Brexit Briefing 68: What Happens Now?

HOC

This week was the one where all the different Brexit roads collided in the shape of the vote on the withdrawal deal negotiated between the UK and the EU and a no confidence vote in the British government. 

The government successfully faced down the no confidence vote, which was originally called by Labour leader Jeremy Corbyn. 

The vote on the EU withdrawal deal however was lost by 230 votes. The size of the defeat demonstrates just how far away the UK still is from having a settled view on how to deal with Brexit.

Yet Brexit is just 10 weeks away. Currently, there is little possibility of the negotiated deal being approved nor does there appear to be a majority in Parliament for any other single potential option.

The loss on the meaningful vote was greater than many imagined, with 118 Conservative MPs voting against the government, together with all the opposition parties. This was despite last minute assurances sought by the British government from the European Commission and the European Council that the backstop is not intended to be a permanent arrangement. 

The size of the loss means that attempts to try to soften the key parts of the agreement in order to get it over the line are likely to be fruitless. The main problem remains the backstop, intended as an insurance policy to ensure there is no border on the island of Ireland. The draft deal envisaged the backstop as a UK wide customs union, along with Northern Ireland aligning to some single market rules. However, the UK cannot leave this arrangement without EU agreement. The customs union is hugely restrictive for non-EU members, excluding them from the benefits of EU trade deals. In addition, given the reality that the EU is unlikely to be convinced that any trade deal can replicate the benefits of the customs union with regards to guaranteeing an open Northern Irish border, the UK is unlikely to ever be able to extricate itself from the backstop without leaving Northern Ireland in the customs union.

The government’s first focus will therefore be to find a way to soften the backstop to such an extent that enough MPs could back it, whilst keeping the EU on board. It appears to be an almost impossible challenge especially as the EU’s response to date has been that the accompanying political declaration (which is not legally binding) can be amended but the backstop is off limits.

If this approach can’t work there are other possibilities available to the government. The Prime Minister already announced, through an address to the nation outside Number 10 on Wednesday night, that the government will work with other parties to try to find a consensus that could be used to go back to Brussels and restart the negotiations.

Juncker

The opposition Labour Party have refused to take part in these talks until the government rules out the UK leaving the EU without a deal. As the government is almost certainly not going to do this publicly, Parliament remains deeply split with few viable options to break the impasse and with even less time.

Next week, government ministers have to report back to the House of Commons to sketch out a possible way forward. They will have to do this every three days. And therein probably lies the path out of this impasse, although it will likely put both the government and the Labour Party into tricky political positions.

Parliament will be able to table amendments to the various Brexit pieces of legislation going through the house and could demand a variety of things, including a pivot to a Norway-style Brexit that includes single market membership and freedom of movement, a second referendum, an extension of article 50, the ruling out of no deal.

It is likely that all these options will be tested for support. What is not clear is whether any of them have a majority in the Parliament. It is also not clear how the government will act in response to any that do pass.

There is clearly greater support for a softer Brexit in Parliament than the one being proposed by the government. However, that opens up many further problems. If the UK does eventually seek membership of the customs union or single market from outside the EU, it will involve ceding far more power to Brussels than it did as an EU member state as the UK would lose all influence in making the laws that govern its economy. In the case of the customs union it is even worse, as the UK would not benefit from EU trade deals for its exports nor would it be able to do its own trade deals, so it would be far less of a global trade player than it is as an EU member state. The opposite of the intentions of many people who voted for leave.

IrishBorder

Breaking free of those policies however leaves the Irish border issue unsolved and therefore will mean that a deal can’t be done with Brussels.

It is for this reason that many Leave leaders now advocate for no deal. It is currently the only option on the table that would grant the UK the greatest freedom from EU rules, meeting the aspirations that many Brexit voters voted for.

However, it would lead to huge problems in the short term, as going from a EU member state one day to a third country with no preferential arrangements the next will utterly change every industry and every part of life in the UK overnight. There is no way any government can properly prepare for it because there is no way to know just how severe the short-term impact would be.

There would be short-term economic turmoil, likely followed very swiftly by political turmoil, particularly in Scotland and Northern Ireland. This is something that no government could control and given that parliament is strongly opposed to this option, it is unlikely that the government would allow that option to happen.

However, time is short. In the next ten weeks the government has a number of options. Either it tries to rally support for the negotiated deal and attempts to find a way to get it through Parliament (which is difficult given the size of the defeat). It could even call another general election to get both popular support for the deal and a majority to get the deal through Parliament. Alternatively it can try to find a cross party consensus. This also looks which impossible though without the engagement of the Labour Party.

It can alternatively wait to be directed by the Parliament and then act on whatever Parliament decides or it can decide that no deal is possible and count down the clock whilst preparing for no deal.

All bar the final option probably mean a delay to the departure date of the 29th March. There is not enough time left to negotiate and ratify a new deal. If the parliament forces the government into a second referendum (possible but again unlikely given the lack of support from Jeremy Corbyn) then the delay could be significant, as a referendum would take a minimum of six months to organise.

A delay to Brexit is the odds-on favourite now. It would likely be only a short delay, until the end of June in order to give the government the time to get its deal through or to negotiate a new approach. Such a timeframe could be made to work as MEPs elected in May's European elections don’t take their seats until the start of July.

However, a delay beyond June becomes very problematic for everyone. The UK would have either to hold European elections in May or find a way to extend the mandate of existing MEPs until Brexit date. That would need significant buy-in from the EU and that might not be forthcoming unless a general election or referendum has been promised.

So if there is not to be a referendum, the UK will almost certainly be out of the EU by the start of July, just how and with what sort of deal remains impossible to predict at this stage. British politics is currently a fast-moving feast and it is entirely possible that everything looks completely different at the end of next week. But as things stand at the moment, we remain no closer to a deal or to a settled British vision for Brexit than we did three years ago.