May 01, 2019
Labour votes against obligatory second referendum
It is interesting to see how the British media suddenly lost interest in Labour's decision on the second referendum, once the party's national executive committee voted in favour of Jeremy Corbyn's position not to change the party's current ambivalent policy. Yesterday's vote was a setback for the second-referendum campaign and specifically for Tom Watson, Labour's defiant deputy leader, who has argued in favour of an obligatory second referendum.
The vote in the NEC became necessary because of the upcoming European elections. Labour's European election manifesto will thus continue to support a second referendum only as a last option - if the Tories were to push through their own version of a future relationship or in case of a looming no-deal Brexit. Since neither has a political majority in the House of Commons, that situation is unlikely to arise.
Yesterday's vote has a number of consequences. A victory for the second-referendum supporters would have unleashed a shift in the political dynamics. A Labour victory in the upcoming European elections could have been interpreted as a political signal in favour of a Brexit reversal. The only parties now openly dedicated to reversing Brexit are the LibDems, Change UK and the Green Party, plus the SNP and the Welsh Nationalists.
The rejection of a second referendum also means that Labour is now less likely to change its policy before the next UK general election. The current policy would still allow Labour to support a second referendum, for example, if a new Tory leader were committed to a no-deal Brexit.
But the most important consequence of yesterday's vote is the impact on the cross-party talks. If the second referendum supporters had got their way, they would have been able to frustrate any version of Brexit this side of a general election.
Yesterday's decision to uphold Labour's ambivalent stance opens the way for a compromise. Theresa May said yesterday the talks with Labour would need to be concluded by the middle of next week. Labour is saying that the talks have been progressing well. We have noted before that the Brexit versions negotiated by May and the EU, and Labour's customs union, are not categorically as different as they may appear at first sight. On a technical level there is scope for a compromise, one that would allow Corbyn to claim that he managed to negotiate a customs union that protects the interests of UK workers and that protects the environment, an increasingly important subject in the Brexit debate. We think that May is ready to compromise - especially now that the future unity of the Tory party is no longer her main preoccupation.
In this context, we noted the lead story in the Daily Telegraph this morning, which says that Tory eurosceptics fear that May would cave into Labour's demands.
The main difficulty in these talks will be to find a majority of MPs to support any compromise. Second-referendum supporters have become increasingly extremist, to the point that they could reject a customs-union compromise. There are about 100 Labour MPs firmly committed to a second referendum. If they all were to refuse to endorse a deal, Corbyn would only deliver 140 votes or so in favour of a compromise, which means that May would need to deliver some 200 votes. That should be possible, but there are risks that Tory MPs might conclude that they are better off with a new leader and a new approach to Brexit. If both party leaders were to face simultaneous rebellions, a deal might be at risk.
We think, however, that Corbyn and May have a reasonable chance to deliver a joint majority in the House of Commons if they manage to agree among each other. May would be able to leave office having achieved her one and only political objective. Corbyn can focus on the social issues he likes to focus on, rather than Brexit. This is why we think the chances of a deal are higher than the zero percent probability UK political commentators are attaching to such an outcome.