Recent votes in Parliament prove that it is no more capable of agreeing where to go next on Brexit than the UK cabinet. As Theresa May creates the temporary illusion of party unity, a no-deal Brexit grows ever closer, writes John Ryan (LSE). However, the political fallout associated with the economic hit of No Deal – or any form of harder Brexit – should not be underestimated, he warns.
The House of Commons voted last week 317 to 301 in favour of the amendment tabled by Conservative MP Graham Brady and backed by the government, which calls for the Irish backstop in the Withdrawal Agreement to be replaced with “alternative arrangements.” Meanwhile, Conservative MP Caroline Spelman’s amendment, which stated that the UK should not leave the EU without a deal, but which has no legislative force, was passed by 318 votes to 310.
The most critical amendment in the UK Parliament last Tuesday evening was the conservative party former Attorney General Dominic Grieve’s “take back control” amendment which was defeated 321-301 – a majority of 20 against giving MPs six days to take control of the parliamentary timetable from the government to debate Brexit and alternative forms of Brexit. The Labour MP Yvette Cooper amendment, which was intended to enable the Commons to vote to block a No Deal Brexit, was defeated by 321 votes to 298 – a majority of 23. All this means that Theresa May will be sent back to Brussels to negotiate the impossible.
Following last week’s vote in Parliament, a spokesman for European Council President Donald Tusk said, “The Withdrawal Agreement is, and remains, the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union,” adding, “The backstop is part of the Withdrawal Agreement, and the Withdrawal Agreement is not open for renegotiation.” Theresa May has been warned by the Irish government that there is no chance of the backstop being changed or removed from the withdrawal agreement. Simon Coveney, the Irish Foreign Affairs minister and deputy Prime Minister, has dismissed suggestions that the European Union could remove the insurance policy, warning that “Ireland will insist on the United Kingdom keeping its word.” Coveney had stated that the backstop was not up for discussion, warning that replacing it with an “aspirational hope” was not a “reasonable” approach. The European Parliament has also been clear in stating repeatedly that it would not support a withdrawal agreement without a backstop in it.
The great hope of the business community is that MPs of all parties, who fear No Deal, will come together to stop it. The votes so far show that Parliament is not capable of agreeing where to go next on Brexit any more than the UK government’s Cabinet is.
While neither Parliament nor government wants no deal, it remains the default outcome. Unless Britain revokes Article 50, the EU agrees to extend the Brexit deadline beyond 29th March or a satisfactory agreement between the UK and EU is found, the UK will leave the EU without an agreement in place. While this would leave the UK free to pursue a domestic and international agenda without hindrance by EU rules, the immediate disruption, an unavoidable hard border between Northern Ireland and Ireland will make for a very uncomfortable position economically and politically.
The political fallout associated with the economic hit of No Deal – or any form of harder Brexit – should not be underestimated. There is a range of different ways to forecast the cost of hard Brexit scenarios. We know that higher barriers to trade, investment and migration will damage UK productivity growth; or that British consumers will be forced to buy more expensive imports or lower quality British alternatives, hitting living standards. It will probably be a mix of the two, but that mix is hard to quantify. What is more, the Brexit referendum in 2016 coincided with robust global growth. With signs of a slowing global – and European – economy, the costs of Brexit would be more acute. The immediate damage would be enormous, if only because of the uncertainty and the lack of preparation, both among governments and companies both in Britain and the EU.
A no-deal Brexit can only be stopped if UK MPs come together around a positive majority for another solution. Then it would be possible to request an extension to Article 50 to allow the UK to continue to develop its preferred outcome. The defeats of the Grieve and Cooper amendments suggests MPs are willing to give Theresa May more time to find a deal that can command a majority.
UK politics is in turmoil and in a chronic crisis. The phenomenon of British exceptionalism towards the EU is set to take a new dramatic turn, while the UK’s chaotic political divisions will not disappear any time soon. The Prime Minister also promised yesterday to make a statement to MPs no later than February 13 – and put it to the vote the following day – St Valentine’s Day in the UK. If she proposes the same deal that MPs rejected two weeks ago, perhaps with a few minor changes she will be attacked by all sides. MPs may start to change their votes towards avoiding a no deal scenario. The clock is ticking and time is running out for the UK and the EU.
May yesterday built a temporary sense of unity in her own party by capitulating to Brexiteers demands, but in reality, raised expectations that she can get substantive compromises from the EU on the Irish backstop are illusionary. The contradictory positions that May has taken over the last few weeks have damaged the level of trust that the EU 27 had in her ability to avoid a No Deal Brexit by accident. The EU 27 has stayed united so far but may feel the pressure as a no Deal Brexit becomes a reality. The endgame is emerging and the conservative government and their media supporters will prepare the ground to blame the EU as the culprit for the impending No Deal. For many observers in the UK and EU, the unity of the conservative party seems to be more important the UK government than guarding the national interest.
John Ryan is a Visiting Fellow at LSE IDEAS. He was a fellow at the St Edmund’s College, University of Cambridge and the German Institute for International and Security Affairs, Berlin, Germany. John is working as a senior partner in consultancy as a Brexit adviser for EU, Gulf and Asian clients.