Hell Week Part II: Will Theresa May come through to do a Brexit deal?
Theresa May’s week of increasingly high-volume pressure from her own party risks obscuring the bigger picture: the Prime Minister is still heading for a deal, but probably not before December. The risks to that deal are all seen to lie within the UK. No10 as well as EU capitals are focusing on whether the emerging deal, though not yet done, can get through the UK Parliament – and do so without destroying the Prime Minister and the government in the process.
Why is the discontent with Mrs May so close to boiling over?
Conservative MPs see more and more clearly the binary Brexit choice which the UK faces: in order to secure any deal with the EU, the UK will have to commit to either Northern Ireland, or the UK as a whole, following EU rules on the Single Market and customs union indefinitely. No other option will prevent a hard border on the island of Ireland, which – in support of Ireland – is the EU’s remaining condition for a deal. The question is not whether the UK stays in a customs union, but where does – just Northern Ireland, or the UK as a whole? The Prime Minister still resists this conclusion, saying that a Northern Ireland backstop which includes customs would “divide our country in two”; a UK-wide customs solution meanwhile rules out independent trade deals, which have become a totemic symbol of Brexit.
To avoid that painful choice, Conservative MPs are openly challenging the Prime Minister to change tack in negotiations. Hard Brexiteers argue that Mrs May should shift to seek a Canada-style Free Trade Deal. But this rests on the fantasy that the EU, preferring this outcome, would abandon Ireland in order to bank it. A growing spectrum of Tory opinion instead backs the idea of ‘parking’ in a Norway-style ‘EEA’ model; for hard Brexiteers this would be a stepping stone to a Canada-style deal. There are legal problems with that idea, but the EU is in any case unlikely to provide an open-ended soft landing while the UK openly prepares to become a regulatory competitor. Both of these alternatives share two fundamental flaws: neither is negotiable with the EU without a Northern Ireland backstop; and Theresa May remains determined to pursue her own course towards a deal, as she showed in yesterday’s statement to the Commons, which offered no sign of a change of course. Opponents in her own party increasingly recognise that they will need to remove her if they want a different Brexit deal.
How far will disaffected Tory MPs go?
Mrs May has come through Monday’s Parliamentary debate on last week’s no progress EU summit and Tuesday’s Cabinet unscathed. On Wednesday, she faces a meeting of the backbench 1922 Committee on Wednesday. Feeling in the party is hardening against her style, amid allegations of duplicity, as much as her Brexit policy. It is possible that the dissatisfaction could finally spill over, reaching the threshold of 48 MP letters needed to trigger a leadership contest. If that happens, Mrs May would likely – but not certainly – win the confidence vote which follows; 159 Conservative MPs would need to vote against her and many will pull back, fearing the party infighting and general election which might follow. If she won, then under the party’s rules she would be safe from challenge for a year.
However, even if she can avoid an open leadership challenge, Mrs May’s path to a Brexit deal has narrowed. The DUP are now publicly opposed to any negotiable Irish border backstop. The ERG hard Brexiteer backbenchers are confident they have enough MPs to vote down a ‘sell out’ deal – in particular any deal which keeps the UK in a customs union without a clear exit path, or which ties the future deal to the Chequers compromises. Now the Scottish Conservatives have said that they cannot accept any deal which creates a special status for Northern Ireland, which the SNP would then demand for Scotland. If Mrs May cannot solve this wider Unionist problem, and persuade the DUP to back a deal, she will be dependent on perhaps twenty or more Labour MPs voting for a deal to get it through Parliament. This will not be easy. Even the most pragmatic, Blairite Labour MPs seem currently unwilling to help Theresa May out of a problem of their own making.
Key to the final vote will be business and others to bring home the risks of a no deal outcome to bring MPs back into line behind a deal. The current clamour within the Tory party hides a further reality – most MPs actively want to avoid no deal. Even the hard Brexiteers of the European Research Group, corralled by former deputy Brexit Minister Steve Baker, now avoid talk that no deal would be “perfectly manageable”. Baker recognises that the mood of Tory backbenchers is against it, and that the Commons as a whole might intervene to demand compromises if we seemed to heading for that outcome. That might open up the prospect of a new referendum, and put Brexit as a whole at risk.
Despite the noise, the likelihood remains that her party will let Theresa May reach a deal on her own terms, and put it to Parliament. But this will be a hand to mouth exercise, with businesses asked by the Government to spell out to MPs the consequences of no deal. A deal is unlikely before December. This far out, the Parliamentary vote remains too close to call.
By Lexington’s Senior Brexit Counsel Paul McGrade
For more information about how Lexington’s Brexit experts can support you please contact: Declan.McHugh@lexcomm.co.uk