The UK’s Chronic Brexit Crisis

Kirsty Hughes | 28 September 2018

© 2017 European Union

As the UK’s tortuous, groundhog day Brexit negotiations with the EU stagger on, uncertainty continues to reign. Will there be a deal and what will it look like? Will a deal pass at Westminster and at the European Parliament and European Council? What will happen if there’s no deal or the deal is rejected? What will happen if the deal passes? Might there be a general election and/or a ‘people’s vote’ if the deal doesn’t pass?

On the critical issue of the Irish backstop, whether there will be progress, as demanded by the EU side, by the EU summit on 18-19th October, and a full deal by November, we don’t know. But if there’s still no deal by the end of the year, time for ratification and for reaching a deal will finally be running out.

Yet, despite this repetitive uncertainty, we are in the Brexit endgame – at least for this stage of the Brexit process. Either there will be a deal (that passes or not), no deal or no Brexit. But the UK is in the midst of an intense, deeply damaging and chronic political crisis, which is quite probably set to continue whichever direction Brexit turns in next.

A Deal?

If there is a deal, and if it is ratified, the UK will leave the EU on 29th March 2019. That will be a huge moment with major economic, political, social and security ramifications. But it would also be a moment where the UK enters a transition until the end of 2020 and so much may look superficially the same.

The cliff edge will have shifted to December 2020 – albeit with the crucial difference that there will be an Irish backstop. So a trade deal may be agreed but quite likely one, if it’s Canada-style, that requires the backstop to kick in (unless there’s a big shift to a ‘soft’ Brexit). And if talks on trade and the wider relationship between the UK and EU founder in that 21 month period, the risks of a ‘no deal’ Brexit, with its wide-ranging impacts on borders, queues, supplies of goods and services, will still hang over the UK. Much of the debate and analysis that has already been had about types of trade deal and implications of no deal will circle round again – UK politics will still be consumed by Brexit.

But if the UK did head into ‘no deal’ territory at the start of 2021, it will do so with the Irish backstop also kicking in, adding a new dimension to UK-EU relations and to the then Brexit debate. Of course, we also don’t yet know whether that backstop will just mean a separate deal for Northern Ireland or perhaps also include some possibility of rapid discussions over the whole UK staying in a customs union, perhaps temporarily, with the EU while future relationship talks continue.

We also don’t know whether, in the last tense days of talks on the Brexit deal this autumn, provision may be made to allow a possibility of extending the transition period beyond December 2020. We do know, though, there are legal limits to how far Article 50 can be extended, given Article 50 is not meant to substitute for a proper trade negotiation under the relevant articles of the EU treaties.

If the UK leaves the EU next March, it will be possible but tough for it to re-join at some future point. But it is clear that the UK would not get its current range of opt-outs again. And, for now, the politics of the two main parties, Conservatives and Labour, would not point towards re-joining in the short to medium term.

Constitutional Impact: In both Scotland and Northern Ireland, the impact of Brexit going ahead will be substantial politically. Opinion polls suggest, if Brexit happens, there will be a shift in opinion towards independence in Scotland and towards reunification in Northern Ireland. How, and over what time period, those political and public opinion shifts play out is an open question but the impact is likely to be considerable.

Would the Scottish government demand another independence referendum once the UK has left the EU in March 2019 – and would the UK government concede that? Theresa May said ‘no, not now’ in March 2017 to another independence referendum. But the case for a referendum, once Brexit has happened, given Scotland’s clear majority support for remain will be hard to contest. Certainly, depending on the nature of an agreed Irish backstop, the Scottish government will demand it too gets a special differentiated deal – but there is no expectation that May would agree to that as this autumn’s talks go down to the wire.

Overall, constitutionally, in the face of Brexit in March 2019, the UK will be facing a live, contested politics over whether or not it survives as a single state. And it will be facing deep continuing divisions over the type of future UK-EU trade deal to negotiate and over the damage any trade deal will cause. There will also, as now, be businesses and other organisations taking decisions on output, location, suppliers and so forth based on the fact that Brexit is happening and that there is an end 2020 deadline for leaving the single market. So the UK’s chronic Brexit crisis will continue – while its bargaining power vis-a-vis the EU, having signed the withdrawal agreement, will be much reduced.

No Deal or a Deal Voted Down?

No deal: It is hard to envisage the UK crashing out of the EU without a deal next March, at least without there being a range of steps taken to attempt to avoid that. The UK and EU would surely keep negotiating in an attempt to rescue the withdrawal agreement – but that assumes an Irish backstop can be found. The political and economic crisis that the UK heading towards ‘no deal’ would unleash would be acute rather than chronic. And that crisis would surely point towards a general election being held – whether with Theresa May or another Conservative leader as prime minister at that point.

But whether Westminster would vote for an election at that point is unclear. If it did then, to avoid a ‘no deal’ crashing out, it’s quite possible that agreement would be sought with the EU to extend Article 50 to allow the election and subsequent Brexit negotiations to occur. The EU may agree – it needs unanimity – but any extension is likely to be short.

Westminster voting down a deal: More likely than ‘no deal’ is that Westminster could vote against whatever deal May brings home (less likely but not impossible that the European Parliament could too). If May does bring a deal home, the EU will then get behind the deal (whether at the emergency November summit or later) and insist with May that this is the best route ahead in the circumstances. There will be considerable pressure for MPs to back such a deal. But whether a majority of MPs will vote for it is the unknown and crunch question.

Any deal will include an Irish backstop – but it may be one that tries to assuage DUP opposition to that by including a commitment to look for a temporary UK-wide customs union if the backstop looks like kicking in. The future relationship declaration may be very vague or it may have more detail than many currently expect. It’s worth emphasising that EU leaders including Macron are said to be concerned at agreeing too vague a deal which might give the populist far right encouragement, ahead of next May’s European Parliament elections, that leaving the EU can be relatively costless.

Theresa May has repeated her opposition to a simple Canada-style deal that the Brexiters in her party would back. But given her own red lines, the EU at best would agree some fine words on a very deep and special free trade deal for the future – unless May moves in the direction of something that starts to look very like a customs union, even if not called that (which would further deepen Tory divisions).

A declaration on the future relationship that sounds like Canada – with a second part to an Irish backstop that hints at a UK-wide backstop solution – might keep on board Tory Brexiters and the DUP even. But Amber Rudd has declared up to 40 Tory MPs would oppose such a deal. At the same time, despite the lack of clarity emerging from Labour’s party conference, it is hard to see Labour doing anything but vote against such a deal. Likewise, according to their policy positions on Brexit, SNP MPs should also be expected to vote against such a Canada-style deal. If Rudd is right, then such a deal would not pass – but if there were as few Tory remainer rebels as in the customs union vote in July, May could win the vote.

But what if May’s deal actually included something not called a customs union but that looked rather like one? Can it be guaranteed that Labour and SNP MPs would vote against such a deal? And will Tory remainer MPs vote against such a deal or would it then be Tory Brexiters who might vote against (but would they really vote to stop Brexit happening?).

The numbers are hard to predict. But if, in the end, Westminster votes down May’s deal, then the UK will face a major and acute political crisis – with immediate economic effects, not least falling sterling and warnings from major businesses.

General election or people’s vote or neither? That crisis could deepen rapidly if there is no clear path ahead. Labour’s conference has committed it to demand a general election if May’s deal is voted down. But what if there isn’t a majority in the Commons to pass a ‘no confidence’ motion?

In that case, would attention shift to a Commons vote for another EU referendum? There might be a majority in the Commons for a ‘people’s vote’ on the deal. But that would depend on Labour backing it – its much contested party resolution simply talking of keeping all options on the table. And it would need the SNP to back it – despite their demand for acknowledgement of their case for a second independence referendum which they are not going to get from the other parties at that point (it might be different after a general election with a minority Labour government looking for voting support in the Commons). It would also need sufficient numbers of Tory remainer rebels to back it too.

Labour’s leadership are clearly reluctant to back another EU referendum with a ‘remain’ option – despite Keir Starmer insisting that option is there in party policy (as it appears to be). But in the face of May’s deal being voted down and no majority in the Commons for a general election, it’s hard to see there being a majority for a referendum on the deal that didn’t include a ‘remain’ option. Of course, if such a referendum did take place, there’s no guarantee ‘remain’ would win – if they did, the UK would stay in the EU but with what continuing deep divisions domestically is an open debate. If ‘leave’ won again, divisions would probably deepen and the constitutional challenges become more acute.

But what would happen, in the midst of a crisis caused by Westminster voting down a May deal, if there wasn’t a majority in the Commons either for a general election or a people’s vote? The UK’s political crisis would deepen yet further. Something would have to give. Would May at that point go for a general election (or go back to Brussels for more talks – but on what)? And if the Commons did back a people’s vote against the express position of May’s government, would another EU referendum go ahead (with an extension of Article 50 needing to be agreed) or would May, in preference, call a general election (if she’s not been deposed by a Tory leadership contest)? After all, how could May’s government reasonably organise another EU referendum when they actually oppose holding it.

A general election: If there is a general election but Labour doesn’t back another public vote on the EU in its manifesto, Labour may lose votes as a result. It’s conceivable, given polling figures, that the Tories could win again or that Labour could end up as a minority government needing LibDem and SNP support to get its programme through. A Tory win would presumably mean Brexit going ahead – if they then had enough votes in the Commons – or there could be more stalemate, if the Commons remains split without a majority government. Or a Labour government might attempt to negotiate a relatively ‘soft’, rule-taker Brexit. Whether such a ‘soft’ Brexit, with its democratic deficit, would be sustainable is doubtful. And it would certainly leave the SNP (despite their own ‘soft’ Brexit policy) with reason to demand another independence vote – unless of course they had provided the votes to get a ‘soft’ Brexit through the Commons.

Of course, with a Labour minority government, the LibDems might demand the price of another EU referendum for a ‘confidence and supply’ deal with Labour. But if Labour agreed to such a referendum but first negotiated a ‘soft’ Brexit and promoted that, would ‘remain’ win – or even be on the ballot paper? And the SNP, with more MPs than the LibDems, would presumably prioritise demanding agreement on another independence vote over another EU vote.

So, after a crisis of rejecting a May deal, there could be an election or a people’s vote. But chronic crisis could still loom – whether through a divisive Brexit somehow going ahead, ‘no deal’ or no Brexit. Staying in the EU, in many ways, looks the least divisive, as well as the only path that imposes no economic damage, but the path to that outcome is only one of the possible scenarios and would have its own accompanying political and social divisions.

The Route Ahead

The route ahead for the UK and Brexit looks murky indeed. A Brexit deal may bring more immediate clarity than ‘no deal’ or a rejected deal but it will be clarity on the UK heading down a self-damaging path, and one that will keep the fundamental Brexit debate continuing in the coming years, as the future UK-EU trade deal is thrashed out. And it will open up major constitutional debate across in Scotland and Northern Ireland as well as continuing deep divisions on the form of the future relationship. The UK will remain mired in its deep, chronic political crisis. It’s the Brexit endgame – but only up to a point.

Kirsty HughesKirsty Hughes | Twitter

Scottish Centre on European Relations

Dr Kirsty Hughes is Director of the Scottish Centre on European Relations. She is a researcher, writer and commentator on European politics and policy, and she previously worked for a number of leading European think tanks.