Brexit: What Happens Next?
Yesterday in a historic vote, Theresa May’s Brexit deal was voted down
Written in conjunction with Ed Taylor, Simon Pugh, Meredith Williams, Matt McCarthy, and Lincoln Hill
Summary:
May loses vote by unprecedented margin
Corbyn calls no confidence vote to take place today
DUP and Conservative rebels rally around the Prime Minister meaning she is likely to win
Extension to Article 50 increasingly likely to be asked for; the EU will need a justification
State of Play
There we have it. Last night’s vote on Theresa May’s Brexit deal was the biggest defeat in Parliament’s history, and as a number of media outlets have said, an embarrassment for the Government. The defeat itself was not a surprise, but the scale of it — with 230 votes against, 118 from her own benches — is unprecedented.
This is not just a damaging defeat for the Prime Minister, but it is also a blow to the European Union.
May is resolute, and determined to press on. In a statement immediately after the vote, the Prime Minister announced how she plans to proceed, hoping to unite Parliament around a deal that can be agreed. In response, Labour leader, Jeremy Corbyn tabled a motion of no confidence in the Government, with a debate set to take place this afternoon followed by the vote.
European leaders reacted to the vote quickly, with President Juncker asking for the UK to clarify its intentions, and Council President, Donald Tusk questioning whether the UK should cancel Brexit altogether. EU chief negotiator, Michel Barnier’s response was more considered, saying the EU27 will stay united and determined to reach a deal.
What This Means for the Government
In ‘normal’ times it is difficult to see how any Prime Minister wouldn’t have resigned. Some argue that she now is in a stronger position: her Party cannot remove her as the Leader because the failed challenge in December cannot be triggered for another year and today’s confidence motion in her Government is likely to show there aren’t the numbers in Parliament to pass it.
Senior sources within the Government suggest that it will now seek to extend Article 50, which initiated the withdrawal from the EU, but emphasise that this is not just a domestic UK matter. In order for any extension to be agreed, the EU will demand evidence of ‘concrete’ justification that suggests a genuine and new position emerging from the UK. It is unlikely that any position will be found within the next week.
The Prime Minister remains in a position where she is being pulled by various factions in Parliament that transcend party political lines, her own Party, her Cabinet, the EU and the responsibilities of office. As she made clear last night, she will now seek to form a consensus across the House of Commons.
The Prime Minster has a strategic decision to make where she will have to assess how she can secure the majority of votes for a way forward. All the signs, combined with Parliamentary arithmetic, suggest that we are now going to see the Government pivot toward a ‘softer’ Brexit as the UK’s position toward the future relationship.
The No Confidence Motion
The motion “that this House has no confidence in Her Majesty’s Government” will be debated, with the vote expected at around 7pm.
Will the motion pass?
The Conservative Party is badly divided and her Cabinet is split. Behind closed doors, she is being advised that she needs to demonstrate that she retains the support of Brexiteers. We should therefore expect to see a senior Brexiteer, perhaps Michael Gove, give a rabble rousing Parliamentary performance concluding the debate in favour of the Government.
The Democratic Unionist Party (DUP), who the Conservatives rely on to command a majority in the House, has been clear and consistent that the Party’s ten MPs will continue its Confidence and Supply Agreement and support the Government in a vote of no confidence, on the basis that the Withdrawal Agreement has been defeated, but we are in uncharted waters.
Within minutes of last night’s defeat, and despite voting against the Prime Minister, the Party restated its commitment to support the Government in the vote today. As a result, it’s unlikely that Jeremy Corbyn can secure the numbers of MPs needed to vote down the Government.
If the Government survives, and so long as there are no further proposals by the Government to treat Northern Ireland differently than the rest of the UK, it would be expected that the DUP will seek to negotiate a further Confidence and Supply Agreement to secure the Conservatives in Government for the remainder of this Parliament.
But if it does…
If the no confidence motion passes, MPs then have a strict 14 day timeline to form a new Government that is supported by a majority of parliamentarians.
If 14 days pass and no alternative Government has been formed (and secured the confidence of the House), Parliament will be dissolved and at least 25 working days later an early general election will take place.
It’s important to note that regardless of the result, Jeremy Corbyn can push to table further no confidence motions at the discretion of the Speaker at a later stage. For that to happen, the Speaker will have to decide if the circumstances have changed significantly enough for it to be debated. The defeat of another deal could create such circumstances.
Prospects of a Second Referendum
If today’s no confidence motion fails, Labour’s preferred option of a fresh General Election is off the table, for now. The policy agreed at Labour Party conference last September says “if we cannot get a general election Labour must support all options remaining on the table, including campaigning for a public vote.”
A second referendum, however, does not have the Parliamentary numbers either. Within the Labour Party there are around 100 MPs currently publicly supporting a People’s Vote but it is likely more than 50 are against. Even with Scottish Nationalist Party (SNP) and Liberal Democrat support there are not nearly enough Conservative MPs who support a second vote for it to pass.
What Could Another Deal Look Like?
Another deal requires two fundamental conditions to be satisfied: the support of the UK Parliament and the support of the EU.
The Prime Minister, of course, could offer a major concession to shift the 115 votes necessary to pass her deal. But it is unclear what such a deal would look like.
There is a possibility that a permanent, full Customs Union with the EU or legally binding limits on the backstop could possibly secure support. The EU, however, will not agree to those changes to the backstop. The EU would allow the UK to remain a member of the Customs Union.
Moreover, Jeremy Corbyn, and other Labour MPs such as Yvette Cooper and Hilary Benn, could support that concession. In terms of pure Parliamentary arithmetic, it would work. It would, however, require sacrificing an independent trade policy, which would lose the Prime Minister further Conservative votes and probably her good name in the Conservative Party. It is poisoned chalice she has resolutely refused up to now.
No Deal
The default legal position is that if no Withdrawal Agreement can be ratified by both the UK Parliament and the EU institutions then the UK leaves the EU on 29th March with no deal. Sterling remained stable on the overnight currency markets which is being interpreted as a prediction that no deal is unlikely. This position is supported by a number of financial institutions.
Proponents for a “managed no deal” are keen to push the position that there are a number of points within the current withdrawal agreement that both sides agree on that could be implemented immediately. What this misses is the principle that “nothing is agreed until everything is agreed” and the EU had never indicated that the Withdrawal Agreement could be cherry picked; most crucially, it comes with £39bn price tag.
Other Considerations: Routes to a General Election and Uniting Cabinet
There is a possibility, however remote, that Theresa May will look to break the Parliamentary deadlock by calling another snap election as a means of altering the Parliamentary arithmetic and avoiding a second referendum. She would certainly have the two-thirds majority she needs in order to do so under the Fixed-Term Parliament Act.
Currently the Cabinet seems to be stable and publicly united. But she is well aware of the various factions and will need to ensure that there are no grandstanding resignations.
If you would like to discuss Brexit and what it may mean for your organisation, please do get in touch:
Anthony Marlowe, Managing Director, Corporate Affairs at AMarlowe@webershandwick.com
Edited by Helen McCarthy
