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September 11, 2019

What are the chances of a deal?

There is something about the Labour Party’s rejection of early election that does not quite add up. The argument to reject immediate elections was to prevent a no-deal Brexit end-October. But surely the same argument will apply immediately afterwards: would Labour not want to prevent an end-January no-deal Brexit before agreeing to elections? A three-month extension does not resolve anything. It looks to us that Jeremy Corbyn really fell into an elephant trap, one that was laid out for him by his own party.

The Guardian has a story this morning trying to answer this riddle. The plan is for MPs to bring back Theresa May’s deal, to approve it, and then to subject it to a second referendum. 

Before we ask whether there is a majority for both steps, we should consider what this course of action would mean for elections. If the point is to frustrate a no-deal Brexit at all costs, this strategy would require that no elections to be held before the referendum. Otherwise, Boris Johnson could simply cancel the referendum if he were to win the elections. A referendum, especially a contested referendum, would take at least a year from start to finish. The strategy thus makes no sense except in one specific circumstance - that the House of Commons elects a government of national unity with the precise purpose to oversee this process from beginning to end. The hope is that this would finish off Corbyn and Johnson, as well as Brexit. 

Would such a course of action stand a chance?

The Benn bill to stop a no-deal Brexit passed the Commons with a majority of 327 to 299. But not everybody who opposes a no-deal Brexit supports a second referendum. Stephen Kinnock, for example, leads a group of Labour MPs who consider a second referendum as reckless as a no-deal Brexit, and who seek a compromise. Kenneth Clarke wants Johnson to agree a deal. He now sees a good chance that it would be supported by a cross-party majority of MPs. Clarke is no supporter of a second referendum either. Some of the recently expelled 21 Tory MPs - we reckon more than half - could be readmitted if they pledge to support the government from here onwards. No matter how you twist and turn this, there is simply no majority in the current parliament for a second referendum. The expulsion of the 21 Tory MPs has not fundamentally shifted the majorities, except that they now may feel free to vote against the government in areas not related to Brexit.

We see two routes with a similar outcome: the existing withdrawal agreement with a Northern-Ireland only backstop, followed by elections; or a court-enforced Brexit extension followed by elections, followed by a deal.

We don’t think that Johnson would at this stage try to circumvent the Benn extension bill, forcing through a no-deal Brexit and then facing the electorate in the chaotic days and weeks that would follow it. Even he has reportedly recognised that there are genuine risks associated with a no-deal Brexit. 

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