10 Oct 2018

The Good, the Bad and the Ugly. Theresa May’s routes to getting a Brexit deal through Parliament

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The Conservative Party conference having come to an end and with Parliament having returned for a decent stretch, the Brexit process now moves towards what should be its conclusion.

In theory, that could mean a bargain on the three key elements – the Withdrawal Agreement in final legal form, the Transition Agreement, again as a legal tome, and a political declaration on the ‘Future Framework’ – being sealed at the EU Council on 17 to 19 October.

In reality, no one really believes that every aspect of the outstanding arrangements can be wrapped up in such a short period of time. The best hope is that (even if there is not a public declaration on the subject) the vexed matter of the Irish border and its ‘backstop’ could be settled by the end of next week and that the Future Framework will come together at a special EU summit in the middle of November. Almost everyone involved is working on an assumption that there will be a deal, but that the drama will be whether or not Theresa May can then hold enough of the Conservative Party together to ensure its smooth passage through Parliament.

The huge clue as to the anticipated timing of all this came with the Chancellor’s announcement in Labour Party conference week that his Budget would be held on Monday, 29 October. This would in ordinary conditions be a very bizarre choice of date. Philip Hammond made it clear almost a year ago that he intended to revert to the formula which Ken Clarke had devised as Chancellor of holding only one major fiscal event a year (a Budget) and to do so in winter and not in the spring.

On the basis that the restored single Budget would occur where the Autumn Statement had once been then logically it should have taken place this year on 22 November or 29 November, or at a stretch on 5 December. That it is instead a month earlier and on a Monday as well requires some explanation. Among other curiosities, this date means that the Office of Budget Responsibility is likely to have to produce a set of forecasts on growth and hence the deficit whilst blind as to EU/UK developments.

The explanation is based on Brexit and the anticipated parliamentary schedule. By House of Commons convention, the Chancellor’s annual parading of his Budget box is always followed by at least four full days of debate in the House of Commons (even if his package is dull and incremental). If this were to occur in late November, then it would consume time that will probably be needed for discussion and then a vote on the exit mechanism from the European Union.

An added (oddball) element is that the House is due to have a mini-recess from 6 to 12 November. This break is a historic legacy from when the Queen’s Speech used to be in November each year (which was true until 2009, as a rule) and the parliamentary estate had to be shut down for a few days to be knocked into shape for that State Occasion. With the passage of the Fixed-Term Parliaments Act 2011, Her Majesty’s outing to Westminster was moved to May/June but the November mini-break endured. For essentially irrational reasons, the House will not be sitting for a few days that it should be.

So, the Budget will take place on Monday 29 October which allows for four days of debate to take us up to 6 November and the short recess. At some moment in the two weeks after that (as of now 15 or 16 November looks like the most likely date, but this can change), it is highly likely (an 80%+ chance) that an ad hoc EU summit will endorse a deal and send it in the direction of the UK Parliament. Can the Prime Minister oblige her colleagues in the Conservative Party and the DUP to back her in the numbers needed for any such accord to be endorsed by the House of Commons and into law?

The answer to that is probably ‘yes’ but there are, from the point of view of Mrs May and her team, three routes to win and from their stance these are the ‘good’, the ‘bad’ and the ‘ugly’. These terms relate to the relative ease of ratification and the political consequences of the outcome.

The good

The ideal result for the Prime Minister would be an agreement on the Northern Ireland backstop which is sufficiently UK-wide in its character that the Democratic Unionist Party can live with it, and a Future Framework which has enough elements that are similar to the Chequers Plan that Mrs May can claim that it is the heir to that document, while there are other aspects that are distinct enough from that Chequers blueprint that her internal opponents in the hard Brexit contingent can insist it is really the ‘Canada Plus, Plus, Plus’ that they have always championed.

While it might seem, to any normal human being, to be an Alice in Wonderland scenario in which two-thirds of Conservative MPs can vote for a proposition on the basis that it is sort of the Chequers Plan, while one-third of the self-same parliamentary caucus can embrace it precisely because it is not the Chequers Plan, this is a world which the Whips Office would welcome in a heartbeat. Indeed, it might be deemed a triumph.

In many respects it would be. Conservative opposition to the Brexit plan on offer would have been reduced to literally a handful of MPs. Their discontent would be cancelled out by the small band of pro-Leave Labour MPs. The legislation would make it out of the House unscathed. It would head in the direction of the European Parliament and near certain endorsement there and the road to the political exit on 29 March 2019 would be open. The Prime Minister would not only have survived but strengthened politically by the exercise. She could have entirely valid expectations of not only seeing the formalities of Brexit through but staying in office thereafter.

It is not inconceivable that this could happen. It would, though, require quite considerable fortune. Almost everything would need to break the PM’s way. If it does not, the ‘bad’ and ‘ugly’ beckon.

The bad

The ‘bad’ would kick in if it became obvious that either the DUP or large enough numbers of pro-Brexit Conservative MPs would not vote for the agreement that Mrs May presents to them.

The legislation would either have to be pulled or the Government would proceed with it to a defeat, simply to know what the scale of opposition was and who the individuals involved were (despite the obvious disadvantages of losing a vote in the House, ascertaining that information would be useful).

Ministers would then need to return to the EU, possibly as late as the 13/14 December Council meeting, to find some sort of tweak which would allow them to take a slightly revised version of the package back to the House of Commons before the Christmas recess date of 20 December and as a ‘take it or leave it’ vote, with the alternatives to ‘take it’ including a disruptive ‘no deal’, extending Article 50 to allow for more negotiations or, as the Armageddon option, a sudden general election. It would be extremely messy and leave Mrs May hanging by a thread but it could be enacted this way.

The ugly

The ‘ugly’ arrives if the various thumbscrews applied to Conservative MPs are not by themselves enough to ensure their submission. In such circumstances, Cabinet unity would begin to fray and the stock market and the foreign exchange markets would dive south rapidly. Mrs May would have little choice but to offer a ‘carrot’ as well as the various ‘sticks’ set out above.

She would need to make it crystal clear that not long after Brexit had formally occurred on 29 March at 11pm our time (this is, mercifully, a Friday night, and we may all need that weekend to sober up), she would stand down from her position, likely shortly after the local elections which are being held on 2 May 2019.

That ushers in a leadership election which would be over by mid-July and allow the Conservative Party to settle upon a stand which it intended to take into the final deliberations as to how to translate the political declaration that was the Future Framework in to the actual wording of a Free Trade treaty. Such a concession would end the stalemate and it would see the House of Commons finally back a deal with the European Union. It would also mean that Mrs May will not be the PM this time next year.

Tim Hames
Director General, BVCA


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