Theresa May will lose crucial Brexit vote, Mandelson says

  • Theresa May is fighting to get her draft agreement with the European Union ratified by U.K. lawmakers.
  • The U.K. parliament has already voted to take control over Brexit should May’s deal be struck down.
  • Peter Mandelson, a former European commissioner for trade, has told CNBC that May's deal looks doomed.

The architect of Tony Blair's Labour government and former European trade commissioner has told CNBC that the only Brexit plan agreed with Europe cannot succeed.

Current U.K. leader Theresa May has agreed terms of withdrawal with the European Union (EU) as well as an outline of what the future relationship between the trading bloc and Britain will look like. Her draft deal will now be debated before a parliamentary vote set to take place on December 11.

The former lead strategist of Blair's government, Peter Mandelson, told CNBC's Geoff Cutmore on Wednesday that lawmakers had already flagged that May's plan is doomed to fail.

"I think votes in the House of Commons have clearly indicated that May is heading for a serious defeat next Tuesday," said Mandelson who now acts as chairman of Global Counsel.

May's team suffered a brutal day in the Commons on Tuesday, losing a major defeat on what happens if lawmakers do reject the plan provisionally agreed with Europe. On the same day, and for the first time in history, the government was also found to be in contempt of parliament for failing to release full legal advice related to Brexit.

As a result, pound sterling fell below the $1.27 mark for the first time since the end of October.

Mandelson, who acted as the European Commissioner for Trade between 2004 and 2008, described May's deal as "rotten" and said the U.K. government had failed to be honest with British people about the realism of leaving Europe.

"What we have discovered is that Britain cannot leave and secure trade with Europe, and take control of borders, money and law."

Further damning the efforts of May's team, Mandelson added that the British government's "stunning naivety" in negotiations with Europe had triggered opposition from U.K. lawmakers on either side of the Brexit divide.

"They always pretended we could have our cake and eat it. It was always a nonsense from beginning," he said.

Services slump

Brexit fear appears to be taking its toll on activity in the U.K.'s crucial services sector.

Data released Wednesday unveiled an unexpected deterioration as the Markit services PMI figure dropped to 50.4 for November. That is the weakest reading since July 2016, immediately after the Brexit vote.

"A sharp deterioration in service sector growth leaves the economy flat-lining in November as Brexit concerns intensified," Chris Williamson, IHS Markit's chief economist, said in an accompanying statement.

Markit has estimated that their data are consistent with a 0.1 percent expansion of U.K. GDP (gross domestic product) during the fourth quarter.