Commentary / World

The endgame of Brexit is approaching at last

by David Howell

As Britain struggles through the Brexit maze it has now reached the situation where one of three things can happen.

First possibility: Prime Minister Theresa May again presents her plan to Parliament (probably on March 21 but maybe earlier) — which is the EU withdrawal agreement, a legal treaty agreed after lengthy and painstaking negotiations between the U.K. government and the European Union. She wins a narrow majority and the crisis is over, with the United Kingdom then moving on to a two-year gradual and orderly transition to new arrangements with the EU and world trading partners.

Second possibility: The prime minister presents her plan (a slightly revised agreement) and loses again, just as she did heavily a few weeks ago. In that case the official EU exit date for the U.K., March 29, will immediately be postponed (via a request to the EU Commission), either for a few weeks or maybe for several months.

Third possibility: the prime minster loses control completely and Parliament can reach no consensus, even on delaying the exit date, in which case the U.K. will “crash out” of the EU with no overall arrangements, but a number of separate provisional agreements to maintain vital services (such as aviation, energy, police and security, and free cross-channel freight movement for a few weeks).

Of the three possibilities, the likelihood is the first or second. The third, crashing out, is very unlikely, because even if May still loses badly there will be immediate steps to postpone the March 29 deadline. For this, at least, there is majority Parliamentary support.

Beyond postponement, of course, there will be the question of “postponement for what?” The other EU countries, which are just as unhappy about a crash-out as the U.K. itself, will all have to be consulted if the delay is more than a few weeks. There will be much argument about whether this is for yet more negotiations with the EU Commission, or preparations for another referendum, or if none of this is agreed, a general election with a new, and hopefully less deadlocked Parliament emerging as a result.

Meanwhile the U.K. will remain a member of the EU until a new exit day is agreed — which some hope will be never.

Now for the detail behind these three possible outcomes (and I’m afraid it is ridiculously complicated):

1. To win the support of most of her party, plus the supporting Northern Irish party of 10 crucial votes (the Democrat Unionist Party), and some Labour votes as well, the prime minister needs to come back from talks both with the EU in Brussels and from Dublin with the withdrawal agreement either modified or added to.

The present agreement — which Parliament turned down by a large majority — stipulates that if no way is found of keeping the border between the Republic and Northern Ireland (part of the U.K.) wide open, then the whole U.K., including Northern Ireland, is required to stay indefinitely in a permanent customs union with the EU.

This is the so-called backstop that the British House of Commons hated and voted down. So somehow May must persuade the EU authorities in Brussels to water that down and make the backstop time-limited, or at least something that Britain can walk away from after a while.

So far the EU has firmly said it will not re-open the agreed treaty, but some kind of let-out document could be added to it — perhaps. If May and her ministers squeeze that last-minute concession from the EU, there is a reasonable chance (say 50-50) that she can win a majority in the House of Commons in March and the crisis will be over.

2. But what if she fails to get the changes needed to convince either her Northern Irish supporters or her own hard-line Conservatives? In that case she loses yet again in Parliament. If that happens then there will be immediate steps, supported by Labour and Liberal-Democrats and others, and quite a few Conservatives, to postpone the exit date rather than “crash out.”

3. The full disorderly crash out, even if “managed” in some ways, is therefore almost impossible, since if May loses on March 21 there has to be an exit postponement. After that there will be a struggle that ends either in the current agreement being eventually approved, however reluctantly, or a new referendum (unlikely, time-consuming and very dangerous), or staying in the EU (also unlikely), or a general election and a new House of Commons that might prove more sensible and less paralyzed.

In a general election, both main parties would be split from top to bottom, with neither leader, May nor Labour’s hard-left Jeremy Corbyn, being very popular. The opinion polls suggest that May and the Conservatives would still win, because Labour is even more divided than the Conservative Party, and many of them detest their Marxist leader, not least because he is a strong admirer of the ugly socialist dictator Nicolas Maduro in Venezuela. Corbyn’s popularity, which was high at the time of the last election in June 2017, has now plummeted.

In short, after all the winding complexities the immediate outcome is reduced to two routes, neither very attractive but at least going forward instead of leading to a total train crash: the deal agreed or a postponed exit.

It is significant that both London stock markets and financial markets are quite stable and strong, so perhaps they know there will be a positive outcome and perhaps they are right. It is noteworthy, too, for those who still believe in official economic statistics, such as GDP growth, that the U.K. is currently the fastest growing economy in Europe, with some of the lowest unemployment. Strange but true.

David Howell is a Conservative politician, journalist and economic consultant. He is chairman of the House of Lords International Relations.