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  • 2019/01/22
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Brexit: Theresa May is going to have to radically change her stance

Brexit: Theresa May is going to have to radically change her stance

On 15 January, the UK Parliament rejected the withdrawal agreement that Theresa May had negotiated with the European Union by 432 votes to 202 – a 230-vote margin, making it the UK’s worst parliamentary defeat since the 1920s. Consequently, Labour Party leader Jeremy Corbyn tabled a motion of no confidence in the Government, which took place the day after. Theresa May won by 325 votes to 306, with the Conservative Party and DUP MPs uniting behind the Prime Minister to head off the risk of a general election in which they might lose power to Jeremy Corbyn.

While the recent political events have significantly increased the already high uncertainty over the outcome of Brexit, they are not without some benefits. Firstly, Theresa May cannot be removed as Conservative Party leader until December 2019 following the leadership contest that she won back in December, and her Government is safe, for the time being at least (though there is nothing to stop Jeremy Corbyn tabling another no confidence vote in the coming weeks). Secondly, the parliamentary defeat forces Theresa May to finally reckon with reality – to wit, an extremely divided population and a fragmented Parliament in which her only hope of securing a majority is by adopting a less radical and therefore more consensual stance on Brexit. 

The scale of the parliamentary defeat on 15 January means there is little prospect of Theresa May’s current Brexit deal being approved by the House of Commons in a second vote, even after further EU concessions. A number of European leaders have already indicated that the terms of the withdrawal agreement are not open to renegotiation. According to press reports, however, Michel Barnier said in private meetings with the European Parliament that the EU27 could shift its position if the UK Government were to change its “red lines” following the parliamentary vote. 

 

Theresa May’s goal now is to reach a compromise with the various political parties. An amendable motion will be put before Parliament on Monday 21 January on her "Plan B". This means MPs will be able to influence the Government’s actions by tabling amendments. A parliamentary debate is scheduled for 29 January. While there is little scope to renegotiate the withdrawal agreement, notably as regards the Irish backstop, the political declaration on the future relationship could still be amended in order to include a permanent customs union for instance or a Norway-style  soft Brexit. MPs may also ask for an extension of the negotiation deadline beyond 29 March 2019 or for a second referendum. 

What are the implications? With hard Brexiters forming a minority in Parliament (around a hundred out of 650 MPs), logic would suggest that Theresa May’s strategy should focus on a softer Brexit to increase her chances of securing a parliamentary majority. It could, in particular, consist of permanently keeping the UK in a customs union with the EU, in line with the official position of the Labour party. However, such a scenario would require Theresa May to take the risk of splitting her own party, the Conservatives, for the sake of the national interest, which is by no means guaranteed. Not only would she have to agree to rule out the “no deal” option, as demanded by Jeremy Corbyn, she would also have to give up her sacrosanct “red lines”, notably as regards independent trade policy. Up to now, the Prime Minister has given no indication that this is something she might be willing to do. However, if the “red lines” do not budge, changes to the agreement, if any, will be merely cosmetic, and would therefore probably not be enough to change the minds of the additional 120 MPs needed to secure an absolute majority.  

 

As the fateful date of 29 March 2019 approaches and uncertainty grows, the spectre of the “no deal” scenario increases, not only because this is the default option if no agreement is ratified, but crucially because there is probably no parliamentary majority for an alternative to Theresa May's deal for the time being.

Yet, we continue to believe that a “no-deal” will eventually be avoided as the majority of MPs is largely opposed to this scenario. One possibility is to delay the Article 50 deadline beyond the 29 March in order to oblige the government to go back to the negotiation table, or to hold new general elections or a second referendum. According to press reports, the EU might be willing to extend negotiations until July (a decision that would require unanimous approval from the EU’s 27 Member States) provided the UK changed its “red lines”. However, such a concession would complicate the upcoming European elections, though an internal expert report for the European Parliament noted that those elections should not be an obstacle to extending negotiations beyond 29 March 2019. 

If a delay of the Article 50 deadline ultimately proved fruitless in terms of Brexit negotiations, British MPs would once again be faced with a “no deal” scenario. Their only options to block this adverse scenario would be to either accept the Theresa May’s agreement or to vote to overturn Brexit (potentially while also promising a second referendum). The latter eventuality is currently far from garnering majority support in the UK Parliament, leaving the Theresa May’s deal, or a softer version of it, the only way forward.       

  

Finalised 20 January - Slavena Nazarova - slavena.nazarova@credit-agricole-sa.fr

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