March 08, 2019
A hard-Brexit scenario
The big difficulty we and all other analysts have with Brexit is that none of us really knows what is going on inside Theresa May's head. The few accounts we have read that claim to have special cerebral insights contradict each other. A second-best strategy is to rely on her revealed preferences. She has changed her views many times, but has been doggedly persistently in her strategy of running down the clock.
So, how about this version of a hard Brexit? Next week's votes go as expected. The meaningful vote is another No - with a smaller margin. It will be followed by two meaningless votes the following day on whether to take no-deal off the table and whether to ask for an extension. Of course, MPs will take no-deal off the imaginary table, and of course they will want to extend. By the end of next week, Brexit will be 14 days away.
14 is an important number. It takes 14 days for parliament to replace a prime minister through a vote of no-confidence. Come Friday evening next week, May can do pretty much whatever she likes. After she won the Tory leadership contest in December, neither the Tory Party nor the House of Commons have any tools to stop a no-deal Brexit. 14 days is also not enough time to pass legislation without government support.
Now assume the following sequence of events. May will announce a final attempt to rescue the deal. She will make another proposal to discuss Brexit at or around the summit - which starts eight days before Brexit. The goal is to confront everybody with a choice between a revised deal or a crash.
We admit that this sounds cold-blooded. The Cooper amendment would have prevented that course of action. But May would still be acting, at least formally, in accordance with the outcome of next week's vote. She does not have to ask for an extension until 10.59pm UK time on March 29. And, by tabling a third meaningful vote, she would have given parliament a final chance to comply with its own wish to take no-deal off the table.
It is possible that she may confront the European Council with an ultimatum on the backstop. In this context we noted a small story about industrial action by French customs officials, who are warning of huge queues in case of a no-deal Brexit, and who are saying that the French government has made inadequate preparations. As ever the protests also have a lot to do with working conditions, but we would agree with the overall assertion that the EU is just as unprepared for no-deal as the UK. The Federation of German Industry, one of the cheerleaders of the European Commission's approach to the Brexit negotiations, noted with horror that a quarter of German companies responded in a survey that they are planning job cuts as a result of a hard Brexit.
Again, we don't know what is going on in May's head. But if she wanted to she could deliver a hard Brexit on March 29, or blackmail the European Council, the House of Commons or both to back her deal, followed by a very short technical extension.
This is not a prediction. But we consider this scenario more plausible than a long extension, let alone a second referendum. In short any option that relies on non-existing political majorities. And it is consistent with what we know.