Brexit: Deadline Day

Three weeks ago, I naively wrote that we'd reached the endgame of the Brexit saga. I said that Parliament and the Prime Minister had run down the clock so much that further delays were no longer possible. In doing so, I comprehensively underestimated the stubbornness of UK MPs. Both Theresa May and Jeremy Corbyn have spent the last 4 months delaying a decision on Brexit because their preferred option lacks support in the House of Commons. They've resolutely pushed for a Brexit deal of some description even though many in their parties are fundamentally opposed to the very concept of leaving with a deal. The Tory membership want No Deal, the Labour membership want to remain in the EU. Now the EU27 have given them a deadline and an ultimatum: make a decision by 30th March on what type of Brexit you want or we'll make it for you.

Plan B

As events in Westminster have unfolded, it has become clear that all factions in the debate have a Plan B in the event their preferred solution is ruled out. Jeremy Corbyn has flirted with a second referendum before returning to the familiar ground of his alternative deal. The ERG toyed with the Malthouse Compromise and an alliance with Conservative deal supporters before returning to advocating No Deal. The Liberal Democrats have spent the past 48 hours campaigning to revoke Article 50. During a European Council meeting this week, the EU finally realised that there is one player that does not have a fallback plan - Theresa May.

The Prime Minister has earned a lot of respect for doggedly sticking to her deal despite the vicious infighting that has engulfed the House of Commons. Her strategy has been to run down the clock until one side of the debate switches to supporting the Withdrawal Agreement for lack of alternatives. This is driven by the PM's own fears of those alternatives - she is terrified of the economic risks in No Deal and frightened by the public outrage that would arise from No Brexit. Either scenario would split her party but the Conservatives would recover far quicker from No Deal than No Brexit.

Following cabinet pressure, the government is preparing to shift towards a No Deal position. This was best articulated by Theresa May in a controversial speech on Wednesday evening, where she attacked MPs for blocking the deal. Her message was well received by the media and many voters, but upset MPs at a time they were shifting towards supporting the deal. Now the reverse is happening. The Withdrawal Agreement is losing support as a direct result of Wednesday's speech.

Parliament Decides

It is possible that Labour may make an eleventh hour change of heart and shift to supporting the deal. There were discussions about doing so yesterday, but the EU's extension offer killed off that possibility. This is because European leaders offered two possible extensions - the UK will leave on the 23rd of May if the deal is approved next week or the 12th of April if it isn't. If Meaningful Vote 3 were to happen, it will be on Tuesday, and the government will lose by a larger margin than last time.

The more likely scenario is that on Tuesday or Wednesday the Commons will play host to the long delayed indicative votes process, in which Parliament will vote on all the available Brexit options in turn. This has been pushed by an alliance of senior remainers on the Labour and Tory backbenchs. The idea is that either remain or soft Brexit gets a majority thus forcing the Government to pivot towards it. Regardless of the noise generated by the People's Vote campaign there is only a minority backing a second referendum in Parliament - at least 75 Labour MPs are opposed to the concept as are the overwhelming majority of Conservative remainers.

The only option capable of getting a majority in Parliament is a Soft Brexit modelled after the relationship Switzerland has with the EU, along with a Customs Union to guarantee an open border in Ireland. Corbyn will back this as it's close to his proposed six tests - the question is whether the hardline Remainers in the People's Vote campaign do. If a second referendum and revoking Article 50 are ruled out then they will. The sequence of votes in Parliament next week is crucial. Fortunately, they have the support of Speaker John Bercow who decides such things. He will arrange the order of votes so that Soft Brexit can pass in remain doesn't.

End of May

Theresa May has already indicated that she would respect whatever Parliament decides. She doesn't have much choice. If she tries to block Soft Brexit she'll find herself on the losing side of a Vote of No Confidence. The government will try to override such a vote by holding a final meaningful vote for her deal, but Bercow will block it for the same reasons he did this week. Even if he doesn't, it will lose because too many members of the ERG regard the existing Withdrawal Agreement as just another form of Soft Brexit. One of the less appreciated facets of the current debate is that the Plan B for many No Deal supporters is remain rather than a different sort of Brexit.

The Tories will instead try a different tactic - oust Theresa May and call an election during which they campaign on a No Deal / hard Brexit platform. There are already serious discussions with the 1922 Committee about how this could happen. Given that a Tory Leadership contest will be required first, it is unlikely an election will take place until the Autumn, by which time current passions will have cooled and the opposition message of a compromise Brexit might resonate. Labour won't get a majority, but they will deny one for the Conservatives thus forcing the Government to open negotiations on a Soft Brexit.

In the event that Parliament does not vote for Soft Brexit then Theresa May will still be out of office by Easter. If the deal doesn't pass and no alternative option is agreed, then the Prime Minister will have no choice but to pivot to No Deal. This will trigger several dozen ministerial resignations, but also half a dozen defections to the Independent Group. This will be sufficient to cost the government its majority and the vote of confidence that will inevitably follow.

Exit Date

In no plausible scenario will an extension to Article 50 be possible. This requires government legislation to organise the European Parliament Elections, which needs to pass by 11th April. Without Conservative support that is an impossible deadline. The UK is leaving the EU this spring without the current withdrawal agreement. Instead, a remarkably familiar looking standstill agreement will be reached in the hours leading up to the final departure date. If the UK is on a path to single market alignment and a customs union then the backstop will be replaced by a commitment to EEA membership. If its not, then an unspecified commitment to a permanent open border in Ireland will be included but no details of how this will be achieved. EEA membership is reversible - there's an exit clause in the relevant treaties so the ERG secretly prefer a Soft Brexit deal to Theresa May's Hard Brexit. Expect lots of hot air about betrayal and fake Brexit.

The simple fact is that no one is ready for No Deal. As a result, no one wants it right now. The Conservatives want it in a few years once the British Government is ready. Most ERG members have spoken in favour of a transition period at some point. Germany can ill afford the resulting disruption - their economy is slowing due to the Chinese economic downturn and Trump's trade wars. A chaotic No Deal with trade barriers appearing overnight would tip the global Economy into recession. Britain would suffer more than the EU, but Ireland would be worse hit of all. For that reason alone, the EU will do as much as they can to ensure a smooth transition. If the European Economy was still booming then the EU would be far less flexible, but domestic politics always trumps international concerns - and keeping the economy growing is always domestic priority number one. There are limits to what can be achieved given the rigidity of EU rules and the conflicting priorities of members. The UK has repeatedly run up against these limits over the last four months, and will continue to do so, but experience and an alliance on European matters with the Swiss will help in future.

Poor leadership and an unwillingness to compromise have turned a difficult diplomatic negotiation into a major political crisis. The reputation of the British government has suffered immeasurably both at home and abroad. There is a palpable sense of anger among British voters towards their elected representatives. A bond of trust has been broken. The primary actors on all sides are seen to be acting for personal gain rather than the national interest. Their careers will suffer, just like those at the centre of the Expenses Scandal did a decade ago. A new generation will rise to the political front line in the place. This is already happening in the Liberal Democrats, who are holding a leadership election expected to be won by an MP first elected in 2017. The other main parties will have new leaders this year too. Let's hope they learn from the mistakes of those that came before them.