May Risks Becoming A Victim Of Her Own Brexit Red Lines – OpEd

By Cornelia Meyer*

A recent cover page of renowned magazine The Economist called Brexit “The mother of all messes.” The editors might have been on to something.

When Theresa May brought her hard-negotiated Brexit deal in front of the House of Commons in early January, she suffered the biggest defeat by a sitting government in the history of the institution. Ever since then, it has been amendments galore in Parliament. A myriad of backbenchers tabled motions containing issues that are close to their hearts, while the prime minister engaged in a flurry of talks across party lines and within her Conservative Party.

Tuesday was another big Brexit day. An amendment to rule out a disorderly Brexit achieved 318 votes in favour and 310 against. While this might sound encouraging, the amendment is non-binding and a no-deal Brexit remains a clear and present danger.

Labour heavyweight Yvette Cooper’s amendment to extend Article 50 by up to nine months was defeated by 311 votes to 298. With this vote, parliamentarians inadvertently showed some insight. For one, it is unclear what good kicking the proverbial can further down the road could achieve. Secondly, Austria’s Foreign Minister Karin Kneissl has pointed out that the European Parliament elections in late May constituted a hard stop for negotiations.

May finally achieved a victory of sorts when Graham Brady’s amendment to replace the Irish backstop with “alternative arrangements to avoid a hard border” passed. The Irish backstop is an arrangement whereby Northern Ireland would remain in the EU’s customs union, while Great Britain remained a lesser affiliate, in case no agreements on the future trade relations between the EU and UK could be reached during the 21-month transition period.

After months of insisting that her deal was the only one on the table, May agreed to this amendment. She may have achieved a temporary victory, but it is most unlikely she will achieve anything in Brussels. European Council President Donald Tusk was quick to underline that the backstop could not be renegotiated — neither with a time limit nor by a clause that would allow the UK to terminate it unilaterally. European Commission President Jean-Claude Juncker and EU Chief Brexit negotiator Michel Barnier sang from the same hymn sheet, with the latter reiterating that the 27 member states would not budge.

Indeed, at this point, it is only those 27 heads of government that could agree to any amendment and they do not look poised to do so. The EU-27’s stance is understandable against the backdrop that the backstop is important to the Republic of Ireland, whose biggest trading partner is the UK. Irish Taoiseach Leo Varadkar played his cards well, both internally and within the EU. He first secured cross-party approval for his backstop position. In other words, he does not have to contend with opposition politicians undermining his stance.

This is precisely what May failed to do by leaving it so late to engage in cross-party deliberations. Worse, the constant twists and turns in Westminster and the apparent inability to reach a consensus put at stake Britain’s reputation as a reliable partner on the international stage. 

The problem is that the Brexit debate has split the country right down the middle. A recent survey showed that party political affiliations matter less to everyday Britons than where they stand on Brexit. Forty-four percent of people questioned said they felt strong identity on the Brexit issue and 33 percent opted for fairly strong. Put this against how they voted on party identity, where only 9 percent had a strong identity and 28 percent fairly strong.

This means that the leaders of the two major parties, Jeremy Corbyn and May, risk splitting their parties over Brexit. Therefore, both have sadly put party before country when it comes to the Brexit debate. They also left it late to engage directly. They finally met for the first time on Wednesday and promptly talked cross purposes. May might have listened to Corbyn’s demand to remain in the customs union, but she is unlikely to budge.

Tuesday’s victory of sorts will in all likelihood be short-lived. May will not get her amendment from the EU and will suffer another crushing defeat in Parliament in two weeks’ time. The question remains whether the PM would not have been better advised to take a middle road, which would leave the country more closely aligned to the EU than caving in to the hardline Brexiteers and the Democratic Unionist Party. The way the arithmetic works at this point, this might have given her a more sustainable cross-party majority. But then, if British politics has taught us anything of late, it is that majorities on Brexit are tenuous and hard to come by at best.

May’s troubles really started with her January 2017 speech at Lancaster House, where she delineated her red lines: Two of them being to leave the customs union and the common market. This catered to the Brexiteers in her party. However, senior civil servants were apparently taken aback by her bold statement. She apparently failed to engage in in-depth consultations with them before announcing her position. This would have been important, because the civil servants and business have the best visibility of what the customs union means to the British economy on a day-to-day basis. By laying down so many red lines so early, May painted herself into a very difficult corner from the word go.

In the meantime, March 29, when the UK is officially due to leave the EU, is coming ever closer. As of Thursday, 57 days and counting. Businesses are readying themselves for the worst. Barclays just obtained permission from the High Court to move £166 billion ($218 billion) of its very profitable derivatives business to Ireland. The Royal Bank of Scotland is poised to follow suit. Profits mean taxes for the Treasury, so the UK is currently doing its best to undermine its tax basis. At the same time, the incoming head of the UK’s largest port in Dover says he does not see how goods can move across the country smoothly in the case of a no-deal Brexit.

Politicians have put party above country for so long that we are running out of time now. While a no-deal Brexit is not a foregone conclusion, it is a distinct possibility, which is perilous for the country, its people, and the economy.

• Cornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources