13 Feb 2019

Weeks or Months? The chances of an Article 50 extension of some kind are rapidly increasing

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The first Saturday of this month was Groundhog Day in the United States of America. The whole of February is beginning to feel somewhat akin to that in Westminster. This week has seen yet another statement from the Prime Minister to the House of Commons on Brexit with a plea for even more time for additional negotiations with the European Union before a further vote can be held on a Withdrawal Agreement. Another ‘neutral motion’ which does not reveal very much is to be laid today with amendments to it and a debate scheduled for tomorrow.

The really significant element to all this is the extent to which ministers volunteer (reluctantly or otherwise) to accept a hard date for a settlement to be reached, which if not achieved compels them to seek an extension to Article 50. In a perfect world, Theresa May might well prefer not to have any restrictions placed upon her so that she could run down the clock all the way until the last week in March but it appears unlikely that her Cabinet colleagues will allow a true No Deal Brexit to be an (albeit theoretical) option for all that time.

It is more likely, therefore, that the Government will indicate that if it has not secured parliamentary consent for a Withdrawal Agreement by the end of February then it would ask for an extension of Article 50 to be approved at or before the next scheduled EU Council meeting on 21 and 22 March and continue attempting to find a deal that the House of Commons will accept by 29 March.

All of which is, to put it mildly, immensely irritating for almost everyone in the business community (the possible exceptions being those selling Brexit consultancy services for whom this is a bonanza). What are the strategies of the Conservative Party and the Labour Party during the course of this month and what are the implications for the actual date on which the UK ceases to be in the EU?

Mrs May as Tracey Emin?

Mark Twain allegedly said of Richard Wagner’s music that it was “better than it sounds”. Mrs May’s approach to Brexit right now is not unlike Tracey Emin’s art, namely better than it looks. Despite appearances, there is a strategy of sorts out there and it has a respectable chance of success.

It consists of a number of elements. These include: a commitment to extending the transition period until 31 December 2021 in the event that an ‘end state’ pact with the European Union clearly will not be in sight by mid-2020; reworking the Future Framework aspect of the Withdrawal Agreement to harden up an EU commitment to reaching that end state by 31 December 2021; settling on a formula which will allow the UK to insist that this pledge has a legal status, even though it is outside of the formal legal text of the Withdrawal Agreement; offering Parliament more control over the actions of the executive so it cannot allow the backstop to come into force by a backdoor; and an additional set of guarantees around workers’ rights and environmental protection.

More covertly, there will come a moment when, as the Prime Minister appreciates, she might have to play what is referred to in whispers as ‘the Captain Oates card’, making it plain that she does not intend to stay in office for much longer once the political exit from the EU is complete and that Conservatives will then have the chance to settle on a preferred model for the ‘end state’ via a leadership election.

The alternative to this admittedly somewhat messy outcome would be an extension of Article 50 which would last for some months (until late July, late September, even the end of December). That would be a scenario of very little appeal to the pro-Brexit European Research Group of her own MPs. They want to be out of the EU as soon as possible and worry that any alternative to the Withdrawal Agreement which might then emerge would involve a much softer variation of Brexit and fret that a deferral of any notable length of time could allow the possibility of a second referendum to return to the table.

For that reason, most Conservative MPs (including those aligned with the ERG) think there is a logic in them coming back on board by the end of this month. Their challenge is how to ensure that the DUP offers them political cover by also agreeing to switch sides and whether the EU is willing to provide some concession (even if small) that enables them to claim a victory. The next two weeks (and potentially six weeks) are all about how Mrs May reaches that ultimate conclusion.

Jeremy Corbyn as Judas Iscariot?

If the above analysis sounds contorted then events inside Labour High Command are more warped. For a long time now, what might be politely described as ‘strategic ambiguity’ (or, put more bluntly, ‘deliberate bollocks’) has served Jeremy Corbyn well. It has enabled him to oppose the means by which the Prime Minister is attempting to realise Brexit without opposing Brexit itself on principle. As a consequence, Labour is committed to a version of Brexit in which the UK is somehow very close to the single market while not completely in it, and has ‘a’ customs union with the EU which is, in an unspecified manner, distinct from ‘the’ customs union with the EU. This is basically fairyland terrain.

Alas, Mr Corbyn has now reached his Judas Iscariot hour. He has to betray someone. The only issue is who and how? Does he desert pro-Leave Labour votes by moving decisively behind the concept of a second referendum and campaigning for the option of the UK remaining in the European Union? Or does he double-cross pro-Remain Labour MPs, activists and members by declining to travel down that road and facilitate Brexit by not deploying every parliamentary and political means to block it?

Which is why the Labour leader’s letter to Mrs May setting out his terms for resolving the impasse on Brexit has proved so controversial internally. No one seriously thinks that the Prime Minister is about to accept his version of Norway Plus with its eternal customs union provision, but it is possible that she or another Conservative Party leader could back a modified version of it with a temporary customs union as a template for a complete alternative to the Withdrawal Agreement and backstop.

Furthermore, Mr Corbyn’s missive to Mrs May strikingly failed to assert that if she did not adopt his terms then the only other acceptable course of action would be a second referendum. This triggered such outrage amongst a section of the parliamentary Labour Party that Sir Keir Starmer, the Shadow Brexit Secretary, has had to spend the last week insisting that the ‘people’s vote’ was still an option.

Most of his colleagues do not believe him. They strongly suspect that the Corbyn inner circle wants the Withdrawal Agreement to be adopted with Labour voting against it, Brexit to take place with the Conservative Party having ownership of it, and with Mr Corbyn then returning with his anti-austerity appeal to electors. The coming weeks will be as divisive for the Opposition as they will for the Government.

So what is the end result for Brexit?

It is still possible (just about) for a Withdrawal Agreement 2.0 to clear the House of Commons on or about 27 February, then be turned into an Act of Parliament, and for all the remaining other bills relating to Brexit, statutory instruments required for Brexit, and the rolling over of trade agreements that the UK currently has with other countries via the EU to be completed by 29 March. But it is a very, very tight timetable. The House of Commons would be destined for many late-night sittings.

Whitehall is thus quietly preparing itself for a short extension of Article 50 in such circumstances up to 18 April (the last date that the European Parliament, which also has to approve the Withdrawal Agreement, is sitting before it breaks up for its elections in late May) or conceivably aiming for yet more time after the European Parliament has approved the Agreement until, potentially, 3 May.

If no Withdrawal Agreement crosses the line, then it is extremely likely that a much longer extension (September 27? December 31?) would be needed. With luck, this should all become clearer in about a fortnight. Luck has, it should be noted, been in somewhat short supply throughout the Brexit saga.

Tim Hames
Director General, BVCA


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