Vidya Ram

Britain in deep uncertainty over Brexit

Vidya Ram | Updated on December 24, 2018 Published on December 23, 2018

Hard talk Theresa May has much convincing to do   -  REUTERS

Even as the March deadline draws near, the political class is tossing around all sorts of options. Businesses are quite alarmed

It’s a sign of the uncertain times in Britain that a health minister’s quip that he was now the largest buyer of fridges in the world — as the National Health Service stockpiled essential medicines to prepare for a no-deal Brexit — was meant to serve as a re-assurance. The claim came from Matt Hancock, who told the BBC that they now would have adequate refrigeration as the NHS prepares to stock six-weeks-worth of critical supplies should Britain crash out of the EU in March. Such planning was the ‘responsible” thing to do, he insisted. Following a Cabinet meeting this week, the government is to set into motion £2 billion preparations for a no-deal Brexit, including having 3,500 troops on standby for contingency needs.

With less than 100 days to go till March 29, when Britain is set to leave the European Union, what will happen after that date remains as open to speculation as ever. But with MPs expected to vote down the withdrawal deal agreed by the UK and the EU in November when they return from the winter recess on January 14, a no-deal exit is becoming a very real possibility.

In the early stages of negotiations, the prospect of a no-deal exit had been touted mostly by those on the right of the Conservative party, who railed against Britain needing to make any payments to the EU as part of a ‘divorce” bill, insisting that the country could do just nicely on WTO terms. The Prime Minister — eager to extract concessions from the EU — insisted that “no deal was better than a bad deal,” and this was largely intended for her European audience. Now, with a withdrawal deal that Theresa May has insisted is a “good” one agreed to, her focus has shifted to convincing enough MPs in her party and their ally the Democratic Unionist Party of Northern Ireland to vote for it.

“If we let the perfect be the enemy of the good, we risk leaving the EU with no deal,” she told MPs in Parliament earlier this week as she sought support for her deal.

It is a risky strategy: there are many within her party who have made clear that for them a no-deal scenario is preferential to the terms of May’s deal, or a second referendum. “Leaving without a deal is not the end of the world,” insisted Jacob Rees-Mogg, chair of the right-wing European Research Group of MPs who are pushing for a hard Brexit. Former Foreign Secretary Boris Johnson has dismissed the challenges of a no-deal Brexit as merely logistical. Writing in the right-wing newspaper, The Sun, earlier this year he suggested this would be preferable to May’s deal which he insisted would make Britain a “vassal state” of Europe.

Earlier this month, former Cabinet Minister Priti Patel courted controversy for suggesting that the threat of a no-deal Brexit — which would result in grave consequences and even food shortages for Republic of Ireland — could be used to exact more concessions from Europe. Between 1845 to 1949 over a million people are estimated to have died as a result of mass starvation in Ireland.

To others within the Conservative Party, the government’s renewed focus on a no-deal scenario is unacceptable: several have threatened to resign the party whip if the government makes a no-deal scenario the default position.

However, others outside the party question the extent to which those MPs would be willing to act to prevent a no-deal from happening. Would they, for example, be willing to vote down the withdrawal deal and back a no-confidence motion in the government brought by the Labour Party?

In case of vote-down

Should Parliament vote down the withdrawal deal in January, the government would have a short period of time to present it with alternative measures, though if January 21 were reached without a deal, measures would kick in giving Parliament greater control of the process.

While in theory this could lead to — for example — plans for a second referendum, there is as yet no majority in Parliament for this option. (However, last week former Prime Minister Tony Blair suggested that there could soon be a parliamentary majority for a second referendum).

Nor is there a majority for other options such as a softer or harder Brexit than the one agreed with the EU.

Labour has so far held off a no-confidence motion in the government. If won, it is one of the ways of triggering a general election. Instead, it has opted for a no-confidence motion in the Prime Minister — which is more symbolic but which it believes will signal the level of support May commands in the House.

However, critics of the Labour front bench believe the real reason for them holding back from a no-confidence vote is because under promises made at the last Labour Party conference, the party would have to formally back a second referendum if it didn’t manage to trigger a general election. The Corbyn leadership has long resisted supporting a second referendum, insisting — like the government — that the “will of the people” had to be delivered on, and Brexit proceeded with.

Given the political chaos, it is unsurprising business is extremely alarmed. This week the country’s five biggest business groups warned businesses were watching “in horror’ at the lack of progress, with many reaching “the point of no return,” draining down time and money with contingency planning, and pausing or diverting investment.

The Financial Times has reported that Jaguar Land Rover will cut up to 5,000 jobs in the new year as part of a wider overhaul programme in response to market challenges, including Brexit uncertainty (the company has so far declined to confirm the rumours). Official analysis has suggested that Britain would be economically worse off under all Brexit scenarios — including the Prime Minister’s (economic growth would be up to 3.9 per cent lower over a 15-year period), and certainly in the case of a no-deal exit (when the hit could be up to 10.7 per cent).

Meanwhile, Europe too has stepped up its planning, on Wednesday announcing measures for over eight sectors from transport and customs to financial products — to keep, for example, flights continuing and hauliers on the road.

However, they’ve vociferously rejected any suggestion that this amounts to anything like a managed-exit that some in the British government have been vaunting. “There is no such thing as a ‘managed no deal’,” insisted Guy Verhofstadt, the European Parliament’s lead negotiator on Brexit.

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Published on December 23, 2018
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