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June 13, 2019

On the large and rising risk of a no-deal Brexit

Whenever you hear a journalist, commentator or  politician say the UK parliament will block a no-deal Brexit, stop reading or listening immediately. By triggering Article 50, the UK parliament already legislated for a no-deal Brexit as the default option. All the rest is noise.

Yesterday's vote against the Corbyn-Letwin initiative to seize power of the legislative agenda for a singe won't change it. The only - positive - effect it could stop a few more people from deluding themselves. But it does not change reality. The idea behind Corbyn-Letwin was to agree on a strategy to prevent a no-deal Brexit, for example by making it illegal for the government to prorogue, or suspend, the House of Commons. 

Article 50 makes it clear that there is only a single strategy available to the British parliament to avoid a no-deal Brexit - to revoke Brexit altogether. But, even if yesterday's motion had been agreed by a small majority, there would still have been no majority for revocation. The EU would probably give the UK time for a second referendum. We think that would be a mistake, but this is a moot point since there is no Commons majority for a second referendum either. 

We have been saying for the last few months that the markets are underestimating the probability of a no-deal Brexit. We noted that Sir Ivan Rodgers was saying exactly the same. The Times quotes him as saying that the commentariat had misread the chances of a no-deal Brexit. The reason he gives is that EU governments are not willing to play the extension game any longer. Another reason, more important we think, is that extension is proving extremely toxic for UK politics. 

Boris Johnson is right, of course, when he says the Tories will become politically extinct if they don't deliver Brexit in October. We think there is still a chance for the House of Commons to pass a deal, but this critically requires that the final choice is deal versus no deal. It was Theresa May's political and intellectual failure to have ruled out a no-deal Brexit and to frame the choice as deal vs. no Brexit. This is why she could never deliver her own treaty. The majority in the Commons is pro-Remain. No Brexit is not a threat to them. And Tory hardliners did not think her threat was credible. It is true both sides cannot be right simultaneously. But the delusion of one of them was enough to sink the deal.

We don't think yesterday's vote made a lot of actual difference simply because the legal reality under Art. 50 remains unchanged. Dominic Grieve, probably the most prominent and intelligent anti-Brexit campaigner in the Tory party, was right yesterday to acknowledge this reality last night. We think he is wrong when he says that the only way to stop a no-deal Brexit is a vote of no confidence. 

First of all, we are not sure that a vote of no confidence would necessarily produce a majority. Many MPs, especially Independents and Tory rebels including Grieve himself, would end their political careers as they would be certain to lose their seats in the subsequent general election. 

Secondly, even a successful vote on a no-confidence motion may fail to do the trick. A prime minister hellbent on delivering Brexit before the election is under no legal obligation to ask the EU for an extension. There is an argument that it would be the better option for a Tory prime minister, under pressure from the Brexit Party, to allow a no-deal Brexit to happen in the middle of an election campaign. Unless the House of Commons secures a vote of no confidence in late July, we see no realistic chance of elections being held before the October deadline. If MPs were to trigger this after mid-September, parliament would be dissolved before the October deadline, but reconstituted afterwards. The assumption that a no-confidence motion would stop a no-deal Brexit thus critically relies on the co-operation of a prime minister. If the prime minister does not co-operate, a vote of no-confidence might actually trigger a no-deal Brexit. 

We would not rule out that political circumstances might lead a prime minister to ask the EU for a short delay. The EU would grant it. But our overall point is that the House of Commons is not the main actor in this process.

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June 13, 2019

Unite and divide - Act II of Edouard Philippe

Edouard Philippe pressed the reset button to relaunch the road map for the second half of Macron's presidency. After seven months of standstill during the gilets jaunes protests, the message is to get the reform engine back into action. His speech in the assembly offered something for everyone for the left and the right: a 100% recycling target and other green measures as a new priority in government politics, tax cuts, and incentives to retire later and work longer. What commentators picked up on was an opening bid towards the left, with the emphasis on social justice and more rights: Unemployment benefits to be scaled back for high earners who lose their jobs. He also pledged to stop some monthly benefits for people made redundant exceeding their monthly salary. And he promised the right to a medically assisted procreation (PMA) for lesbians and single women to be debated in autumn.

The left was unimpressed. In the no-confidence vote that followed Philippe's speech, Socialists unanimously voted against the government. Two years ago three had voted in favour and 23 abstained. Philippe got 363 votes, only slightly lower than the 370 he got at the beginning of Emmanuel Macron's presidency in 2017.

Today he will hold a no-confidence vote in the senate, a rare move in the history of the fifth republic. Not that the senate vote is in any way legally binding, only the assembly can send the government home. Philippe stands no chance to win the vote, as the senate is in the hands of Les Républicains. But it allows at least two things: One is that he can revive the debate about the constitutional reform for which he will need the support of the conservatives. The other is to prepare the territory for the municipal elections. How many of the senators from Les Républicains can Philippe count on? If he gets a couple of abstentions that would already matter and allow the executive to work its way up from there. 

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