Long and Winding Road. There are many twists and turns in the Brexit saga left to come

For the Prime Minister, Cabinet, Government, Parliament and indeed the rest of us, the final stages of the Brexit negotiations are turning into a collective version of Chinese water torture.
A week or so ago, it looked as if matters had narrowed to the admittedly very awkward sub-question of the infamous Irish border issue - namely how to find a form of words which reconciled the desire of the UK to have some form of ‘escape clause’ to ensure that the temporary UK-wide customs union with the European Union envisaged in the ‘backstop’ did not become impossible to release itself from - and the equally forceful demand of the EU-27, not least Dublin, that the UK could not unilaterally walk away from the commitments that it had made to avoid a hard border in all circumstances.
Yet if anything, the negotiations became more challenging in the first week of November. This is due to a series of factors, some of which will prove to be more serious than others. First, there is dissent at the UK Cabinet level. Second, those aspects of the emerging treaty designed to cope with how the economic integrity of Northern Ireland would be maintained within the ‘backstop’, which appeared to have been addressed by a complicated (if expensive) compromise, now appear to be threatened again by sections of the Democratic Unionist Party which believe their leadership should be driving for a harder bargain.
Third, when there was the slightest hint that the Irish Government might be willing to bend a little to accommodate the UK on the ‘escape clause’ matter, the opposition in the Dáil went into an overdrive of apoplexy in a chamber in which the governing party is in the minority.
Fourth, the French and German administrations which, until now, had been willing to allow Michel Barnier to conduct his deliberations in complete secrecy, started to insist on knowing far more about the details of how the all UK-wide customs union might operate and sought concessions on other matters as varied as state aid rules and fishing rights as additional bargaining chips. Finally, the sheer pressure of time is taking its toll and disproportionately on those who are working for the UK side.
Despite all of this, there does now appear to be a breakthrough. It is subject in the first instance to Cabinet approval which may not prove straightforward. It offers the reward of a special EU summit on Sunday 25 November to sign it off. That date is pivotal as it is the one before those EU leaders who are part of the G20 need to fly to its annual meeting, which is located this year, somewhat inconveniently as well as ironically allowing for the economic woes of the hosts, in Argentina.
But if that scenario is to play itself out, then the essentials of this deal have to hold together not only in London and Brussels but a number of other EU capitals. This is still a very delicate process. Making sure that the special summit occurs before the EU Council on 14 and 15 December is crucial. Anything which knocked that schedule off course would have profound political implications.
All of which is reinforcing the difficulties endured by Theresa May and her colleagues. It is taxing enough to be involved in a negotiating process that is at core 1 v 27 (and despite the best efforts of the UK, the 27 have not split on anything of significance). It is even harder when the timetable of one of the two parliaments that has to endorse the final understanding for it to be legally approved (the UK) is so much more of an issue than it is for the other one (the European Parliament). The blunt truth is that the Prime Minister needs an accord well in advance of the EU Council in December while the EU-27 side is not so constrained.
As will be set out below, it is the House of Commons and its procedures that is becoming the key factor. The immensely complicated task of managing MPs on Brexit was demonstrated again yesterday as ministers were compelled to concede what is an unprecedented degree of public scrutiny to what has traditionally been the immensely private question of the legal advice that it receives. The willingness of the DUP and the pro-Brexit European Research Group of Conservative MPs to undermine the Cabinet on this was a shot across the bows.
Why is the timing of the vote in the House of Commons so important?
If the Prime Minister had either a united Conservative Party, a pliant DUP, a majority large enough to see off all dissidents among her MPs, a Labour Party willing to back her ‘in the national interest’ or some other source of votes among the remaining parties, then she would not be in such an exposed situation. She has none of those advantages. She appreciates, therefore, that she is unlikely to strike a bargain with the EU-27 which she can be confident will be embraced by a majority in the House of Commons the first time. The chances are that one of the DUP, the small but still consequential ‘Pro-Remain’ section of Conservative MPs, or the much larger ‘Brexit Purist’ segment of her own party, will rebel against Deal 1.0 if only to demonstrate their importance to the whole process.
For that reason, Downing Street needed an agreement to be reached in advance of the December Council so that it can take it to a vote before that meeting, and, if it is obvious that it is about to be defeated, either to let that hit occur or pull the legislation from the House, so that it can return to the EU at the 14-15 December conclave and obtain something else to add to the agreement.
Only then, having offered a bounty to the rebels in order to allow them to lay down their arms, could it come back to Parliament, ideally in the few days that would be left before Christmas, and produce a Deal 2.0 (which would probably look very similar to Deal 1.0, but never mind) and carry the day, or, if that timing were just too tight and the numbers too uncertain, return in early January and win by reducing the entire argument down to a choice between a Deal 2.0 and a full-blown ‘No Deal’.
If there were no special summit before 14 December, any ‘two bites of the cherry’ approach would be much harder to pull off as an additional meeting to allow for a Deal 2.0 would have to be found in January when the EU-27 may be disinclined to be of assistance on either the date or an amendment.
Will Deal 2.0 versus No Deal work in terms of delivering a House of Commons majority?
Probably but not certainly. The risk is that there are alternatives to No Deal if Deal 2.0 (in reality Deal 1.1) is rejected, even if the Government insists that it will not contemplate any such concept. There are at least three means of swerving the bullet.
The first would be to apply for an extension of Article 50 to allow for more negotiations. This would have the very severe political drawback (for the Conservative Party) of delaying the point at which the UK constitutionally departed from the EU, but it is a practical option.
The second would be a sort of sticking plaster in which the UK exited from the EU on the anticipated date, but there was a short-term deal (lasting six to nine months) that covered the basics in terms of logistics and transportation so that the more Apocalypse Now aspects of a No Deal Brexit (no food, no medicine, no cheap flights etc) were avoided.
The third, and the one that is acquiring serious traction, would be for the UK to avert all of the above and buy more time by becoming part of the EFTA pillar of the European Economic Area for a two-year transition.
What else might be needed to make a Deal 1.0 or 2.0 pass Parliament?
Now we get to the brutal part. If the space to reach a Deal 2.0 as outlined above is not there, or the resistance to it within the Conservative Party proves insurmountable, then there is one and only one additional card that could be played to ensure that the Withdrawal Agreement is enacted. This is for the Prime Minister to make clear that she will stand down not long after the UK quits the EU and so the Conservative Party can hold a leadership election which will determine its stance for what will be ‘Phase Two’ of the departure deliberations to be conducted during 2019 and 2020.
If Mrs May says she will walk the plank that would almost certainly convince her parliamentary party to accept a deal now that it does not like in the hope of finding a Canada+++ accord with the EU that it prefers later. All of which explains why the stakes are so incredibly high at multiple levels over the coming weeks.
Tim Hames
Director General, BVCA