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Brexit deal or no deal?

Bloomberg | Updated on February 15, 2019 Published on February 15, 2019

Neither remainers nor Brexiters are convinced they have won

Outside the Brexit bubble, only one thing matters. It isn’t who voted which way in the latest parliamentary debate. Or whether an Irish backstop to keep the border open will be agreed, ditched or amended. It isn’t how many trade deals have been signed. Its not whether the electorate will get another vote. These are all details.

The question is whether Britain will leave the European Union (EU) on March 29 without a deal. Last nights votes in parliament a largely symbolic exercise since none were binding - were simply proxies for this question. Why cant we say one way, or the other, for sure?

Last month, lawmakers passed a non-binding amendment to say the country wont leave without a deal. On Thursday, the government made clear that no deal is still a possibility.

Neither remainers nor Brexiters are convinced they have won. One side fears Prime Minister Theresa May is crazy enough to take Britain to the brink of crashing out without a deal; the other worries she doesn’t have the guts to and will make too many concessions to avoid an outcome that they think would be, at least, tolerable.

The latter are smaller in number but better organized. They are in the governing party, which would very much like to remain the governing party. The former group, a loose cross-party coalition, are determined to stop them.

The no-deal threat has force largely because it is still the legal default if nothing happens to prevent it. There is a good chance parliament will vote on February 27 to block the government from making a no-deal exit but that hasn’t happened yet. So time is running out, making the risk all the greater.

There are still unknowns. If parliament is deadlocked, the government might be forced, or choose, to request an extension to Article 50 so Britain doesn’t leave without a deal next month. Conventional wisdom holds the EU would grant that. But what if a member state vetoes it, or demands concessions? And what if the EU says it would only grant an extension for a referendum or a general election, which the government refuses to call? Stuff happens.

Even so, the prospects of no deal are diminishing by the day. There was the offer by Jeremy Corbyn, leader of the opposition Labour party, to agree to a deal that includes a permanent customs union. The prime minister might not want that, but it at least creates a parliamentary majority for a deal of some kind.

And if comments by Olly Robbins, May’s top Brexit adviser, in a Brussels bar this week were a true reflection of her position, she has no intention of leading Britain off a cliff.

In fact, if she is forced to ask for a delay and support grows for a second referendum, hardline Brexiters would probably try to put a no deal option to a vote, as their next best chance of securing a harder Brexit than May would like. Nobody should write off their chances: The campaign would be fierce and, if the 2016 referendum is any guide, impossible to predict.

The best way to kill the threat of a no-deal exit is to agree a deal of some kind. That relies on the hardliners in May’s own party, or at least a chunk of them, relenting and voting for whatever May presents, whether it be her existing deal (with modifications) or a pivot to a permanent customs union. It will, most likely, come to just that.

There are, for certain, Brexiters who cannot stomach anything but a purist departure that takes Britain out of the single market and the customs union. But however tempting their rhetoric makes it, its important not to confuse Tory hardliners with the nationalist populist movements we see across Europe.

At base, they are Thatcherites, believers in small government whose rational distrust of European integration has been taken to irrational extremes. Their differences with much of the rest of the party are more ones of degree than kind. Ultimately, very few are likely to sacrifice their political careers for that goal.

Most importantly, no deal isn’t the real prize, and Brexiters know it. They are also reluctant to own the disruption that it would cause. But once a deal is signed, the EU and U.K. would immediately enter talks to settle their future trading relationship from tariffs to non-tariff barriers such as regulatory standards, licensing and certifications. And the euroskeptics will park their tanks there.

There is a lot still to fight for in the transition period, post-Brexit, notes Timothy Bale, professor of politics at Queen Mary, University of London, who has written a book on the modern Conservative Party. I cant imagine there are many ERG members who are prepared to give up possible influence and leverage on that.

So fears that May will spark a split in her party by failing to get her deal renegotiated, or by conceding to Labour party demands for a customs union, may be overblown. Nigel Farages anti-EU U.K. Independence Party, only managed to get a single member of parliament elected in 2015 even after winning 13 per cent of the vote. Britain’s electoral system simply doesn’t make it easy to set up new parties.

We are in a very difficult position at the moment, because we have a party system that doesnt really represent the preferences of the electorate very accurately, and we also have an electoral system that wont allow a party system that better reflects the preferences of the electorate to be born, says Bale.

Published on February 15, 2019
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