The new hope for the UK being rescued from Brexit (as if there were any solution that not leave large swathes of the citizenry feeling bruised) is May’s handbag. I am not making that up. From The Times:
Theresa May will seek to emulate Margaret Thatcher by travelling to Brussels to demand a better Brexit deal in a last-ditch attempt to save her government from collapse.
Ministers and aides have convinced the prime minister that she needs “a handbag moment” with EU bosses if she is to have any chance of persuading her own MPs to support her.
They expect May to announce tomorrow that she will launch a final throw of the diplomatic dice with a dash to Brussels, a move that could result in Tuesday’s vote being postponed.
The odds are decent that May will put off the vote. The Conservatives were demanding answers on what their MPs would do on Tuesday, amid rumors of a catastrophic defeat. And the sharks are circling. Javid has put himself forward as a PM candidate, and Boris is again making the rounds.
Here is how ConservativeHome assesses the likely outcomes:
If the Government motion fails, and all amendments fail, then there are several things that might happen:
May could face a vote of no confidence in the Commons. Kier Starmer has said that Labour would table a vote, but with the DUP stating that they would support the Conservatives in such a vote, this is unlikely to succeed. If the Government did fall, there would be 14 days for another Government to win a vote of confidence in the Commons, or the country will have a General Election.
Conservative MPs put in 48 letters, and the party has to have a confidence vote in the Prime Minister. If 48 letters go in, this would require a swift vote of confidence, where May must win more than 50 per cemt of the 315 eligible MPs. If she lost, the party then has to elect a new leader. Given the incredibly short timescale before 29th March, the Conservative Party would be signing its own death warrant to do this.
Labour tries to table a censure motion about May – this is effectively a personal vote of no confidence in the Prime Minister, which is what happened recently to Chris Grayling. This would potentially allow Tory MPs to vote against the May without bringing down the Government. However the Government is under no obligation to provide time for an Opposition Day before Christmas, so this is unlikely to happen.
The Prime Minister goes to negotiate with Brussels and brings back an amended deal. This would then require the Government to win a vote on its renegotiated deal, using the procedure outlined above. If no negotiated deal can pass through the Commons the UK will leave the EU without a deal.
As we’ve indicated, the Tory loathing of Corbyn is so great that the odds are high that May would survive a vote of no confidence, and that would keep her safe from another challenge for a year. They’d need to be confident they could settle on a new leader in the 14 day window before a General Election process would kick in. The DUP would be certain to join, since as the linchpin to a coalition, they’d continue to enjoy their veto power.
But May’s and the UK’s desperation has not produced any new options. Worse, British officials are touting non-starters. Amber Rudd flogged the “Norway” plan after Norwegian leaders rejected it, and Norway has to consent for the UK to join the Efta. Similarly, Guardian reported that Tory ministers are now divided over the question of a second referendum, and it turns out that Labour is now divided too, per The Times:
Labour’s fragile truce over a second referendum broke down further today as a key ally of Jeremy Corbyn said that it should be held only as a last resort.
Jon Trickett, the shadow cabinet office minster, said that Labour would be “rightly” in difficulty with its voters if they felt that the result of the 2016 referendum had been reversed by a “privilged political elite”.
Labour’s MPs, its union backers and its grassroots are deeply split on the question of a second referendum on EU membership.
Mr. Corbyn is being pulled towards one by John McDonnell, the shadow minister, backed by Momentum, the activist campaign group that helped him to win and defend the leadership.
The Telegraph reports that the Government is considering a second referendum without a Remain option (that would go over well) and several outlets stated that she’d called EU Council President Donald Tusk, but there was no detail on what they discussed.
Needless to say, all these struggles reflect the fact that the UK leadership is, astonishingly, still refusing to come to grips with the fact that the clock is ticking and the EU is not on board with any of these ideas. The latest evidence is from the Washington Post:
Europeans have gone slackjawed at London’s political chaos, with normally demure diplomats comparing the process there to a slow-motion car wreck. They say they can offer little other than cosmetic tweaks that might help May save face with her own Conservative Party. And they have begun to accelerate their emergency planning to prepare safety nets that could avoid some of the humanitarian and economic chaos that might happen if Britain crashes out of the European Union on its deadline of March 29, with no other plan in place…
If May loses, she could go back to Brussels, cap in hand, and ask for further concessions, as early as next [now this] Thursday at a previously scheduled summit. She would hope that any tweaks to the deal, plus perhaps panic from the markets, would be enough to persuade lawmakers to support it at a second vote…
In Brussels, officials say they are willing to keep discussing the deal — just so long as nothing of substance changes. They could offer nonbinding declarations to make clearer that the remaining E.U. members do not want to lock Britain into an economic marriage against its will. They could tweak the part of the Brexit deal that lists the aspirations for their future partnership, which does not have the force of law. If talks seem to be on track, they could nudge the Brexit deadline from March to late June, when a British-free new European Parliament will be seated.
“Usually there are some — I can joke — tricks,” the frank-talking Lithuanian President Dalia Grybauskaite said last month of the way the European Union finds consensus among its many members. “We promise to promise.”
And the article describes why the EU isn’t willing to make more concessions to avoid a crash-out:
Advocates of a hard Brexit claim that they still have leverage in Brussels because the chaos of a deal-free British divorce would also snarl European economies.
E.U. negotiators say the British are badly deluded and that their own business leaders actually fear a no-deal Brexit less than concessions that could give British businesses advantages in the vast E.U. market without the obligations of E.U. regulations and taxes.
Consistent with the EU not being inclined to be conciliatory to the UK, the EU is getting tough with Switzerland on its “equivalency” arrangements for financial institutions. Recall that the EU agreed, after originally rejecting the idea, to allow UK financial institutions to have access to the EU under a similar regime. The tightening of the Swiss scheme is meant as a warning to the UK. From the Financial Times:
Switzerland faces the threat of financial sanctions from the EU after its cabinet refused on Friday to endorse a deal aligning the small Alpine nation more closely with the bloc.
In decision that could have ramifications for the UK after Brexit, the Swiss federal council, or cabinet, declined to agree a proposed new “institutional framework” to govern EU trading relations with Switzerland, which is not an EU member….
Friday’s Swiss move opens the way for retaliation by Brussels, which warned beforehand that if Bern did not approve the new framework it would withdraw “equivalence” status for the Swiss stock exchange — meaning EU banks and brokers would no long be able to trade there.
Jean-Claude Juncker, the commission president, will lead a discussion in Brussels on Tuesday to decide on whether to allow the equivalence to expire on January 1, as had been threatened if there was no decision. One alternative is to extend the equivalence for a matter of months to allow the consultation to run its course.
The commission’s use of the equivalence decision as a weapon sets a potentially worrying precedent for the UK’s financial sector, which is likely to face a similar regime post-Brexit….
Since the UK voted to leave the EU in 2016, Brussels has sought to recalibrate relations with “third countries” and ensure Switzerland’s package does not become a model for a post-Brexit UK….
Failure to agree an institutional framework could hit Swiss access to EU research programmes — and will prevent talks on future EU market access deals, including for Swiss banks.
And last but not least, the ECJ ruled this morning, consistent with its advocate’s opinion last week, that EU members can unilaterally withdraw an Article 50 notice. What is surprising about the decision is that it didn’t have some of the restrictions that the advocate described last week, such as what amounted to a good faith requirement.
As indicated, I’m an outlier in not seeing this as having much significance for Brexit, since the EU had repeatedly made clear it would allow the UK to rescind its Article 50 notice up to the very last minute. However, it does appear that the ruling has legitimated the idea of backing out of Brexit, perhaps because having the UK be able to do it without EU27 assent would make it seem like less of a climbdown.
Similarly, even though EU leaders may be upset at the idea that the ruling could allow EU members to game the system by putting in A50 notices to gain leverage and then withdraw them, again I see that as extraordinarily unlikely.
First, 19 EU members are also members of the Eurozone. As we’ve discussed at great length, creating a new currency requires massive IT changes which will be made largely by parties outside the exiting country’s control. Of course, that could lead a country that was serious about a Euroexit to go into reverse when they realized two years wasn’t enough time and they’d be left with a non-functioning banking system if they persisted (see what happened in Greece in 2015, albeit for different reasons, for an idea of the consequences).
Second, despite the austerity-producing policies of the EU, even diehard Euroskeptic Ambrose Evans-Pritchard deemed Italy to be the only country for whom an exit would be economically attractive, and he also said the window of opportunity would have closed by now. And Evans-Pritchad hadn’t factored in the difficulty of introducing a new currency.
Finally, trying to play the system is a hugely risky political move. If a country can muster up whatever it takes constitutionally to put in an A50 notice, it would have to have a shifting in political forces to reverse it. The public will have been played if A50 is used for gaming by elite interest, and the public and businesses do not take well to being gamed. They’ll see how Brexit has torn the UK apart, cost it GDP, and led the EU to move out the HQ of important EU agencies, which the EU is very unlikely to move back even if the UK relents.
If a government launches A50, it has no assurance it will be able to manage the forces it has unleashed to turn the process around. And the UK demonstrates that there is a big GDP cost too which does not make incumbents popular.
Needless to say, this is a very big week for the UK and the EU, and we’ll know more about how things might shake out in a few days.