Now for the Hard Part

After 18 months of tough negotiations and several missed deadlines, a draft Brexit deal has been agreed. A summit has been arranged for the 25th November to finalise the agreement. In the meantime, Theresa May just needs to get her party to agree to it. So far the omens are not good. Her Brexit secretary reacted to the draft by resigning, claiming he'd been blindsided by its contents. Several other Brexit supporting ministers joined him, whilst others have openly asked for changes. After several senior figures turned the job down, an obscure junior minister was announced as the new Brexit secretary leading to a spike of Google searches. Even some journalists said they'd never heard of Stephen Barclay. More importantly, he's only responsible for domestic preparations, not the withdrawal agreement. Negotiations with the EU are now officially under Theresa May's control.

Predictably, the news agenda has focused on a leadership challenge launched by the hard right ERG on Thursday morning. 48 Tory MPs need to send a letter requesting a leadership contest to Graham Brady who heads the 1922 Committee that represents backbench interests. Once all 48 letters are received, Brady is required by party rules to organise a no confidence vote in the Prime Minister. If May loses that vote she is obliged to step down as party leader and as PM. A leadership contest will take place to find her successor. There are plenty of candidates to replace her, but no clear frontrunner.

Steve Baker, the brains behind the ERG, was widely mocked on Friday for giving mixed messages about the number of MPs who had sent letters so far. 21 MPs have publicly claimed that they've submitted letters of no confidence, but most observers believe that the 48 threshold will be reached in the next few days. Government whips are certainly taking the challenge seriously. The question is whether Theresa May will win the vote of no confidence. Most commentators believe she will, if only due to the lack of obvious alternatives. It is by no means a certainty though, she could still lose. Baker didn't help matters by declaring that the ERG candidate in a leadership election would be chosen by lots.

The unspoken question is why the ERG are launching a leadership challenge now. Its certainly got them a lot of attention, but due to a clause in the party rules might prove counterproductive in the long term. If May wins a confidence vote, she's immune from another leadership challenge for the next 12 months during which time she could resolve Brexit without ERG support.

If Theresa May Wins a Tory Leadership Vote

It has always been believed that the ERG would never support a final withdrawal deal. Their demands are simply incompatible with any agreement palatable to the EU. Instead, May's strategy is to win over remain supporters in the Labour Party with the spectre of a no deal Brexit that they would believe would unleash economic chaos. This is a strategy doomed to failure. Labour backbenchers will vote against the deal because they have their own plan to force a second referendum as part of the cross-party People's Vote campaign. Brexit is one of the few things keeping a highly divided Labour party together. Corbyn is known to be a Brexit supporter, but this is a minority position even among his own wing of the party. Official Labour policy is to force a general election so that they can negotiate a softer Brexit deal than the Tories. If that can't happen, a second referendum is on the table. The labour leadership are not going to support a deal negotiated by the current government any more than their backbench, as they believe that failure to pass an agreement would result in a winnable general election.

Corbyn's problem is that the Conservative Right don't want an election, because they don't think they'd win with May in charge. The current minority government suits them and their DUP allies quite well on everything except Brexit. Their only credible threat to stopping May getting her way is a leadership challenge, which at the moment no one expects them to win. The DUP could withdraw their support for the government if the current deal went through. The backstop arrangement is totally unacceptable to them as it imposes customs checks on some goods coming into Northern Ireland, although it is notable that the DUP base support the deal for economic reasons. May will do a deal with them if she absolutely needs to, but not before.

In the meantime, she is going to have to cut a deal with the Labour Party backbench to get the withdrawal agreement through parliament. Their price is clear - a referendum that has Remain on the ballot paper. She's always opposed this option in the past, but political realities will leave her with no choice. This will infuriate her party, but if she's safe from a leadership challenge there's nothing they can do. The threat of a second referendum is likely the only scenario where May would definitely be ousted, but by acting prematurely the Tories have given up any chance of blocking it. Many Brexit moderates would oppose a new referendum given enormous pressure from their heavily pro-Brexit party membership to do so. Adding a 'leave with no deal' option to go alongside the 'remain' and 'leave with deal' options to the referendum ballot paper, would buy sufficient support to keep the government going. Although the long-term position would become untenable. She would face multiple cabinet resignations and would almost certainly end up as a lame duck, but that would not faze her. She's faced down worse, and as known to be a stubborn leader that plans for the long term.

As for who would win a referendum on the deal? It depends on the wording of the question and the way the options are presented, particularly given that there are three options to choose from. The final decision on this would be made by the Electoral Commission based on what they consider to be clearest and most impartial presentation. A preference based ballot would see remain win easily. A two stage ballot would see May's Brexit deal win. Even a remain win would not settle the issue though as the Tory Party is now ideologically committed to leaving the EU. Their next election manifesto will contain a commitment to reopen Brexit negotiations regardless of what happens between now and March.

If Theresa May Loses a Tory Leadership Vote

There is an intriguing alternative possibility. If May loses the leadership vote, the next Prime Minister will likely come from the cabal of Brexit supporting cabinet ministers currently trying to force a renegotiation. The intellectual driving force behind this group is Michael Gove, although he is too unpopular to be their candidate for leader. A few months ago, a close ally of Gove floated the possibility of a temporary soft Brexit, where Britain joins the EFTA whilst a long term arrangement is negotiated. Only a Conservative leader who supported Brexit can deliver this outcome, as it betrays the spirit of the referendum result.

However, Gove's priority is to deliver Brexit whilst avoiding a no deal scenario. Gove is a true believer in Brexit, he used to be a newspaper columnist so his political views are well known. His concern is that the consequences of a no deal exit would fatally damage public support for Brexit and lead to the UK rejoining. This is Plan B for the People's Vote campaign too, as it keeps the UK in the Single Market. The EU would go along with it on a temporary basis because it protects the integrity of the single market, although there would need to be concessions to avoid this becoming an attractive option for other member states. To the Brexiteers, it would be sold as the first step in a process of gradual disengagement from the European project. The DUP and the ERG would be incandescent but powerless to stop it. Ironically, gradual disengagement is actually an ERG strategy first articulated several years prior to the Brexit vote by Daniel Hannan, the well-known Brexit supporting Tory MEP. They oppose it now, but could probably live with it if absolutely necessary. After all, number one objection to Theresa May's agreement is that the backstop can't be ended unilaterally by the UK. It's not clear that the EEA option would allow this either, but it definitely allows more flexibility and scope for renegotiating the relationship over the long term.

Amidst all this uncertainty and manoeuvring, there are two available options which definitely won't happen. Firstly, the existing deal won't pass parliament in its current form - it satisfies nobody. The second is that Parliament will not tolerate a no deal Brexit. A Brexiteer Tory leader trying to pursue no deal would find themselves facing a no confidence vote followed by a general election. That's an election in which Labour would likely emerge as the largest party, but probably not with a majority. In the event of an election or a referendum, the European Commission have already made it clear that Article 50 would be extended. It's worth remembering that the EU don't want the current deal either, and would prefer a closer arrangement or no Brexit at all. Donald Tusk said so on Thursday. If a new prime minister went to Brussels looking for such an agreement they would receive a sympathetic hearing. As such, it's likely that we're in for years more negotiations until a long-term resolution to Brexit is reached. For the first time though, there is a remote possibility that Brexit could be avoided and in the strangest twist of all, it is the Conservative hardliners who are the cause of it. The law of unintended consequences is a funny thing.