The government must remove, clearly, the prospect of the catastrophe of a no-deal Brexit from the EU and all the chaos that would come as a result of that,” Mr. Corbyn told MPs on Wednesday. He also plans to keep challenging the government with confidence motions.
Just how far Ms. May and the MPs will get is far from clear. Factions of MPs have already begun pushing their own competing options, including another referendum on Brexit, delaying departure from the EU, or cancelling Brexit. On Wednesday, 71 Labour MPs called for a referendum, while 22 Tory MPs proposed pulling out of the EU completely on March 29 and negotiating a trade deal. Ms. May has also insisted she will not consider keeping the U.K. within the EU’s customs union, which allows the free movement of goods, and is something Mr. Corbyn supports. She argued that remaining in the customs union would prevent the U.K. from signing trade deals with other countries because the government would have to abide by EU rules that require all members to have the same external tariffs. But Mr. Corbyn believes staying in the customs union would protect jobs and help U.K. businesses.
In Brussels, the EU’s Brexit negotiator, Michel Barnier, said the withdrawal agreement MPs turned down was the only option and cannot be renegotiated. “The agreement that we reached with the British government is a good agreement. It is the best possible compromise,” Mr. Barnier said.
The turmoil has rattled British businesses and convinced many people the U.K. government will have to extend the March 29 deadline. The EU would have to agree, and there have been reports officials are considering proposing a year-long delay. That’s largely because the EU will be tied up with elections to the European Parliament in May, followed by a selection of a new EU executive.
“As things stand, it seems more likely than ever that the leaving date will be delayed,” said Dean Turner, U.K. economist at UBS Global Wealth Management. “All the other options, including a renegotiation of the deal toward a softer, Norway-type arrangement, a general election, or a second referendum will unquestionably require a delay to the 29 March leaving date.”
Ms. May hinted at a delay on Wednesday. During a debate in the House of Commons, she told MPs the EU would agree to an extension if officials saw progress in her talks with MPs on a new deal.
As the uncertainty escalated, business leaders lashed out over the political chaos. “It is the collective failure of our political leaders that, with only a few weeks to go, we are staring down the barrel of no deal,” said Stephen Martin, director-general of the Institute of Directors, a business group with 30,000 members. Added Adam Marshall, director-general of the British Chambers of Commerce: “There are no more words to describe the frustration, impatience, and growing anger amongst business after two and a half years on a high-stakes political roller coaster ride that shows no sign of stopping.”
Many companies have been stockpiling supplies for months in preparation for possible shortages and border delays. Car makers BMW and Honda have also announced plans to close their plants in April for a short period to assess the fallout from Brexit. And on Wednesday, the British International Freight Association, which represents hundreds of U.K. companies, told its members to prepare for a no-deal Brexit.
“For business, the prospect of significant disruption certainly looms,” said Alex de Ruyter, director of the Centre for Brexit Studies at Birmingham City University. Mr. de Ruyter said the centre had been tracking the auto industry and its approach to Brexit. Most companies “were unwilling to spend any money on Brexit unless they absolutely had to,” he said. “For a lot of them, the notion that a no deal could even be in the cards was unthinkable. So a lot, of course, are panicking now.”
He believes it will be impossible for Ms. May to come up with a deal that will win parliamentary approval because opponents have dug in. Instead, he said, she may be forced to delay Brexit and hold a referendum. “I think it’s the only way out for [Ms. May], because there is no majority in Parliament for any kind of permutation that could emerge out of this.”