Thursday 19 September 2019

Dan O'Brien: 'The worst Brexit outcome is now the most likely'

A no-deal Brexit is the default outcome. British politics is paralysed, so the worst-case scenario is also the most likely

UNCERTAIN FUTURE: UK Prime Minister Theresa May has entered into a crisis more profound than anyone could have imagined. Photo: AFP/Getty
UNCERTAIN FUTURE: UK Prime Minister Theresa May has entered into a crisis more profound than anyone could have imagined. Photo: AFP/Getty
Dan O'Brien

Dan O'Brien

What will happen on March 29, 2019? After yet another tumultuous week in the Brexit saga, that is ultimately the big question.

Predicting the outcome accurately is impossible. There are many things that could happen over the next few months. As is often the case in highly uncertain situations, sketching out scenarios can be the best way to analyse them. At this juncture, there now appears to be four outcomes. Each one is discussed below, with a probability attached.

A more pro-Brexit withdrawal agreement probability - 2pc

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Last week's publication of a draft agreement on the terms of the UK's withdrawal from the EU took place nearly two-and-a-half years after the Brexit referendum, and after more than a year of fraught discussions. If the EU side was going to change its position on any major issue, it would have done so by now. If other EU countries were going to demand that Ireland take a softer position on the Irish border, they would have done so by now.

Despite all of this, some senior members of the British cabinet still seek a different deal. It is highly unlikely after so much time elapsing and with so little time before Brexit that the EU 27 will make any significant changes to what has been drafted. A number of European leaders, including German chancellor Angela Merkel, were forthright in stressing that last week after the deal was made public.

Britain leaves on the basis of last week's agreement probability - 15pc

No observer of British politics believes that there is anything approaching a majority in the House of Commons in favour of last week's Withdrawal Agreement. It is due to be put to a "meaningful" vote early next month. With a working majority of just 13 in the 650-seat chamber, the deal is expected to be defeated by a wide margin by almost all observers. Ten DUP MPs and dozens of pro-Brexit conservatives oppose the deal.

If the British Prime Minister, Theresa May, survives any leadership challenge and if her government can avoid a vote of no confidence it is possible that the Withdrawal Agreement could be put to another vote in Westminster in the new year. There is a plausible scenario in which, fearing a no-deal exit which could lead to a cardiac arrest for the British economy, the Labour Party or the Scottish Nationalists reverse their positions and support the withdrawal terms. However, there has been no sign that either party is prepared to do that and, in the case of the SNP, its support might not even be enough to make up the numbers for a majority.

Brexit is postponed or abandoned probability - 15pc

The UK could seek to stop the withdrawal clock if it ends up staring down the barrel of a no-deal exit. This could be done by halting the legal mechanism by which countries can end their EU membership, contained in Article 50 of the EU treaties.

As it happens, the EU's supreme court is about to rule on exactly how this can be done. In the coming weeks, it is due to decide whether a departing country can unilaterally revoke Article 50. If the Court of Justice of the European Union decides that the UK can do this, the option will gain traction. It might become the only option that Westminster can agree on if no deal begins to look inevitable.

However, even if the court decides that individual countries can unilaterally revoke, many in the UK, most notably and obviously Leavers, will oppose any such move.

If the court finds that all the member countries must have a say, it is even less likely that Article 50 is revoked. On the EU side, there is very limited appetite to drag Brexit out any longer. Recently I heard a someone in Brussels say that the Remainers' "unicorns should be killed". In other words, that the hopes of those in Britain who want the UK to remain an EU member should be ended by a firm declaration by the 27 remaining members that there is no going back. Although that is not a universal view by any means, patience with Britain has worn thin. With so much else on the EU agenda, ending the Brexit saga once and for all is what many countries want.

Another matter that militates against a stopping of the clock for anything other than a period of weeks is the European Parliament elections, which will take place just two months after Brexit day. UK seats in the parliament have already been redistributed, and member countries do not want to reverse all these changes so that British MEPs can take their seats for what may be a few weeks or months. This is not an insurmountable obstacle, but it would be a significant consideration for the member countries.

A central factor in any decision by the members to revoke Article 50 would be whether the context in the UK had changed to any great extent. The biggest change to the context would be the holding of another referendum on whether to go ahead with Brexit on last week's terms, or whether to abandon the whole project.

Calls for a second referendum have been growing in the UK. The matter is divisive, as all Brexit matters tend to be. Quite apart from the opposition of Brexiteers, who say it would be undemocratic to ignore the 2016 vote, opinion polls show only small changes in views. A huge 20,000-person poll last week found support for Brexit had dropped from 52pc in the referendum in 2016 to 46pc now. The absence of a majority in the Commons for any course of action could make a referendum appealing as the only way to break the deadlock, but with no certainty of a vote to stay in, the EU other member countries may see it as merely prolonging the agony.

No-deal Brexit probability - 68pc

If stasis continues in British politics for another 131 days, the UK will leave without a deal.

While it is often observed that there is no majority in Westminster for a no-deal exit, the vital point is that it is the default outcome. Unless something else is agreed and voted through parliament, British membership of the EU will simply lapse at 11pm on March 29. That means a no-deal Brexit.

British politics has been in a state of paralysis over Brexit for two-and-a-half years. It is possible, that as the cliff edge approaches, minds will change. But the matter has become so visceral that even the sobering effect of the prospect of a period of severe economic disruption may not be enough to change minds.

British politics has entered into a crisis more profound than anyone could have imagined over Brexit. It is likely to get worse before it gets better.

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