Rethinking Europe

The UK and Brexit: Approaching the Moment of Truth

There are four scenarios if May’s Brexit deal falls through.

Credit: Prachatai www.flickr.com

Takeaways


  • Seldom has British politics been so fraught. All potential scenarios – a deal, no deal and no Brexit – are still possible.
  • Theresa May has tried to frame the upcoming vote in Parliament as being a choice between a deal or no deal. But this is not the case.
  • The pro-EU/moderate majority in the Conservative Party has the power to frustrate a hard Brexit if it acts early enough.
  • Because a second referendum would risk splitting the Conservative party in two, a majority of Tory MPs remain strongly against it.

Seldom has British politics been so fraught. This coming Sunday, November 25th, 2018, the UK and the EU want to formally agree the Brexit withdrawal agreement and a declaration on their future relations.

Thereafter, the deal will arrive in the UK Parliament for debate and ratification. All potential scenarios – a deal, no deal and no Brexit – are still possible.

The coming weeks are critical

As the Brexit legislation is brought to the House of Commons and debated, a lot of the public’s attention will be drawn to procedural technicalities and their implications. Because the UK has no codified constitution, and instead relies on a collection of key documents and precedents, the scope for different interpretations of the rules can be wide – even among constitutional experts.

The patchwork nature of the UK system means some procedures can be complicated and arcane. This can be disorientating. However, there is one significant upside. More than that of most places, the UK constitutional framework offers significant flexibility.

The ultimate deciding factor could be whether the faction within the Conservative parliamentary party that is either pro-EU or wants a soft Brexit is willing to use all available parliamentary procedures, including the threat of bringing down the government, to prevent a hard Brexit.

Parliament, not government, is sovereign

For a hard-Brexit scenario to materialize, a majority of the House of Commons – which is pro-EU or at least in favour of a soft Brexit – would have to be complicit in it. For that reason, the risk of a hard Brexit is not very high. The more likely outcome is that the path to an eventual deal will be messier than once hoped.

Theresa May has tried to frame the upcoming vote as being a choice between a “deal or no deal.” But this is not the case. Although parliament cannot dictate government policy when it comes to Brexit, the House of Commons will have several opportunities to influence the outcome of Brexit if May’s deal fails on the first pass.

What happens if May’s Brexit deal falls through?

There are four potential scenarios if Theresa May does not manage to get her deal through Parliament.

1. The UK stumbles into a hard Brexit

It is conceivable that Theresa May’s government stays in office, but does not obtain a majority to enact any necessary Brexit legislation. This would be a very unusual situation in British politics, which places a lot of weight on strong government.

However, it is not impossible. It would happen if hardline Remainers and moderates in the Conservative Party (plus the DUP) worked together to keep the government in power, but did not provide the necessary majority to pass other Brexit-related legislation, including to manage a hard Brexit.

Such a situation of intractable parliamentary gridlock is the worst-case scenario. Amid a constitutional crisis, the UK could end up leaving the EU without a deal.

2. The pro-EU parliamentary majority takes over

The pro-EU/moderate majority in the Conservative Party has the power to frustrate a hard Brexit if it acts early enough. Chances are that, if parliament failed to pass May’s deal, almost all opposition MPs would vote against the government on any of its subsequent Brexit plans. This would strengthen the hand of the pro-EU faction of the Conservative Party.

Just as the hardline Brexiteers can thwart May’s current deal by not backing it in parliament, the Remainers would have the chance to thwart a hard Brexit by voting against the government in motions of confidence unless the government took steps to avoid a hard Brexit.

Given that we will know by January 21, 2019 or shortly thereafter whether the UK may be heading for a hard Brexit, pro-EU Conservatives will have around 10 weeks to force the government to seek out terms with the EU to prevent a hard Brexit, or else bring down the May government.

This could involve the UK materially softening its position with respect to future UK-EU trade – i.e., full membership of the customs union for the whole UK – a position which a cross-party majority in Parliament would probably support.

3. Conservatives go for a second referendum

Although there is some momentum behind the idea of a second referendum within the Conservative ranks, it remains an unlikely scenario. The divisions within the Conservative Party on the European question run deep.

Because a second referendum would risk splitting the party in two, a majority of Tory MPs remain strongly against it. In would take an extreme scenario before a significant number, let alone a majority, of Tories were to see a second referendum as a viable way out.

Even then, some hardline Brexiteers – determined to drive the UK to a hard Brexit – may still be able to obstruct parliament in backing a second vote.

Most opposition MPs, upon recognizing the Conservatives’ fate, would probably not back a second referendum but demand early elections first which may then be followed by a second referendum.

The most likely scenario for a second referendum would be following snap elections that ended in a Labour-led coalition with the very pro-EU Liberal Democrats or Scottish National Party (SNP).

4. Fresh elections

Snap elections would further raise the level of uncertainty. Currently, the Conservatives and Labour are roughly neck and neck in the polls. Chances are that Labour as well as the Liberal Democrats and UKIP would gain support if the Conservative government fell apart.

A Labour government or a Labour-led coalition would go for a softer Brexit. If Labour won an outright majority, its leaders would probably sign the whole of the UK up to the customs union, with the promise of full regulatory alignment in goods.

If they had to rely on the strongly pro-EU Liberal Democrats or SNP for a working majority, either party would likely try to force Labour to either soften its stance to a Norway-style agreement with the EU (goods and services) or go for a second referendum.

If a general election was called before Brexit happened, we would expect a cross-party effort by pro-EU MPs to strike some deal with the EU to avoid a hard Brexit.

It is not obvious how this would happen. Without any clarity about what the UK would sign up to, the EU may find it difficult to agree some mechanism to prevent a hard Brexit simply to give the UK more time to sort out its affairs.

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About Kallum Pickering

Kallum Pickering is senior UK economist at Berenberg Bank in London.

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