Strike Three. A long extension of Article 50, a temporary fix and an early election are on the cards

It was on this day 45 years ago that the Terracotta Army were discovered in China. Theresa May has spent the past 48 hours hoping that her own band of warriors, consisting either of the DUP/ERG or Labour MPs from Leave constituencies, would emerge to save the day for her Brexit deal. She was determined that the House of Commons should at least seek to meet the first deadline that the EU Council had set last week and endorse the Withdrawal Agreement before 11pm tonight. If that had occurred then a relatively smooth (if procedurally hectic) Brexit would have taken place on 22 May, after which, and with a degree of dignity and belated political success, she would have announced her resignation in late May and stayed in 10 Downing Street until a new leader was chosen in early July.
All of that is now irrelevant. The vote (286-344) was closer than the crushing margins of defeat of 230 votes and 149 votes that the Government had suffered earlier. Stripping the political declaration from the Withdrawal Agreement was a pretty dubious trick as a process, and a controversial one as a matter of law. That would have been forgotten if even a tiny majority of MPs had backed the PM.
As matters developed at Westminster today, however, the two fundamentals of this saga held firm. The DUP would not support the Withdrawal Agreement while there was a risk of an indefinite backstop or of Northern Ireland being in a different regulatory and trading place than the rest of the country. There were not enough incentives for sizeable numbers of Labour MPs to support the Government. In baseball terms, this was strike three for the UK-EU Withdrawal Agreement and hence it is out.
So, where do we go from here then?
A longer extension of Article 50
The comparatively close numbers in the division lobbies today might lead ministers to look around for yet another device for returning the Withdrawal Agreement to the House of Commons, and hope that were it to be passed late, but before the 12 April deadline set by the EU Council for the UK to provide it with an answer as to what to do next, that it still might pass muster. It is an option that is theoretically in play for another fortnight – although it would require bending a lot of rules – but it is hard to see what might change to allow either the DUP or enough Labour MPs to alter stance.
The one move that might work would be if the EU were to change tack and come back with a plausible ultimatum of a no-deal exit on 22 May if the Withdrawal Agreement were not adopted by 12 April That cannot be completely discounted (although Dublin would be desperate to avoid the slightest risk of an accidental no-deal scenario) and would take us squarely into Russian Roulette territory.
The more likely next move is that the second of the two possibilities set out by the EU last week is exercised. This would allow for a significant extension of Article 50 (to the end of December this year or the end of March next year) to allow a new Prime Minister to explore a new strategy. This would entail the UK participating in the elections for the European Parliament due this May. That is not an attractive prospect as turnout would be relatively low, the tone of the campaign bloody and the two ‘extremes’ in this debate – ‘No Brexit’ in the form of The Independent Group/Change UK and ‘No Deal’ in the shape of the Brexit Party being led by Nigel Farage - would probably both do well and each would claim a popular mandate for their (very different) cause.
One wonders whether the EU and UK might see some virtue in rushing through legislation in the UK Parliament and European Parliament to avoid that state of affairs, although this would be legally complex and spark outrage in certain quarters. Regardless of this (and the existence of European Parliament elections makes the timing of the Conservative Party leadership election more awkward too), a long extension beckons. Whether this would provide a degree of certainty or a new form of uncertainty is another matter.
A temporary fix?
The House of Commons will on Monday return to the task of finding whether there is any formula for Brexit that might acquire the positive support of a majority at Westminster. As BVCA Insight observed yesterday (this was never meant to be a daily publication) the indicative votes held on Wednesday do not suggest that there is stalemate on this front or that it is a doomed enterprise. There is a hidden majority for a Customs Union and also probably for Common Market 2.0, a.k.a. ‘Norway Plus’, but for it to emerge into the sunlight like a Terracotta Army of its own, those whose strong first preference is for a second referendum have to be convinced to vote for a soft Brexit.
This could conceivably happen on a temporary basis. It could be the case that a Norway-like pact might replace the Withdrawal Agreement and come into effect from the moment that the UK left the political institutions of the EU in January 2020 or Spring 2020. It would last until the ‘end state’ agreement with the EU was concluded and implemented.
This would present the danger, though, of a UK-wide version of the Irish backstop dilemma with it being possible that the UK was ‘trapped’ inside the Single Market and the Customs Union for years on end while the ‘end state’ deliberations dragged on with no unilateral exit mechanism bar crashing out at some point into WTO rules. This notion would not, to put it mildly, be received ecstatically by many Conservative MPs (although it might satisfy the DUP as Northern Ireland would be in the same boat as Great Britain) but it could be sold as better than simply staying in the EU until an ‘end state’ solution had finally been secured.
To come to pass, nevertheless, would demand the collaboration of the Government. The thesis that Parliament could seize the rulebook, make time available to pass legislation that the executive did not want and conspire with the House of Lords to enact it is a very wild one. Who on Earth would then conduct the negotiations with the EU to bring this new accord into effect? The Cabinet and the wider Government would have to be on side, and the political reality is that if the Conservative Party is not to implode entirely then any short-term scheme would have to be temporary and provisional.
An earlier leadership election followed by an earlier general election
The above implies a return to the hustings earlier than anticipated. As noted earlier, Mrs May had wanted to remain in office for a few months longer before her resignation and final departure. In the days to come she might make one last scramble for a device to restore the Withdrawal Agreement as described beforehand but this is looking like an exceptionally long shot. Cabinet may well drop it.
In which case, Mrs May will not be waiting until the end of May to resign but will do so by the middle of next month (perhaps even next week). That will trigger the first stage of a leadership campaign in which Conservative MPs will whittle what could be a long list of names down to two contenders in a series of exhaustive ballots. Those two individuals will then be sent to the wider party membership (which is not that wide or indeed deep) for the concluding stage of the election. The exact timing of this is rendered something of a headache both by the local elections on 2 May and the European Parliament election, if it occurs, on 23 May. By the middle to end of the month of May, a new PM will be known.
The new PM might rightly calculate that they have little choice but to hold an early general election. There is no other mechanism that might break the parliamentary deadlock at Westminster and the party mandate they would have obtained from 124,000 Conservative members for their Brexit strategy would need to be reinforced by the UK electorate at large. Such a ballot could take place in June/early July or in late September/early October (although that would mean cancelling the party conference season which would cause all sides pain) or maybe very late October/November. Oh joy.
Tim Hames
Director General, BVCA