Endgame? Theresa May is in far more danger now than she was 48 hours ago

The edition of BVCA Insight published yesterday noted that the deal which Theresa May had struck on Tuesday afternoon was “subject in the first instance to Cabinet approval which may not prove straightforward”, that this was “still a very delicate process”, and that the stakes were “incredibly high at multiple levels over the next few weeks”. In retrospect, while all of the above were accurate, this was perhaps a fresh example of that most classically British of traits: masterful understatement.
The past 48 hours have been the most dramatic (and in many ways the most insane) since, well, the two days around 30 June 2016 when Michael Gove decided to stand against Boris Johnson for the leadership of the Conservative Party (despite technically being his campaign manager), forcing his former ally out of the race and ultimately paving the way for Theresa May to become the leader of the Conservative Party and hence Prime Minister, in the end without a ballot of party members. That was pretty wild stuff, but what we are on the edge of might well make all that look relatively tame.
The critical factor here is the resignation of Dominic Raab, the now former Brexit Secretary. He was and is the absolutely critical piece on the chess board. If he had stayed and better still had been a staunch advocate of the Brexit deal, then the original strategy of the Prime Minister - set out in BVCA Insight - of losing (or pulling out of) an initial vote on Brexit, returning to the EU Council in December for an additional concession and hoping to avoid having to sacrifice herself to carry the day, might well have had a respectable chance of prevailing. Without Raab, this approach is scarcely credible. Future historians of this period will doubtless scratch their heads and ask how she could possibly have accepted the draft agreement with officials negotiated by the EU without having shown him the full text in advance and being absolutely confident that he was completely on board with her.
For not only is Mr Raab important because of the office that he held, he is popular and respected by Conservative MPs and seen as an intelligent individual willing to act on principle. When Mrs May was first elevated to Prime Minister back in July 2016, she offered him a portfolio that he did not think he would fit and he returned to the backbenches. Not many ambitious Conservative MPs would do that. They would rather hang in there as Parliamentary Under Secretary for Rat Catching in the hope of a better portfolio next time.
Hence, Mr Raab’s decision to leave the Government will not be seen by his colleagues as a ‘cunning plan’, designed to ensure that he is the one who enters No 10 next (although that could indeed happen), but as the act of a reasonable man who has deduced that the Prime Minister has adopted a Brexit policy largely shaped by senior officials for whom the whole Brexit exercise is one of damage limitation with little sense that there may be sunny uplands. She (and they) might be correct in that assessment but it is toxic in terms of many Conservative MPs.
So, the risk for the Prime Minister is that there will be a vote of confidence in her leadership and that she might lose it or win by a margin that makes it impossible for her to continue effectively. This is because the centre ground among Conservative MPs may conclude that only a more pro-Brexit PM could extract enough additional material from the EU (even if largely symbolic) to allow a version of this Brexit accord to secure a majority in the House of Commons or, instead, opt for one of the three means of averting a No Deal Hard Brexit outcome, namely extending Article 50, finding a short-term sticking plaster solution to deal with the most pressing issues that a No Deal outcome would bring, or bouncing out of this Withdrawal Agreement into a limited membership of the EFTA pillar of the EEA. In a similar spirit, that middle rank of Conservative MPs might calculate that it would take the arrival of a different leader to convince the European Research Group in their brotherhood that the ‘phase two’ of the negotiations would be based on Canada +++ and not the Chequers Plan. If that become the prevailing sentiment by early next week then Mrs May will become political toast.
This is to leap ahead of fast evolving events. A few key questions can be addressed right now.
Will the Government fall? Will there be an imminent election?
The Prime Minister may well fall in weeks if not days but the Government is not about to collapse. The Conservative Party has a long history of being pretty brutal towards those who head it who are deemed to have reached their sell-by date. It has been called (correctly) an absolute monarchy that is tempered by regicide. No Tory leader since Stanley Baldwin in 1937 has left at a time entirely of their own choosing. Nor are the Democratic Unionist Party about to vote against the Conservatives in the sort of division required under the Fixed Term Parliament Act of 2011 to force an election. Any chance of handing the keys to Downing Street to Jeremy Corbyn is a risk too much for them to take. Besides which they could expect any successor to Mrs May to want to keep them sweet over Brexit.
There is, though, more chance of an election before 2022 if Mrs May is toppled than if she survives. A new Prime Minister who found even a convoluted means of extracting the UK from the EU on evenly marginally different terms to those on offer today would be aware as to how locked in they were by the present numbers in Parliament. If there were any indication in the opinion polls that a victory at the polls in May 2019 or 2020 was a probability, then it would be tempting to swallow hard, sink a stiff drink and aim for a short campaign that might deliver an outright majority. This is still, because of the disastrous precedent of 2017, a less than 50% shot but it is out there.
Are the chances of a complete No Deal and Hard Brexit increasing?
Yes, if only because of the pressure of time but they are still not much above the 10% margin. As noted above, there are a variety of ‘lifeboats’ which are still available: extending Article 50, a sticking plaster that is a de facto pre-transition period transition period (I appreciate that this sounds bonkers but we live in very strange times) or the dark horse of short-term EFTA/EEA membership.
All of them would be better than the sheer cliff edge of a disorderly departure from the EU in March. On that one, the UK and the EU-27 are privately united. Brussels would not receive its €39 billion and there would be chaos on both sides of the Channel. It could happen by accident but if anything the arrival of a new PM with a new party mandate should make that easier to avoid.
Is a second referendum more likely?
Again, yes but only slightly and not much above the 10% margin. The obstacles to it remain sizeable. The first is the need for an appropriate parliamentary instrument to impose it on the Government. It is not enough for MPs to back a motion of principle calling for another ballot. There has to be a law enacted with a specific question, a mechanism for the campaign to be conducted and a date. If the Government has no appetite for this then it is very hard to force its hand.
The second is the continued ambivalence of the highest ranks of the Labour Party for throwing their weight behind what is seen by many in Corbynland as a cause of upper middle class Blairites. Even if Jeremy Corbyn switched tack and backed it (and he has performed many a pivot on Brexit) it is far from certain that enough Labour MPs would follow him. Some two-thirds of those MPs represent seats which voted Leave in June 2016.
Finally, are there enough Conservative MPs willing to defy the vast majority of their own party and align with Labour on this matter? The number of Conservative MPs on the record as favouring another plebiscite is still less than double figures. That is not many.
It is fasten your seat belts time again in British politics. A country seen (in truth, falsely) as a model of a stability by international standards has been in a rollercoaster state since the closely contested Scottish referendum of September 2014. Another endgame that fails to end the game is coming.
Tim Hames
Director General, BVCA