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Brexit is binary but not yet

, August 17, 2018, 0 Comments

uk-eu-single-market-trade-deals-brexit-marketexpress-inI think most people would agree that the Brexit process has not gone well so far. However, blaming Mrs May and her hapless ministers is perhaps too simple an explanation.

After 45 years of integration it was always going to be difficult to disentangle the UK from its political, legal and commercial ties. Difficult but not impossible, provided a proper amount of time was given to achieve it.Where the politicians on all sides have fallen down is that they seem not to have realised the scale of the challenges. The UK Government’s worst crime, however, is failing to understand that the EU functions through legal treaties that cannot be changed easily, if at all. This bureaucratic rigidity may be a good reason to want to leave but it also explains why there was never any chance of a favourable response to UK demands for ‘exceptional’ arrangements. There never was the possibility of success for the infamous ‘cake and eat’ approach to the negotiations. The only things that the EU can be flexible over is timing and UK collaboration with or membership of certain important EU agencies.

On the timing front, the EU can, and almost certainly will, invite the withdrawal of the Article 50 notice to allow the UK more time to consider which of 3 standard models it wishes to pursue (WTO rules, Customs Union or EEA) and failing that, offer an extension of a transition period towards a vague trade deal, which would end up as WTO rules (with Northern Ireland being sacrificed). This will represent a major failure by Mrs May and could well make her feel obliged to step down before she is pushed.

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Should, however, Mrs May feel it her duty to carry on she is unlikely to win a vote on anything she proposes. It will be no consolation for her to know that Mr Corby will be facing a dilemma of his own. In the unlikely event of Mrs May’s proposing a withdrawal of Article 50 Notice, in opposing her he would have to march through the same lobby as Tory diehards whilst watching half or more of his own MPs giving the Government a majority. If on the other hand she did so propose, supporting Mrs May could well reduce the chances of Brexit happening at all, which would not fit in with his Socialist aspirations. In contrast, a decision by Mrs May to aim for WTO rules would suit Mr Corbyn nicely but would likely be thwarted by a mass rebellion of his MPs. These votes will have to take place well before March 2019 and Mrs May will surely have to step down on losing them, if she had not already done so.

A new Tory Leader would face the same Parliamentary arithmetic but have a lot more flexibility provided they had campaigned on the basis that more time was necessary. Tory Party members might well prefer Boris Johnson or Jacob Rees-Mogg but it is Tory MPs who get to pick the two run-off candidates and they are likely to go for pragmatic Leavers such as Sajid Javid or Jeremy Hunt, both (intriguingly) recent ‘converts’. Whoever wins, the campaign is likely to embolden Remainer Tory MPs who have already rebelled and also those who would like to do so. The new Leader should be able, with a heavy heart and straight face, to propose withdrawing Article 50 Notice before March 2019 and this time Mr Corbyn really would have to go along with it.

If on the other hand the New Tory Leader sticks with leaving in March then Parliament is likely to insist on EEA membership, which Mr Corbyn would also have to go along with. If the new Leader did not wish to accept that EEA vote (Messrs Javid and Hunt would surely accept with relief) there would have to be a General Election and it is hard to see a divided Tory Party getting a new majority. Labour ought to stand a better chance but Mr Corbyn is an improbable winner. It may be then that a Second Referendum looms as a way of resolving the divisions in Parliament. Out of all the political shenanigans will emerge a binary choice for Parliament or, if it prefers to duck the issue, for the voters: either a move towards WTO rules after a transition period extended beyond the end of 2020 (Figure 2) or not leaving (staying in the EEA would count).