You are here

COMMENTARY

'No-deal' risks increase amid Brexit imbroglio

THE House of Commons failed, decisively, to clear the Brexit fog on Tuesday night. While a non-binding amendment was passed which technically rules out a UK crash out from the EU, such "no-deal" risks have potentially grown as MPs sent out mixed, confused messages about their Brexit stance.

In effect, MPs declared that while they reject a "no-deal" Brexit, in principle, they also reject the power themselves to stop a "no-deal" outcome, at least for now. This is because stronger amendments considered on Tuesday, which would have allowed greater say for the House of Commons to, for instance, extend Article 50, were not approved.

The amendments considered fell into several different categories, including indicative vote amendments, stopping no-deal amendments, and so-called anti-Irish backstop amendments. The indicative amendments all failed which prevents, for now at least, MPs having votes on a series of Brexit options from the hardest to softest of exits to see where most support lies.

Only one of the stopping no-deal amendments passed, and this is non-binding. This amendment by Conservative MP Caroline Spelman and Labour MP Jack Dromey "rejects the United Kingdom leaving the EU without a withdrawal agreement and future framework for the future relationship".

sentifi.com

Market voices on:

Yet, other stronger stop no-deal amendments, including to extend Article 50, were shot down. One example here was that sponsored by Labour MP Yvette Cooper and Conservative MP Nick Boles which was controversial because it was constitutionally innovative inasmuch as it would have significantly empowered Parliament in relation to the executive in the weeks ahead.

By convention, mostly the government controls the business in the Commons - that is, what gets debated - which means it decides what gets to become law. But the Cooper and Boles amendment would have created time for a bill that the government would never table itself to be passed in February.

With the failure of this and other comparable amendments, and the passage of the Spelman-Dromey amendment, Parliament has sent out a confusing, mixed message. As Ms Cooper and Mr Boles said on Tuesday night, "today, MPs have voted to stop a no-deal Brexit. We did not get enough support to ensure there could be a binding vote to avert no-deal or require an extension of Article 50 if needed. We remain deeply concerned that there is no safeguard in place to prevent a cliff edge in March if the prime minister does not agree a deal in time".

A third set of amendments was related to the proposed Irish backstop which, of course, is a key part of the withdrawal deal Prime Minister Theresa May has negotiated with Brussels. One of these amendments, from Conservative MP Graham Brady, passed, which calls for the "Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border (between the Republic of Ireland and Northern Ireland); supports leaving the EU with a deal and would therefore support the withdrawal agreement subject to this change".

Speaking after Tuesday's voting, Mrs May seized on the Brady amendment, claiming that the basis for a withdrawal deal in Parliament is now clearer. While she acknowledged the "limited appetite" for such a change on the part of the EU, which could yet prove a significant understatement, she believes she can now go back to Brussels for a renegotiation that gives changes to the backstop to get approval of MPs before end-March.

In perhaps a last throw of the dice, Mrs May will now cling to this potential opening and she said Tuesday that "what I'm talking about is not a further exchange of letters, but a significant and legally-binding change to the withdrawal agreement". Yet also on Tuesday night, EU Council President Donald Tusk said that the withdrawal deal cannot be reopened for negotiation in any way, shape or form.

DIFFERENT INTERPRETATIONS

Unless compromise is more evident from one or both sides, this raises the prospect of a "no-deal" exit, despite the non-binding amendment passed in the Commons Tuesday. Throughout much of 2017 and 2018, the prospect of such a crashing out was widely dismissed, including by the UK government itself. However, to the horror of many MPs, this scenario is rising as a strong possibility with some legislators now believing it to be the most likely outcome.

The term "no deal" is widely misunderstood by much of the UK public, let alone international audiences. It means a situation whereby the United Kingdom and EU fail to agree a withdrawal agreement under the terms of the two-year Article 50 process which began in March 2017.

This scenario would mean that London will automatically leave the EU on March 29 without many, if not all, of the rules that regulate the UK's relationships with the EU. And, also, many economic relationships with the rest of the world too will be undermined as these are underpinned by trade treaties that the Brussels-based club has agreed with key nations from Canada to Japan.

Yet, many are still confused about the "no-deal" terminology for a range of reasons. This includes some who believe, wrongly, that it refers to a scenario where a withdrawal deal is ultimately signed by London and Brussels, but no agreement on a future relationship is reached in coming years.

Another common error held by some is that there is only one "no-deal" outcome, when there are actually plausibly multiple "no-deal" scenarios. At the extreme end of the spectrum is a chaotic "no-deal" Brexit whereby negotiations between Brussels and London break down acrimoniously with the latter refusing to pay the £39 billion (S$69 billion) in a divorce deal, and the EU refuses to put any mitigating measures in place, including a transition period.

This chaotic option, even now, seems unlikely, but cannot be completely dismissed. It would be a grave political failure if both sides cannot - minimally - agree to mitigating agreements in areas such as medical supplies to cushion the impact of a "no-deal" outcome but this remains a possibility despite the massive potential problems that could ensue.

Taken overall, Tuesday's votes have sent out a confused, mixed message and could have significantly increased the prospect of a "no-deal" Brexit, despite the Dromey-Spelman amendment. Much now depends on whether Brussels is bluffing in its strong stance against reopening the withdrawal treaty and this issue will come to a head in February as the clock ticks down to March's deadline.

  • The writer is an associate at LSE IDEAS at the London School of Economics.

READ MORE: Will EU bend to May's mandate for changes to Brexit deal?