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January 20, 2019

Groundhog Britain

We are once again at a stage in the Brexit process where no option on the table right now has any chance of success: this goes for the plan B Theresa May will unveil today, as well as for the two most promising parliamentary manoeuvres trying to frustrate a no-deal Brexit. If you think it through, nothing works.

The purpose of the plan B that May will propose today is to run down the clock. The Daily Telegraph has the story that she wants to propose a bilateral deal with Ireland, but we see zero chance of that happening, at least not until five minutes before the Brexit deadline. The Irish government preemptively rejected this. We see this plan as a diversion - to buy time. 

May herself has now rejected a Brexit compromise with other political parties, a decision made easier by Jeremy Corbyn's refusal to attend talks. Over the weekend there have been renewed attempts to line up a Conservative/DUP majority behind May's plan. We heard some emollient tones from Jacob Rees-Mogg who said that May's plan, bad as it is, was still preferable to no-Brexit. It is a development to watch.

What to make of the various amendments currently under discussion to frustrate a no-deal Brexit? We had hoped not to bother readers with arcane UK parliamentary procedures, especially since we believe that they will, in the end, not matter. But the amendments by Dominic Grieve and Nick Boles are likely to dominate the debate for some time. Both essentially constitute a power grab, to take the monopoly to legislate away from government. The parliamentarians have identified, correctly, that their power is currently limited since the alternative options - be it a second referendum, unilateral revocation or even a request to extend the Art. 50 deadline - all require legislation, over which the government is in control. 

Grieve will propose an amendment to today's statement by May that would effectively take away Rule 14 of the standing orders of the House of Commons. This means that the government would lose control over the legislative timetable in the Commons. Grieve is proposing that a minority of 300 MPs from at least five political parties would in the future be sufficient to move legislation. This number is no accident. Recent anti-government amendments were passed with a voting threshold of just over 300. There is a high probability that the Grieve amendment will pass. The question is, what then? May will have lost control of parliament. But the passing of the amendment still does not get around the fact that parliament would need to find its own majority to pass any legislation under the new rules.

Bowles' amendment seeks an extension of the Art. 50 deadline until December. This is a nonsense amendment, since it is up to the European Council to decide whether or not to extend, and for how long. The Council will set the terms unilaterally - over Mr Bowles' head. 

We believe that Grieve will propose legislation that could pave the way for a second referendum. Grieve, a former attorney general, is an intelligent operator and well versed in UK constitutional law and parliamentary procedures. But none of these manoeuvres can succeed unless they carry a positive majority. We could see Corbyn reluctantly endorsing a second referendum as a last-minute option. It is the strategy of second-referendum campaigners to run down the clock and confront the issue once all the alternatives have been eliminated. But it is one thing for MPs to come out and say: we want to avoid no deal; and quite another to say that they want a second referendum. Even if Corbyn himself were to come off the fence - and there is no guarantee of that - we do not think that the numbers are there. We see at most 30 Tory MPs in favour of a second referendum - and ready to sacrifice their seats for it. But we definitely see more than 20 Labour MPs opposed to it.

May herself has now ruled out the so-called indicative vote for precisely this reason. Over the weekend, we noted a row between Bowles and various second-referendum supporters. He was appalled that they would dump on his favoured Norway solution. The anti-no-deal coalition is already showing signs of fragility.

While we are very sceptical about parliament driving this process from the backbenches, we are also sceptical about May's own strategy. We would, however, expect the EU to make further concession on the Irish backstop, but not until very much later when it is certain the deal will then be passed. It has been our reading that a permanent backstop is against the provisions of Art. 50, as a result of which it should be possible for the EU to give a legally binding commitment about the finality of the backstop without setting a concrete end date.

Wolfgang Munchau warns that the risks of a no-deal Brexit are far higher than people think right now, and not only because it is the legal default position. The position of continental leaders is often misunderstood in the UK. The EU would be very happy if Brexit were reversed, but the EU is not going to play to role of accomplice to any of the backbench schemers. May is their one and only interlocutor. We cannot see the EU granting an extension of Art. 50 at the request of the UK parliament if this request was not supported, politically, by May. Munchau's main point is that the no-deal Brexit is not the worst outcome for any of the decision-makers involved. For May and the Tories the worst would be no Brexit. Corbyn might actually be able to use a no-deal Brexit as a device to force elections. And Leo Varadkar can always blame a hard border on the British, which might be easier for him than compromising on the backstop. This is not so much a prediction of a no-deal Brexit, as merely a realisation that its probability is higher than widely assumed.

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