by Frank Schnittger
Fri Nov 2nd, 2018 at 12:54:12 PM EST
Theresa May has survived numerous threats to her leadership to fight another day after a reasonably well received Tory party conference speech and UK Budget. The mood music on both sides of the Brexit negotiations appears to be that a deal can still be done in late November or early December at the latest. The adults have entered the negotiating room and remaining differences are being chipped away. A formula of words will be found to paper over the cracks and arrive at some sort of an agreement.
The markets will breath a sigh of relief and Sterling will rise. Much of he media will hype the achievement of a deal almost regardless of the content. Dire warnings of the consequences of "no deal" have had their effect of dampening expectations and only the churlish will point out how far short the deal falls from the Brexiteer claims of "the easiest deal in history" achieved because "they need us more than we need them".
My skepticism over the prospects of a substantial deal has always centered on May's ability to get any such deal through parliament. Have expectations been reduced enough to make the deal palatable? Are Brexiteers sufficiently desperate to agree any deal so long as it gets the UK out of the EU? Will Remainers vote for a deal so obviously worse than full membership because it avoids the nightmare "no deal" scenario? Can the DUP ever be appeased?
Certainly there has been a lot of "expectations management" going on. The UK government's publication of 80+ "technical papers" on the preparations required for a no deal Brexit have concentrated minds wonderfully. Every day there are more dire warnings of the economic, logistical, and personal impact of a no-deal Brexit and the UK economy has already under-performed it's peers by 2% of GDP since the referendum.
But the UK also brought a lot of economic momentum into the A.50 negotiation period and growth, employment, earnings and tax revenues have remained in positive territory. Leading indicators of reduced world growth, trade wars, and political instability may cut little ice when compared with the promise of an "end to austerity" and increased funding for the NHS. Never mind that there are still have several Billion more in cuts to welfare benefits in the pipeline, and government expenditure on services other than the NHS is stagnant, at best. The really poor vote less, and tend not to vote Tory in any case.
So how much will all of this matter? My baseline scenario is still that Tory hopes of substantial Labour dissident support for a Brexit deal are illusory and that the deal will fail to pass Parliament. May will then face a leadership challenge which she could lose despite retaining majority support among Tory MPs. The Tory membership have the final say and many of these are to the right of Atilla the Hun. There are a huge number of potential alternative candidates, but my guess is that Boris Johnson is still the favourite to succeed despite reports that his star has waned. The ghost of Churchill is too heavily engraved on the Tory soul, and BoJo has modeled his entire career on the wartime leader.
Boris Johnson will then fetch up in Berlin, Paris and Brussels with demands for "a better deal for Britain" failing which he will claim to embrace a no deal Brexit. Normally the EU would be keen to give a newly elected leader the cover of at least cosmetic changes to the deal so he can claim it as a victory, but I doubt that would be the case with Johnson. Politics will have moved on in Brussels as well as London, and no one will be keen to re-open a deal so painstakingly, and painfully negotiated.
Instead the EU27 will have been methodically preparing for a no deal Brexit while Johnson bluffs and blusters on. It is just possible that the EU27 will offer Johnson his preferred Canada +++ style trade deal in the political declaration in return for his agreeing to throw the DUP under a bus and effectively retain N. Ireland within the Single Market and Customs Union. If the DUP vote it down he can call a general election as a proxy for a referendum on his new deal.
If Corbyn is smart he will make negotiating better access for Britain to the Single Market and Customs Union the central plank of his campaign, and offer to hold a second referendum on the outcome of the negotiations where voters will be given the choice of Remaining or Brexiting on whatever terms he can negotiate. Giving voters a second choice will help him to retain the support of both Brexiteers and Remainers within his party. The rationale will be that you call one vote for industrial action, and then a second on whether to accept the results of the negotiations.
I would expect Corbyn, possibly with the support of the Scots Nationalists and Plaid Cymru, to be successful in forming the next government, and proceed to seek an extension of the A.50 negotiating period in order to give time for renewed negotiations and a second referendum to take place. I would expect the EU27 to be heartily sick of the whole process by then, but the promise of a second referendum containing an option to Remain may be sufficient to achieve the required unanimous agreement of the EU Council.
Naturally, not being dependent on the DUP and being in favour of a united Ireland in any case, Corbyn will have no difficulty in allowing N. Ireland to remain within the Single Market and Customs Union. His main focus will be to try and get as many of the same benefits for the UK while regaining some increased Independence from Brussels in key Labour priority areas like state aid for companies, public ownership of utilities, and increased taxation for multi-nationals. A very different kind of post-Brexit deal to that sought by the Tories.
But there will be great public shock and anger when UK public opinion discovers that the EU price tag for giving access to the Single Market - a la Norway - is not all that much different than the net cost of full EU membership at the moment. But at that stage it will be too late - the no deal option will have been taken off the table. The second referendum will offer only two options: Remain or accept the Brexit terms as negotiated by Corbyn. Many in the UK will be tempted to vote for Brexit anyway, as anti-EU feeling will have been increased by perceived EU intransigence, and in the belief that better terms can always be negotiated later.
But then the EU27 will also need to box clever if they want the UK to vote Remain in the second referendum. Rather than simply giving UK voters a choice between Brexit and continued membership of the EU status quo as it currently is, the EU should seek to transform the debate by issuing a political declaration setting out their plans to reform the EU in the future. This would be akin to the political declaration on the future relationship between the UK and the EU27 accompanying the Brexit agreement.
The EU has been in constant evolution in any case, and many EU members and Commission Directorates will have plans for future reforms/developments/extensions of competencies and services in any case. The challenge would be to bundle these into a coherent document outlining a vision for what the EU will look like in the future, and getting it passed, in principle, by a weighted majority on the Council. It would also be critical to ensure that the Corbyn government has had some input into the development of this vision. Effectively you would be setting up a second negotiating strand, one for the revised Brexit deal, and one for any agreement to remain.
For many UK voters, voting to Remain in a second referendum would feel like a humiliation, even if they had voted Remain in the first referendum. It would signal a loss of confidence in being able to make their own way in the world; a failure of negotiation; a failure of democracy, and a failure to stand on their own two feet. Asking people to go back on a decision previously made would simply be rubbing it in.
What the EU27 would have to do is to transform this narrative of humiliating failure into one of a new opportunity to be part of a changed EU more in tune with UK sensibilities. People would not be asked to vote for the pre-A.50 status quo, but for an opportunity to be part of a change process within the EU in the future. It would almost be like voting to re-join a changed EU, with the Brexit debate being given some credit for acting as a catalyst for this change.
It matters little in the short term how substantive those "reforms" of the EU eventually turn out to be. The key point will be to give voters an opportunity to change their minds in changed circumstances without feeling that they have been humiliated into doing so. Corbyn will have very different priorities for a EU membership in the future in any case. It remains to be seen how receptive an EU increasingly dominated by centre right and far right parties will be to his ideas for reforms. My guess is not very, and in many instances that will be a pity.
But elections have consequences, and those consequences are not confined to the UK. My hope would be that the whole Brexit episode will be a salutary lesson for all extreme nationalists hoping to hijack the political agenda in their home states in order to leverage sectional advantage against the common good. Just as Brexit could transform the political climate in both the UK and EU, and generally not in a good way, a failure of Brexit could refocus minds on the benefits of working together to address common challenges.
Brexit has been a monumental distraction from the challenges presented by global climate change, migration patterns, growing inequality, government austerity, and a failure of the public good to trump private greed. It has sought to harness the forces of national chauvinism, voter alienation, disaster capitalism, and political narcissism in the service of national elites "taking back control" in order to leverage their interests against the common good more effectively. So far it is too early to say when and if that tide can be turned. The November mid-terms in the USA will be instructive, but defeating the forces behind Brexit has to be a priority for any progressive political agenda.
The scenario painted above contains too many "ifs" and "buts" to be the most likely scenario. It is probably less likely than a no deal Brexit with disastrous consequences. However we must hope for the best, even as we prepare for the worst. The main thing is that it is still possible to imagine a better alternative future. There is still a glimmer of hope.