Sunday 21 July 2019

Colm McCarthy: 'It's time for UK to use its get-out-of-jail-free card'

There are only three outcomes for the UK and Theresa May's defeat has not changed these possibilities, writes Colm McCarthy

TOUGH TIMES: Pro Brexit supporters outside the Houses of Parliament, London, last week ahead of the House of Commons vote on UK Prime Minister Theresa May’s Brexit deal — which was defeated. Photo: PA
TOUGH TIMES: Pro Brexit supporters outside the Houses of Parliament, London, last week ahead of the House of Commons vote on UK Prime Minister Theresa May’s Brexit deal — which was defeated. Photo: PA

All three of the principal Brexit outcomes remain possible as the clock runs down. These are as below...

1. The withdrawal deal survives its heavy rejection by the UK parliament last week and Theresa May somehow finds the votes;

2. The UK crashes out of the EU with no standstill period 10 weeks from now, the default outcome unless positive action is taken by the UK to prevent it;

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3. Or the exit date, March 29, is avoided through an agreed extension or a unilateral decision by the UK to revoke its resignation from the EU.

Last week's events removed none of these possible outcomes from the list. Mrs May has not abandoned her deal and has managed to defeat a no-confidence motion the day after her flagship policy went down in flames. That a government survives in these circumstances is testament to the extraordinary tangle in which the UK political system has ensnared itself. This has become a constitutional crisis, not just a row about policy.

The European Union has signalled that there will be no re-opening of the withdrawal agreement, although further ad-lib assurances may be attached to the accompanying 'political declaration'. There will be no legally binding excision of the elements which caused her 230-vote defeat. The belief she shares with Labour leader Jeremy Corbyn, that a superior deal can somehow be extracted from the EU over the next few weeks, is a delusion, and Mr Corbyn's failure to advance his demand for another general election does not change anything.

The UK is lumbered with an ineffective government, devoid of political authority but capable of winning votes of confidence. The Labour opposition, six points behind a shambolic Conservative party in the opinion polls, offers no meaningful alternative. There is not going to be a general election anytime soon and Labour would probably lose should one somehow be called.

If May's deal is not ratified by the UK parliament and a no-deal crash-out into a legal and commercial vacuum is to be avoided, there are just two ways to make this happen. It cannot be avoided through votes in the House of Commons. The UK has resigned, the resignation takes legal effect at the end of March and the House of Commons can pass as many resolutions to the contrary as the honourable members find diverting.

If they wish to be effective, they must find a way for the UK either to defer or revoke. The departing member state can seek a deferral of the exit date: this is provided for in Article 50 and it might be available from the EU-27, perhaps for six months or so, a cliff-edge postponed. Or the UK can unilaterally revoke the resignation letter and resume full and indefinite EU membership as if nothing had happened. The UK would retain its discount on the membership subscription as well as its opt-outs from the Schengen passport-free travel zone, the single currency and various exemptions from justice and social policy harmonisation.

A unilateral revocation includes the entitlement to resign all over again. One of the delicious ironies of Brexit is that this valuable and unexpected get-out-of-jail-free card was gifted to the UK in December by the reviled European Court of Justice, escape from whose clutches has been Brexiteer dogma for a generation.

Last Thursday, Mr Corbyn refused to meet the prime minister unless she took the threat of no-deal off the table. But he has not supported a deadline extension and he is opposed to revocation of the Article 50 resignation, the only actions available to the UK to avoid crash-out in the absence of the withdrawal agreement.

His party helped to vote down the same agreement, the only one available, last Tuesday. Mr Corbyn's condition just for meeting with Mrs May is that she furnishes an assurance deliverable only through mechanisms to each of which he is publicly opposed.

As Brexit has now assumed the status of a constitutional crisis, it is not clear who is in control as between government and parliament. Even if the government can somehow prevail, it is split: several ministers have threatened resignation unless no-deal is abandoned as an option, a somersault Mrs May has yet to execute - remember the 2017 mantra "no deal is better than a bad deal"?

While none of the three principal outcomes has been eliminated, the odds are beginning to shift. The draft withdrawal agreement has been so decisively defeated in parliament that it is difficult to imagine that ratification can be secured in time to avoid no-deal.

The EU has made it clear that there will be no material improvement and it is a terrible deal, the inevitable working-out of Mrs May's red lines, for the UK economy, especially for the services export businesses.

If the withdrawal agreement is dead, that leaves no-deal and a deferral of the Brexit date. The most positive outcome of the past few weeks is that British business has belatedly found its voice and the full horrors of no-deal are beginning to be articulated. But it remains a live possibility since it happens automatically unless actively prevented.

The odds have shifted towards the third outcome, a deferral of Brexit either temporarily via an agreed extension, or the cancellation of Brexit courtesy of the benign ECJ ruling. A temporary deferral would not reopen the withdrawal agreement but rather the accompanying 'political declaration' about the UK's future relationship with the EU. While non-binding, this document reflects Mrs May's red lines (no ECJ, no freedom of movement, thus no single market access for the UK's valuable services exports). Without scrubbing red lines, an extension could just become a further can-kicking exercise and would lead nowhere, but more slowly. Eventually the UK would have to accept the withdrawal agreement or crash out. Mr Corbyn has yet to embrace single market membership, preferring to stay in the customs union, which is less important and does not fix the Northern Ireland Border problem.

Some of those who voted against Mrs May's deal object, not to the Northern Ireland backstop, but to the nature of the long-term relationship envisaged in the political declaration. To the extent that the rejected deal is the best available, these people, including numerous Remain-leaning Tories, want the red lines revisited to improve the deal. Unless Mrs May or some alternative prime minister is willing to go this route, the only incentive for the EU to indulge more can-kicking is because member states need more time to get ready for no-deal and wish to avoid blame for a more immediate disaster.

Any revision of the political declaration in the direction of a UK aligned closely to the customs union and single market, under ECJ oversight and still contributing to the EU budget, runs up against the ineluctable 'Why Bother' question. The UK political system has, for two-and-a-half years, proven itself incapable of choosing any form of Brexit from the menu available. If reason were to prevail, the ECJ has delivered up another, but unremarked, backstop: the ability to revoke unilaterally, at no cost, and figure out at leisure if there is a form of Brexit that would command national support for an Article 50 notification four or five years down the road.

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