After a No Deal Brexit

Posted on

We really are losing control of language and this is not helping understand probabilities. No Deal is what happens unless something else happens. A small number of people actually want this but most do not. But you cannot abstractly rule out no deal. We jumped out of an airplane when we choose to trigger article 50. We have a number of parachutes on offer, PM May’s deal, a Labour inspired customs union, an extension to article 50. Unless the government pulls one of the these parachutes we will hit the ground. The only way not to hit the ground is to pull a parachute. Ruling out no deal is logical and probabilistic nonsense. It is highly likely (85%) we will hit the ground and here is why.

For Prime Minister May’s deal to pass 120 MP have to change their mind and some never will. Those that voted for the Brady amendment will if the backstop is changed so that it is no longer the guarantee it was designed to be. Arguments about whether this is in the codicil, side agreement or political declaration are beside the point; each are merely the instrument. We are well past the point where a form of words can usefully mean two things to two different groups. The EU have understood this but PM May seems not to have. So for the PMs deal to pass, the EU has to favour UK which is leaving over Ireland which is staying and there is no sign of that. Or the British MPs who voted against the May deal have to give up.

Some will but it is very unlikely enough will. This is because the backstop is not just an insurance safety net, as drafted, but in fact a bridge to a full customs union. The EU has been completely consistent that the most likely reason the back stop will not be needed is if the EU and UK end up in a full customs union. Anything short of that and the backstop is needed. ERG know this very well. PM May’s gamble that enough MPs will blink at the last minute is just that; a gamble. There are not enough Labour rebels who would vote for PM May to offset the ERG members who never would. May’s deal is dead and EU language massage is insufficient. Her problem is that Corbyn will never whip for the May deal.

Corbyn might whip for a deal if the Political Declaration pointed clearly at a customs union. But if PM goes for a customs union, a Brexiteer party revives and the conservative membership base revolts. So she is prevented from tacking Remain by the Conservative Party membership.

So she could ask for an article 50 extension but will almost certainly be doing so without any positive reason or policy. Furthermore an extension requires the unanimous support of all EU countries which is unlikely. Italy might vote against as as favour to ERG. France might well veto to demonstrate the costs of leaving are high and to remind UK of their own influence in the follow up negotiations. Others might veto if they got concessions. In short, an article 50 extension is possible but unlikely. The Malthouse Amendment is attractive to UK but is in effect a 3 year extension for Article 50 with the no-deal negotiating leverage put back in UKs hand, which is why the ERG like it and the EU will not.

So that is all the parachutes. Corbyn is in effect fine with No Deal as long as it does not have his fingerprints on it. Some Tories, think No Deal is not such a problem. Others that it is preferable to Brexit for Forever and that the pain of No Deal will have dissipated before the General Election. None or all of them maybe wrong but it is how they think.

So we have a situation where the No Deal which is nearly everyones least preferred option is nevertheless the most likely. By far. What then.

If PM May loses her final vote within days of the 29th then UK probably crosses the line asking for an extension to article 50, which would not be granted. Most likely Conservatives would want to replace PM May and could do so by threatening to freeze all legislation making government business impossible. This gets around the fact she has a protected year following the last leadership challenge