Editorials

The Brexit hole gets deeper

Despite three votes this week, the British Parliament is no closer to a deal — or even an understanding of what a deal would be — on the terms of the United Kingdom’s withdrawal from the European Union. Instead, politicians appear to be digging in, clinging to positions that do not have majority support and have already been rejected by the EU. All that Britain’s politicians have agreed on is a delay of Brexit itself — understandable, and necessary, when there is no consensus on terms — but even that prospect alarms supporters of withdrawal, who fear it is subtle way of staying in the EU. It is beginning to seem that intentions are irrelevant: Key actors — businesses in particular — are making their own decisions, and Britain will pay a high price for its indecision.

As the March 29 deadline for withdrawal approaches, British parliamentarians voted this week against Prime Minister Theresa May’s proposed deal, then rejected the idea of leaving the EU without a formal proposal — “hard Brexit” — and then supported delaying withdrawal — without a timeline and indifferent to EU views on the matter. Those lawmakers also decisively rejected a second referendum on the issue, and defeated, but only narrowly, an amendment that would allow Parliament to hold “indicative votes” on options to see if any terms command majority support.

May has promised a third “meaningful vote” on her proposal next week, while warning that rejection of it could push Brexit months, if not a year or more, away. All of this has unfolded as the EU, with the rest of the world, has watched in amazement. British lawmakers seem to think that they hold all the cards in this situation and that the EU will meekly acquiesce to whatever they want. The failure of May’s team to secure better terms in their negotiations should have disabused them of this fantasy. It has not.

In stark contrast to this blind optimism, businesses are being realistic and have already begun taking steps to prepare for this new ground truth. Japanese companies, which have long viewed the U.K. as their entry point to the substantially larger European market, are among them. It is estimated that there are about 1,000 Japanese companies operating in Britain now, supporting some 140,000 jobs. Some of the most influential among them are pulling up stakes. For example, Honda has announced it will close its factory in Britain in 2021 — although the company denied its decision had been triggered by Brexit. Nissan has decided that it will stop production of its upscale Infiniti models in the U.K, a fresh blow that followed its earlier decision not to make the X-Trail sport utility vehicle there.

Companies in other industries are making similar moves, and Japanese businesses are not the only ones hedging against this uncertain future. The Dutch government has said it is in talks with more than 250 companies about moving their operations to the Netherlands after Brexit, with Sony and Norinchukin among them.

The EU is torn by this spectacle. Some on the continent harbor fantasies of their own, hoping that Britain will reverse course and remain within the union. Many others acknowledge the seeming inevitability of Brexit but are prepared to give the U.K. more time and to maintain a good relationship with London. A third group is losing patience and is prepared to let Britain suffer for its indulgences and to ensure that no other country gets similar ideas. With European parliamentary elections scheduled to be held in May, voters should have an unblinkered understanding of what euroskeptism really means. European leaders meet next week to decide what to do.

While nothing is guaranteed, the EU is likely to grant the U.K. more time to withdraw. If Parliament approves May’s deal next week, the prime minister has said she will ask only for a “one-off extension” to June 30, sufficient time for London to get its house in order for Brexit. If it does not, then she has warned of a much longer delay. Staying in would also oblige the U.K. to participate in the May ballot, which would also extend British membership.

May has other options. She could call a snap election, which her party would likely lose. That renders this idea “a poison pill” to compel her party to back her. She could call for a second referendum, but its language and legality are uncertain.

Yet, certainty is what all demand at this moment. The only thing that is clear is what the various parties do not want. There is no understanding of where the common ground is among Brexit supporters, opponents, the few that remain undecided and among the EU. Businesses are demanding clarity and absent that, they will create their own. Unfortunately for Britain’s politicians, those decisions are unlikely to work in their country’s favor. Remarkably, even that does not seem sufficient to shake up the debates in Parliament.

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