March 13, 2019
Not really all that meaningful
It is interesting to note that there exists an inverse relationship in no-deal expectations: the more the UK rules it out, the more the EU expects it to happen. We are on the side of the EU. We are also alarmed whenever we hear soothing comments that backbenchers will in the end take no-deal off the table. What Brussels see in much sharper focus is that this is just an avoidance strategy. Since there is no majority for a long Brexit extension - i.e. a second referendum - Brussels concludes, logically, that the impasse would result in a no-deal Brexit.
It is not all over yet. The chances of the so-called Norway-Plus option have also risen. And Theresa May’s own deal is also not quite so dead as it seemed last night. A final meaningful vote is still possible, indeed likely.
There is a charming honesty in the precise wording of today’s motion - on taking no-deal off the table. It is worth savouring this for a while:
"This House declines to approve leaving the EU without a Withdrawal Agreement and a Framework on the Future Relationship on 29 March 2019; and notes that leaving without a deal remains the default in UK and EU law unless this House and the EU ratify an agreement."
They might as well have said: “Ceci n’est pas une pipe.”
We agree with Stephen Bush in the Spectator that the only way to take no deal off the table is with actual legislation - not a show of hands on silly motions and amendments. He notes that none of the MPs who have brought legislation forward to stop no deal have done anything even remotely close to that.
Today’s motion will, of course, pass. So will tomorrow’s meaningless vote on extending Art. 50. But Theresa May is right that the EU will not extend Art. 50 unconditionally, a message MPs find hard to understand.
She is also right when she said that the UK parliament would need to make a positive decision by March 299 between the known options: unilateral revocation, second referendum, Norway Plus, customs union. We expect to see a third and final meaningful vote in the last week of March. No matter what is decided, or not decided, inevitably there will be a short extension - of no longer than until May 22, and possibly a bit shorter for reasons we explained yesterday. This will be either to prepare for no-deal, or to make the necessary technical preparations if the deal is approved. A long extension is becoming increasingly unlikely since the EU would only agree to it if the UK were to propose a second referendum.
Despite the approaching deadline, Tory Brexiters are still chasing unicorns. Remember the Malthouse amendment? There is now the Malthouse compromise, which rests on the notion that the UK leaves the EU without a deal on May 22 and then start talks with the EU on the future relationship. We never cease to be amazed how UK parliamentarians keep on misreading the EU’s intentions and constraints. If the UK crashes out without a deal, the EU will insist that the content of the withdrawal agreement be unilaterally adopted by the UK as a condition for further talks. And yes, that includes the Irish backstop. In other words, the UK would effectively have to erect a customs border in the Irish channel before the EU starts any trade talks.
We see no majority in the UK Parliament for this nonsense, nor will there be any majority for the customs union, if only because this is the official position of the Labour Party. The UK Parliament will not revoke unilaterally without a second referendum, and there is no majority for that option either. The only conceivable alternative would be Norway-Plus, which has the additional advantage that it would be consistent with the withdrawal agreement and would only require changes to the political declaration. A Norway-Plus Brexit can be drafted relatively quickly, and we see no reason why such a deal cannot be reached before March 29 - with a subsequent short technical extension.
So this leaves us with the following sequences of meaningful events:
- indicative votes on the alternative options. If Norway Plus is close to a majority, Theresa May could proceed with it.
- If not, she will retable a meaningful vote in the last week of March.
- If parliament rejects for a third time, UK leaves EU without a deal, but with a short extension for preparations.
One other intruding event are elections. It is possible that Theresa May concludes that there is no alternative solution to get over the impasse than through elections.