How Theresa May Will Navigate the Perilous Road to BrexitBy
Prime Minister Theresa May has nine months to define what Brexit will actually mean and she’ll have to do battle on three fronts to get there—in Brussels, in Parliament and with her own Conservative Party.
Her priorities are to decide what the future relationship with Europe might look like, solve the intractable puzzle of the Irish border and see off an emboldened campaign for a second referendum. Some of the hardest decisions may have to be kicked down the road.
Here’s a look at what the next few months might look like, in three scenarios.
The Fudge: Brexit delivered but hard decisions postponed
Talks on the future trade deal start in April but don’t make much progress: the U.K. digs in with a proposal the EU has long rejected, and the EU refuses to engage. Discussions on the Irish border make little headway.
But by the end of the year, the two sides agree on the withdrawal treaty and also on a vaguely worded text that sets out the future trading relationship. It’s based on the EU’s opening offer of a basic free-trade agreement that does little to help carmakers, bankers or the service economy. It’s far short of the deep and special partnership that May was bidding for.
“The good money is on a basic FTA,” says Andrew Hood, a lawyer at Dechert who was former Prime Minister David Cameron’s legal adviser. As another cliff-edge looms at the end of the transition period, some companies leave, others switch their supply chains. The process is so gradual that many people hardly notice.
Attempts by Parliament to reject the deal fail as lawmakers are too scared of the risk they will tip Britain into a chaotic no-deal divorce. Tories are also worried about going down in history as the rebels who helped bring the socialist Labour Party leader Jeremy Corbyn to power.
The question of the Irish border has been postponed again with a carefully-worded compromise both sides can tolerate. The risk remains that Northern Ireland will end up under a different regime to the rest of the U.K.
- Bottom Line: The U.K. drops out of the EU in March 2019 into a 21-month transition period. May can say she has delivered on her promise. The hard work has been deferred, possibly even to a different leader.
The Half-Turn: Parliament pushes May into one more concession
An alliance of Tory and Labour lawmakers force a vote on staying in the customs union—the arrangement that keeps cross-border trade easy within the bloc but prevents the U.K. striking out on its own. May is defeated as lawmakers put the country’s economic interests above party discipline. Brexit backers cry foul—an independent trade policy was a key prize of leaving—but they know they don’t have the numbers to defeat May.
May knows she has to get the final deal she brings back from Brussels through Parliament and can’t risk a defeat on the eve of the departure date. The feeling in May’s office already is that she doesn’t have a mandate for an extreme Brexit. She accepts the new position, which solves the Irish border problem and allows her to stick to her most important red line that Brexit will bring an end to uncontrolled immigration from Europe.
As Sam Lowe, a trade expert at the Centre for European Reform, puts it: “It only requires one red line to move.” The government says it can still strike deals on services and innovative new industries, and the hardliners accept this is the best Brexit they can get.
The EU welcomes the move with open arms—it’s what it wanted all along. Business is delighted.
- Bottom Line: The U.K. offers the EU a negotiating stance it can work with and Britain heads for a slightly softer Brexit. Hardliners aren’t satisfied but pro-EU lawmakers and business get a Brexit they can live with.
The Revenge of the Remainers: A second referendum is fought
This one requires a bit more imagination and probably relies on a bombshell revelation—such as compelling evidence that voters were unduly influenced or manipulated—to create a certain momentum. But there is already a plan to stop Brexit under the leadership of 39-year-old Chuka Umunna, one-time candidate to head the Labour Party. It might just catch on.
An emboldened army of lawmakers has tools at its disposal. They could tweak legislation so that a rejection of the deal May clinches doesn’t have to mean the alternative is no deal. They could try to force an extension of divorce proceedings to buy time.
The autumn will be the key moment when May brings the divorce deal back from Brussels. If it’s deemed a bad one, with little detail about what it means for the future of the economy, the rules of the game could change. Allegations the pro-Brexit campaign broke election rules bolster the argument for putting the final deal to the public. To be sure, voters are weary of elections—they’ve had one every year since 2014—and it’s possible the perception that Brussels is out to punish Britain could deliver a more decisive vote for the Leavers.
- Bottom Line: Remainers may get their referendum on a final deal, but it’s not clear that another plebiscite would go the other way.
— With assistance by Hayley Warren