7 December 2018

What happens after May’s deal is voted down?


People have a wide variety of views on what Brexit should ultimately look like – Canada Plus, WTO rules, No Deal, a second referendum, Mrs May’s Backstop Treaty, a Norway-style solution – but hardly anyone has been focusing on the matter at hand: what to do on the morning of December 12.

The narrative we have been asked to believe goes something like this. Mrs May will lose the Commons vote on December 11. But she is a fighter. The European Council meets the following weekend and she will go back and ask for more comfort from the EU. It is, we are told, all about the numbers and if she loses by less than 50 or 100 votes, she can come back for a second go.

There are good reasons for thinking this convenient forecast is wrong. The fact is, under our Constitution, the Prime Minister has to maintain the confidence of the House of Commons and their own party. Admittedly, the Fixed Term Parliament Act means the legal confidence bar is a formal vote on the matter. But the practical and political consequences of the Prime Minister losing on Tuesday are likely to serious.

These consequences will be amplified by another consequence of the vote. The private sector, which is made up of companies with fiduciary and regulatory duties, will almost certainly initiate no deal plans. Stockpiling, activating EU subsidiaries, warnings to staff, statements to the stock exchange, all will suddenly be stepped up in pace. Financial markets will be volatile.

So when Mrs May tips up in the Cabinet room and says: “Morning everyone, I am off to Brussels to get more concessions at the weekend. Now, what was item two on the Agenda? Ah, yes banning gambling advertisements on the Tube” do you think the Cabinet is going to go “Great, we agree”? No, it is not. Or at least it shouldn’t.

The central forecast for Wednesday, the centrepiece of which will be Prime Minister’s Questions and a mooted No Confidence motion from Labour, should be general chaos and not an orderly round of additional negotiations in Brussels.

Here are four ideas for the Cabinet to consider:

Demand Britain’s existing membership of the European Economic Area is continued as a temporary measure.

Lord Owen – the former Labour foreign secretary and one of the few statesmen left in the country – told the House of Lords last week that as soon as the vote is lost, Mrs May should recognise the game is up and write to the European Union, its 27 other members, and the four members of the European Free Trade Association, to say the UK now wants to take up its rights of access to the Single Market.

Mrs May has used every possible manoeuvre to pull us from the EEA, as she fears it will sign us up to unlimited freedom of movement (another mistake). In order to activate our membership, all we need to do is to apply to join the EFTA governance pillar.

The critical point to understand is we have not yet left the EEA because we have not triggered its exit provisions by asking to leave with 12 months notice. If the EU cuts up rough, we can apply for international arbitration at the Permanent Court of Arbitration (a related court to the International Court of Justice). This would be no bad thing. Arbitration is exactly what is required when people are at loggerheads.

However, given that both the EU itself and the members of EFTA have all said that the so-called Norway solution is a possibility, this is unlikely to be required.

It is important to note that maintaining our membership of the EEA should be seen as a temporary fix to avoid a crisis and not precluding any other ultimate outcome, including a second referendum or Canada Plus or whatever. There is a possibility the Norwegians may object, but we will just have to win them over with promises of good behaviour on the one hand, and requests for arbitration on the other.

Extend Article 50

One of the criticisms legitimately raised about any other plan than the dreadful Backstop Treaty is there is no time to do anything else. However, it is possible to agree with the European Council to extend Article 50 by up to three months without requiring the UK to participate in next May’s EU Parliamentary elections. The EU do not want us to do that because our seats have already been allocated and if we were to participate, we could also participate in the election of the successor to Jean-Claude Juncker as Commission President.

Initiate a leadership election

The Cabinet can also initiate a leadership election by threatening to withdraw support for Mrs May publicly. But she should be given the opportunity to resign with grace. It is important to understand that this in itself would not add to the chaos. Under our system, a sitting Prime Minister stays in post until a successor is chosen.

An expedited Conservative leadership election would take at most four weeks, so a successor would be in place by early January. Not much goes on over Christmas, and a leadership election can join the partial closure of Waterloo station as essential maintenance works which need to take place during the holiday season.

It is not necessary to have a vote of the party membership, as long as the runner-up drops out.

The mechanism of the Parliamentary element is actually perfect. Dozens of candidates may come forward, but they will have to drop out at each round, until the last man or women is standing. This will result in a team and a workable Brexit plan being constructed through a cumulative process.

In my opinion, the most likely outcome is a Norway-then-Canada political formula, led by Boris Johnson or perhaps even Geoffrey Cox or David Davis. But that is just an opinion. The process will produce a result we should all accept.

Form a National Government

During previous crises, notably in the 1930s and 1940s, a National Government has been formed. On balance, it did a good job, recovering from the Depression and then going on to beat Hitler. Given the Hung Parliament, there is a case for offering Ministerial posts to key Labour figures, such as Yvette Cooper and Stephen Kinnock. Apart from anything else, that would skewer the two things most sensible people fear most: a Jeremy Corbyn Government and/or a second referendum. Why not give it a go?

I cannot pretend any of these plans is perfect, but if anyone else has a better one to avoid total chaos, let’s hear it.

George Trefgarne is founder and CEO of Boscobel & Partners consultancy.