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February 18, 2019

How the splits on the left and the right will affect Brexit

There are two important developments going on in UK politics right now with the potential to influence the Brexit outcome: a split in the Labour Party and the fast rise in the membership of Nigel Farage's new Brexit party. 

As we are nearing a number of important votes, it appears now increasingly probable that the split in the Labour Party will finally happen. Paul Brand from ITV says the most likely date is February 27, the date for the next big Brexit debates, but it could be later. The decision seems to have been taken, the argument is about timing. The rebels want to get more Labour MPs on their side. The delay suggests that they have not succeed so far, beyond a core group of around five or six MPs around Chuka Umunna, who has been one of the most outspoken advocates of a second referendum campaign.

A break-away would not directly affect the balance of votes in the Commons, but would weaken the second referendum caucus in the Labour Party. The substantive dispute is about Labour's strategy in the run-up to the meaningful vote. Umunna argues - correctly in our view - that it is wrong to think about Brexit as a process that will invariably lead to a final trade-off between no-deal and second referendum. This has been the prayer of the second referendum advocates. The problem with that strategy is that May pursues the same idea by running down the clock, and confronting parliament with the alternatives between deal-vs-no-deal, which has prompted Ummuna's action. As one of us argued this morning, the chances of a no-deal Brexit remain significant. We remain sceptical that Cooper's wrecking amendment will manage to achieve its goal even if passed in the Commons.

The second strand in British politics with a potential effect on the Brexit outcome is the incredibly fast rise of the Brexit party - now with 100,000 members as the Sun reports. As of April 2018, the Tory Party membership was 124,000. While the Brexit party is still little more than a movement, the Tories are acutely aware of the danger this party poses to their future prospects. If Brexit were to result in a combination of a long delay and new elections, we would expect the Brexit party to destroy the narrow Tory majorities in a large number of marginal seats, thus paving the way for a large Corbyn-led majority. We note that none of this is yet reflected in the opinion polls. The most interesting aspect of the opinion polls right now is their volatility, with jumps of 7 points in either direction over short periods of time. This is telling us that the situation is highly volatile.

We also note that two pro-European Tories, Sir Alan Duncan and Sarah Wollaston, are facing deselection campaigns by their local constituencies. Anybody who predicts the size of rebellion would have to take into account this push-back from constituencies. This is why we treat reports of mass resignations from the government with great caution.

Both of these political developments - the splits of the left and the right - favour a workable House of Commons compromise on the Brexit deal. On the left it weakens the hardcore pro-European wing. And on the right, it reduces the incentive of pro-EU MPs to opt for a Brexit extension without a concrete alternative.

We also note that the Sun has come out in favour of May's deal, arguing that the Tories would face a political catastrophe if they failed to endorse it. The pressure is clearly on.

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