November 23, 2018
Why this deal is very likely to be approved - in the end
After the publication of the Brexit political declaration, the mood is dark and the forecasts are glum. But we are hearing the mood inside Downing Street is upbeat. In today’s lead story we would like to explain why that it is so - in much greater detail than we have before.
The main reason why we think that the deal will be accepted is that the legal framework for Brexit - Art. 50 plus the accompanying domestic legislation - greatly favours acceptance of the withdrawal agreement. Theresa May still frames the decision as a three-way choice: deal, no-deal, no-Brexit. As we explained yesterday, this is a useful smoke-and-mirrors tactic for now. But as we head to the final choice, maybe in a second vote next year, the three options will narrow down to a binary choice between deal and no-deal. At that point we would assume that the UK parliament will reluctantly support the deal.
As the legal journalist David Allen Green put it yesterday, Brexit will happen on time by the force of law. It is not a path yet to be taken. It is entirely irrelevant whether the parliament opposes a no-deal Brexit. The undoing or postponement of Brexit cannot be achieved by parliament as a backseat driver. It will require a prime minister and a government to do all of the following, in this specific order:
- agree internally to a second referendum and an extension of the Article 50 period;
- bring legislative changes to the EU withdrawal act and to the appeal of the European Communities Act;
- initiate legislation for a referendum;
- make an official request to the EU to extend Art. 50, and for the EU to accept this request with unanimity;
- get the ECJ to rule that Brexit is unilaterally revocable.
Theresa May left no one in doubt yesterday that she will not initiate a second referendum. She was asked numerous times and gave a clear answer on this point. It is possible that, as early as this Sunday, the EU itself might pre-commit to vetoing an extension request. But we would not bet on this. For one thing, the EU might not want to be blamed for a hard Brexit. There are political interests to defend in the EU as well. The EU might not wish to foreclose on the possibility of a new UK prime minister changing course.
It is possible that May herself might resign. She does not give the impression of a politician who quits easily. More likely, we think, she will go back to the EU and try to amend the deal in one or two important points. After that, we would be in the deal vs no-deal scenario.
If the above-mentioned process were to happen, it would require at a minimum a new prime minister and a cabinet committed to Brexit reversal. So, May would have to be gone. It is important to consider this process in some detail. If she quits, a new more eurosceptic Tory leader would take over. There could be immediate elections, though this is not certain.
If she does not quit, a Tory leadership challenge is still likely. It could either leave May in place, or end up with her being replaced by another more eurosceptic Tory like Michael Gove or Sajid Jarvis.
So, to enable the above sequence would require a change in Tory leader, a general election which that newly elected Tory leader would lose to Labour or a coalition led by Labour. The opposition itself does not currently have the votes to force an election. That would require that either May or her Tory successor seek a parliamentary majority for an election. Even a successful leadership challenge would not automatically remove her from office for at least two months.
So let’s work through this in detail. The likely election scenario would require the following sequence:
- May resigns or Tories trigger internal no-confidence vote against May with a majority of at least 158 Tory MPs voting in a secret ballot to replace her.
- A leadership contest begins; two MPs would emerge as the leading candidates. Tory members have the final vote; in 2016 the entire process was scheduled to last for about two months. It was cut short because May emerged as the only candidate. Unlikely to happen again.
- While the leadership contest continues, May remains in office. A new leader would emerge in mid-to-late February.
- A new leader would have to seek a majority for elections pre-Brexit.
- Elections could be held in the second half of March at the earliest.
- Labour wins the elections, but fails to secure an overall majority - second referendum most likely if a minority Labour government was supported by LibDems or Scottish National Party.
- New parliament would initiate the second referendum process within a few days.
The only other option to consider is the following slightly shorter sequences:
- May loses the vote;
- there is either no confidence vote or she wins it;
- she seeks and wins majority for elections;
- she loses the election.
A referendum would probably take some time to legislate and to hold, maybe 9-12 months. It is possible that the new government would want to frame the debate as no-deal versus no-Brexit. We don’t think the EU has an appetite for this. We don’t think Corbyn has an appetite for this, nor do we think that voters do.
This is why we believe this is going to be a straight choice between deal and no-deal. One can’t assume that people will always act rationally. But we would be very surprised it the Remainers didn’t blink at the point when they can no longer pretend that they could get a better deal.