Much Ado About Everything No 27: Brexit — The week ahead

The next seven days look to be genuinely critical for Brexit but may not be decisive.

“What happens next? Anyone who tells you they know is lying.”

Anonymous UK cabinet minister quoted on the BBC News website, 7 March 2019.

We are now just three weeks from the expiry date of the UK’s Article 50 notification — and almost three years after the UK voted by a narrow majority to leave the European Union — with a genuinely critical week coming up in the Westminster parliament. And yet we still have no real idea what will happen come 29 March. So, if you are hoping that this article to offer a firm (and bankable) prediction, you are going to be disappointed. Rather, it is simply aimed at offering a short and relatively straightforward guide to what is due to happen in the coming seven days.

  • 8-10 March: The UK, with the Attorney General Geoffrey Cox taking the lead, and the EU have been locked in talks all week over the thorny issue of the Irish backstop. As things stand, we seem to be no closer to an agreement which would win majority support in Westminster when Prime Minister Theresa May’s deal is put to the vote again on Tuesday 12 March (see below). [Note: Recall that when the deal was put to the House of Commons for the first time in January it was defeated by an historic 432 votes to 202.] Negotiations are expected to continue throughout the weekend, the ‘deadline’ for agreement being the night of Sunday 10 March if the vote is to go ahead on Tuesday. As of this morning, the onus is on the UK, with Brussels demanding that it comes up with an acceptable” alternative to the current backstop plan which, as originally negotiated by Mrs May but rejected by the UK parliament, would see the UK aligned with EU customs rules at the end of the Brexit transition period on 31 December 2020 unless or until there was an agreement between the UK and the EU which by another means avoided the creation of a hard border in Ireland. There seems to be little prospect of the EU agreeing to the legally binding firm end-date for the backstop come what may demanded by hardline Brexiteers in Mrs May’s Conservative Party and the Northern Irish DUP on which she depends for her parliamentary majority. BUT, as usual with the EU, one cannot totally rule out the possibility of Brussels suddenly finding room for additional 'flexibility'.
  • Tuesday 12 March: As noted above, the House of Commons is due to hold a second “meaningful” vote on the May deal, whether or not modifications to its backstop provision have been agreed with Brussels. Despite assurances from the government this week that this vote will go ahead come what may, we have seen sufficient apparently firm dates for Brexit votes postponed in the past for there to be some doubt about the timing of this one too. But if it does go ahead and the May deal is accepted, it would be a major game-changer. In theory, it would allow Brexit to go ahead, on the basis of the May deal, on 29 March. In practice, I think it is still likely that there would be an extension — at least until the end of June — simply for practical purposes, notably passing related legislation at Westminster. Nevertheless, the deal would be done.
  • Wednesday 13 March: If, however, the ‘conventional wisdom’ is correct and the May deal is again rejected by the House of Commons, the House will vote the following day on whether to remove the possibility of leaving the EU on 29 March if there is no deal between the UK and the EU. Based on what we know, there is almost certainly a clear parliamentary majority opposed to a no deal Brexit on the 29th even though there are those in the Conservative Party in particular who continue to argue for such rather than the May deal (or, needless to say, any ‘softer’ alternative).
  • Thursday 14 March: However, this would not rule out categorically a no deal Brexit on 29 March. First, on 14 March, the House of Commons is due to vote on whether the government should seek an extension to Article 50. Most commentators anticipate a vote in favour but acknowledge that it is not a given — not least because, as of today, it is not even clear how the government would ask its own MPs to vote (or whether they would be given a free vote). Furthermore, an extension would then have to be agreed unanimously by the EU27 — which, again, seems more likely than not but cannot be taken for granted. And how long such an extension would be remains a big question given already known differences of view ranging from three months (ie to expire before the new European Parliament is due to convene on 2 July) to two years (the latter almost certainly being totally unacceptable to those in the Conservative Party in particular who fear that it would amount to the death knell of Brexit — see also footnote below).
  • And thereafter? What happens if the House of Commons were to reject an extension to Article 50 on the 14th is far from clear. However, presumably the current ‘default option’ of a hard Brexit on 29 March comes back onto the table, the outcome of the 13 March vote notwithstanding. Or we go all the way to the wire with a deal (possibly even the May deal, modified or not) and/or an extension only being agreed at the very last minute. On the other hand, if an extension were agreed it is by no means certain that a clear majority would emerge in the UK parliament in favour of any of the possible options — ranging from the May deal to a second referendum — between then and the new Article 50 expiry date, perhaps especially if it were a relatively short extension (eg three months), leaving open the possibility of a no-deal Brexit at that time.

Finally, as if the uncertainty inherent in the above were not more than enough, there is, of course, always the possibility that the May government will simply collapse, perhaps even before the end of the month, leading to an early general election, the outcome and aftermath of which would themselves be far from certain.

Update: Saturday 9 March

Another day passes with, seemingly, no progress between the EU and the UK. The former remains firm that it will not renegotiate the legal basis for exit which it agreed with Mrs May, for which she has (to date at least) failed to gain parliamentary approval.

The modification pt forward yesterday would allow the UK unilaterally to leave the customs arrangement which is the cornerstone of the backstop BUT with Northern Ireland remaining in a customs union with the Republic, thereby splitting the UK and creating a hard border in the middle of the Irish Sea. I find it hard to credit that Brussels remotely believed that this would be acceptable in Westminster.

The latter seems intent (with some justification) on simply dismissing this as a "rerun of old arguments" (even though the core of the "old arguments" at issue were agreed by the Prime Minister) and insisting that Brussels is ignoring "clear new proposals" it has put forward — presumably in part at least longstanding ones based on as yet only partially proven technology (see this article published today on the BBC News website).

As I suggested above in my comment about last minute flexibility one cannot rule out a change of heart in Brussels to avoid a no deal Brexit which would be damaging to the EU27 as a whole and to the Republic of Ireland perhaps especially. But its chief negotiator, Michel Barnier, must have firmly in mind not only the sanctity of the Good Friday Agreement (see below) and the terms to which Mrs May agreed but also that the people of Northern Ireland voted clearly to remain in the EU (56% to 44%), a stance which is clearly not represented by the DUP to which Mrs May is beholden for her parliamentary majority.

If there is going to be a breakthrough perhaps the most likely timing is the 21/22 March European Council meeting.

Update: 14 March

The May government suffered two more defeats in the Commons last night (as has been well documented in the media), both in their own way unexpected.

At issue was the motion by the government proposing to take a no deal Brexit on 29 March off the table. To accommodate the differences of view on this in her party’s ranks (including in cabinet) Mrs May took (the highly unusual step on a government motion) of giving the Conservatives a free vote.

But before the original motion came to a vote, there was a division on an amendment to take a no deal Brexit off the table in perpetuity, with Conservatives whipped to vote against. Even though there has clearly been a parliamentary majority opposed to a no deal Brexit for a long time, it was still a shock when the motion was carried by 312 votes to 308. Four cabinet ministers defied the whip by abstaining and one junior minister resigned to vote against. (It is a mark of how weak Mrs May’s position is that her office has briefed the press to the effect that the abstaining ministers will not be asked to resign, as would normally be expected in such circumstances.)

The extent of opposition to a no deal Brexit was underlined when a second amendment to delay exit until mid-May in order better to manage such an exit (the so called Malthouse amendment) was defeated by 374 to 164 votes.

The House then turned to the government motion as amended earlier, with Mrs May reimposing the whip and ordering her party members to vote against. The result was a 321 to 278 defeat for the government, including 12 government abstention (four of whom are cabinet members).

All this being said, it is very important to keep in mind that even all this does NOT take a no deal Brexit off the table, for two reasons:

  1. The votes last night were not legally binding but indicative, as arch-Brexiteer Jacob Rees-Mogg was quick to point out in an interview with the BBC. The law which launched the Article 50 process still needs to be amended by primary legislation even to avoid a no deal Brexit on 29 March;

  2. Even then, the EU is currently sticking to its guns that a no deal Brexit remains the default position unless or until the UK parliament agrees on what it does want, rather than simply rejecting options as has been the case to date. Indeed, the EU27 currently insist that they will not even agree to an extension of Article 50 without a deal approved by the UK parliament, be it the May deal or another.

The Irony of all this is that, despite three humiliating parliamentary defeats in just over 24 hours, Mrs May is perhaps better placed to get her deal through parliament today than she has been at any time to date. So there almost certainly will be a third vote on the May deal no later than 20 March, coupled with a vote today aimed at extending Article 50 until 30 June (ie just before the new European Parliament convenes), to allow Mrs May to go to the 21/22 March European Council meeting with a clear package.

She may even get her way (albeit with the qualification that the EU27, for legal reasons, may insist on exit before the European Parliament elections start on 23 May). There is a realistic possibility that the prospect of losing Brexit altogether will scare even more of the eurosceptic wing of her party to vote for her deal (nb: around 40 changed sides on this in Monday’s vote). But the House will almost certainly insist on an ‘indicative vote’ on other options, among which Labour will again push hard for a customs union-based future relationship. Nevertheless, as things stand there is no clear majority for any of these options either.

So, last night’s big market rally around sterling notwithstanding, the reality remains that the UK is still on track for a no deal Brexit on 29 March even if other doors may be a little more open than they were this time last Monday.

Update: 14 March (2)

Tonight, Theresa May has finally won a parliamentary vote, plus the votes on a number of amendments to the government’s motion to seek an extension to Article 50 until 30 June (by 412 votes to 202). The irony of It is that she has secured parliamentary approval for an extension which she has never wanted. But she must now go to next week’s European Council meeting cap in hand to try to secure the unanimous agreement of the EU27, which is by no means a given.

Her cause would be greatly helped if there is at least an emerging consensus on what sort of Brexit the UK wants. To this end there may well be indicative votes on a number of options even though a motion to task a cross-party group to set the agenda for parliament next Wednesday to allow something along these lines to take place was narrowly defeated this evening.

The biggest hurdle to indicative votes is Mrs May’s determination to bring her deal to a third “meaningful vote” (MV3) next week. There is speculation that the Speaker of the House may not allow this; but let us assume, for now, that this does not happen. The Conservative whips will then work very hard to try to get those who voted against her deal on Tuesday to come round. But it seems very unlikely that they will be able to arm-twist the real hardliners in the ERG, or the DUP. Expert opinion is that she will therefore, need at least 20 to 25 Labour MPs to break with their party whips, which looks improbable.

Labour will continue to push its customs union proposal but may yet be forced to put its weight behind, rather than just paying lip service to, second referendum (even though Labour abstained more or less en bloc on an amendment calling for such tonight).

in short, despite all the drama in the House these past three days, all options remain on the table and where we end up is no clearer than it was when I first put pen to paper to produce this article last Saturday.

Update: 19 March

Some readers may find it helpful if I try to clarify where things stand this morning in the light of events since the end of last week.

The UK is still legally bound to leave the EU on 29 March under the law which parliament passed to kick-start the Article 50 process. It requires primary legislation to be passed by both Houses of parliament to prevent a 29 March Brexit, which therefore remains the default position as of today. Legislatively this should be do-able even if, as seems likely, the process does not begin until next week.

It is also the case that even such a change in UK legislation would not of itself suffice. Any change from a 29 March departure date also needs to be approved unanimously by the other 27 members of the EU. The mechanics of this are straightforward, ie a unanimous decision by the EU27 leaders at this week's European Council meeting would suffice. But the politics of it are somewhat complicated by the fact that there are significant differences of opinion among the EU27 over, most notably, the length of an extension. For example, some lean towards a proposal associated most closely with Donald Tusk, President of the Council, that the UK should be given a lengthy (ie a year or more) extension to reflect fully on what sort of Brexit it really wants (although whether it would be capable of doing any better than it has over the past two years plus is a very valid question). Others, perhaps most notably France, favour only a short extension to get Brexit over and done as quickly as possible now so that the EU can move on to other (in Emmanuel Macron's eyes at least, more) important issues on its agenda (and also, it has to be said, in the hope that the UK's exit will send a clear message to the gilets jaunes and the Le Pens of this world that there is a heavy price to pay economically for leaving the EU). 

A major complication is the fact, according to most EU legal experts, that if the UK is still a member of the EU on 2 July it must be represented in the European Parliament to protect the legitimacy of that body (nb: the new parliament is due to convene on this date). Although there may be other ways of ensuring this legally, this at least implies that the UK should participate in the 23-26 May European Parliament elections. Hence in significant part Theresa May's proposal last week to seek an extension only until 30 June which was approved by the Commons but which is by no means binding on the EU27 either in terms of agreeing an extension or the date in question.

[Comment: My personal view is that her determination that the UK should under no circumstances participate in the EP elections has much more to do with her justified fear that the Conservatives would be severely punished by the UK electorate, to the point where they could even formally split. Avoiding such a split is something which her entire conduct of the Brexit process strongly suggests she has prioritised over all other considerations, not least the national interest.]

In theory, Mrs May's task at the European Council has been complicated still further by the decision of the Speaker of the House, John Bercow, yesterday not to allow the government to bring the May deal back for a third vote unless there are "substantive" amendments to it. This means that she is very unlikely indeed to be able to go to Brussels with a proposal approved by parliament as to what exactly the UK would use any additional time for. However, it was already clear that she would not be seeking a third vote this week in any case as intense discussions with the DUP have, to date, failed to get it on board; and without the support of the DUP she is very unlikely to win over sufficient members of her own party to carry the day (and even with the DUP's support best estimates are that the Conservative ultras would still stand their ground, necessitating support from an estimated 15 to 20 Labour MPs too - which would have to be in defiance of their party whip).

It is not impossible that debate in the House between now and Thursday, when the Council meeting officially kicks off, may throw up a 'Plan B' (eg majority support for Labour's customs union proposal); but this does look to be a long shot. Alternatively, a continued Westminster impasse may help Mrs May to wrest further concessions from the EU27 at the Council, which could allow her to bring her deal back to the floor of the House next week. This might not actually take very much based on precedent in that, in 1992, the then Prime Minister, John Major, was able to reintroduce the Maastricht Bill with just one sentence added to the version which parliament had previously rejected. But this decision ultimately rests with Mr Bercow who is a strong defender of the rights of parliament (as he interprets them) over the government and who is believed by many to be opposed to Brexit personally. And let's keep in mind that even if Mrs May were to get some changes to the deal and a third vote, there is no guarantee that parliament would give it majority support this time around.

In short, there are still multiple options for what transpires over the course of the next 11 days and no-one can yet be sure where things will stand when the witching hour set two years ago arrives on 29 March.

Footnote

The hardline Brexiteers (and others) are deeply critical of what they see, with some justification, as the EU’s obsession with the Irish border. This article by David Frum, published in The Atlantic yesterday, gives a good indication of why this is such an important issue to the EU — and, of course, Dublin.

But there is, as always, another way of looking at this issue. In the absence of a highly innovative solution to the Irish border question it is the case that the UK is: either going to have to opt for a no deal Brexit (which, contrary to recent claims by Dublin) inevitably means a hard border; or it will be locked into a customs arrangement which would prevent Britain from negotiating its own trade deals with the rest of the world consistent with the ‘global Britain’ vision much touted by arch-Brexiteer Boris Johnson in particular.

Nevertheless, it is worth keeping firmly in mind that who negotiates trade deals for the UK was not only far from the heart of the outcome of the 2016 referendum result but was actually barely even mentioned during the campaign. As Robert Shrimsley reflected in the 4 March edition of the Financial Times (subscriber access only) there is, therefore, a huge contradiction in the hardliners’ obsession with “restoring the UK as a great trading nation” by clearing the decks to allow it to negotiate its own trade agreements. As he rightly notes:

“Free trade was never the big issue for most Brexiters. It was merely a useful response to the Remainer warnings of economic damage. If trade had been pivotal for them, they would by now understand the specifics of existing on World Trade Organization terms. They would know that the world is organising into trading blocs and that to be a mid-sized country outside one is to get the chlorinated end of the chicken…. Yet they are now holding out over the UK’s right to escape the limits on trade that are part of the Irish backstop. They have turned an independent trade policy into the wheel on which their dream may be broken.”

Alastair Newton

www.alavan.biz

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