No winners will emerge from Brexit drama
Life in the village of Westminster was acrimonious to say the least as politicians went for their Christmas recess in mid-December.
Prime Minister Theresa May had pulled the meaningful vote on her Brexit proposal at the last minute, which promptly resulted in her party issuing a vote of no-confidence in her leadership. May survived but, rather than emerging strengthened because Conservative Party rules mean she cannot be challenged for another 12 months, she came out of the exercise politically weakened.
Members of Parliament had objected to the vote on the withdrawal agreement (divorce proceedings) and political declaration (delineating the cornerstones for the negotiations on the future relationship between the UK and the EU) being withdrawn with so little notice. May did this because, whichever way she did the numbers, she could not get a majority. The major sticking point was the Northern Ireland backstop, which stipulates that, in case the parties could not agree on a trade deal by the end of the two-year transition period, Northern Ireland would remain in the EU Customs Union while the rest of the UK would have a lesser relationship with the bloc. This would mean a hard border between Northern Ireland and the rest of the UK, which is not acceptable to many, especially the Democratic Unionist Party, which props up May’s minority government.
Parliament has now returned and restarted the debate on the proposed Brexit legislation prior to voting on it next Tuesday; only to deliver two major defeats to the prime minister by Wednesday. Firstly it abrogated the government’s authority to raise taxes without parliamentary consultation in the case of a no-deal Brexit. This does not eliminate the risk of leaving the EU without a deal, it merely frustrates the government’s ability to act.
Secondly, it curtailed the government’s powers further by limiting the prime minister’s ability to return with a counterproposal to Parliament within 21 days. She now must do so within three days, which would be all but impossible because it would involve consultations with the EU — a task that cannot be achieved in that time span.
The young overwhelmingly voted to stay in the EU and feel that Brexit was foisted on them by the older generations.
These defeats showed two things: One, there are 20-plus Tory MPs who are prepared to vote against the government. Two, Parliament has usurped powers that, according to tradition, are generally in the purview of the executive. Sir Winston Churchill once described the UK’s Parliament as the “oldest, least unwise and most democratic in the world.” He clearly had a point.
Where does this now leave the country and Brexit? Whichever way one does the numbers, it does not look as though May will get the numbers next week, even if the EU gives assurances on time limits of the backstop.
We will then be in uncharted territory, as May has admitted herself. She will have insufficient time to amend the Brexit deal. We could see a no-deal Brexit, a second referendum, an agreement on the proposed legislation, or even a general election, which Labour leader Jeremy Corbyn has called for.
Momentum around a second referendum seems to be building. The shadow Brexit Secretary, Sir Keir Starmer, made the valid point that around 2 million new voters have entered the system since 2016. The young overwhelmingly voted to stay in the EU and feel that the outcome was foisted on them by the older generations.
The country is in limbo and deeply divided. MPs have had so many death threats and abuse hurled at them that police protection has had to be beefed up around the Palace of Westminster. Civility is all but gone.
It is anybody’s guess how things will unfold. Brexit would be a thriller if it was played out on stage in a theater or as a film. However, this is real life and the political classes are playing fast and loose with the country and its economy. According to the Bank of England, a no-deal Brexit would lower gross domestic product by 7.5-8 percentage points. The NHS, as well as the agricultural and hospitality sectors, need access to labor from Romania, Bulgaria, Lithuania, etc. The supply chains in the manufacturing sector depend on parts being shipped back and forth across the Channel on a strict “just in time” regimen. Investments by the likes of Toyota, Nissan and Tata were made precisely because these companies could avail themselves of the deregulated UK labor market while having access to the 500 million-strong EU market for the finished product.
What makes matters worse is that Parliament and government have these protracted discussions about what sort of a Brexit they want without consulting with the EU. It is not just the UK Parliament that needs to vote in order to ratify the agreements; the EU Parliament and those of the 27 other member states will also need to do so. Article 50 can also not be extended indefinitely from an EU perspective. Austrian Foreign Minister Karin Kneissl mentioned the upcoming elections in May to the EU Parliament as a hard stop. As far as the EU is concerned, the current Brexit deal is all that is on offer. The EU leadership — Michel Barnier, Donald Tusk and Jean-Claude Juncker — have all reiterated time and time again that the UK wants to leave at its own request. The EU did not initiate the proceedings.
In other words, we are in limbo and, as far as one can see, there will only be losers if we continue down the trajectory of dissent and pushing deadlines out. It will be the country, its people, its institutions and the economy that will emerge weakened after we are done with the Brexit saga.
- Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources