Idiot's Guide to Brexit 1

In June 2016, the UK Brexit referendum asked voters “Should the UK Remain in the EU or Leave the EU?” They voted to Leave by 51.9% to 48.1%.

May’s government pushed the “start” button on the Article 50 exit process on March 29, 2017. Under the terms of Article 50, this means the UK will leave on March 29 of this year unless the UK and the EU agree to postpone the date, or unless the UK unilaterally decides to terminate the Article 50 process and remain in the EU.

EU membership includes a committed to the “Four Freedoms”: the free movement among member countries of people, goods, services and money.

“Hard Brexiteers” want the UK to walk away from all four freedoms on March 29, 2019. However, softer Brexit supporters have accepted that the status quo for trade in goods should be maintained during a transition period while new trade arrangements are being negotiated with the EU. This softer Brexit position became the policy of May’s government after it pushed the button on Article 50.

At the end of 2018, the EU and May’s government reached a detailed (562 page) exit agreement providing for a two-year transition period during which the UK would remain part of the EU’s customs union. And for as long as the UK remains a member of the customs union, the UK would have to accept any new new trade rules coming from Brussels, would have no say in the writing of those rules, and would be prohibited from concluding trade agreements with other countries.

May had attempted to negotiate the right to exit the customs union unilaterally at the end of the transition period, even if no new trade agreement had been reached. However, the EU refused out of concern that the border between the Republic of Ireland (EU member) and Northern Ireland (part of the UK) would become a “hard border” if trade between the UK and the Republic of Ireland were no longer free, as it is currently under the customs union.

The May/EU agreement therefore included the “Irish backstop” -- a provision that the UK could not leave the customs union until arrangements satisfactory to the EU had been worked out that would allow the border to remain as “soft” as it is today.

“May’s Deal” (as the May/EU agreement is known in UK) was decisively rejected by Parliament in January. Many of the votes against were cast by “hard Brexiteers” for whom the right to leave the customers union unilaterally is non-negotiable.  (The hard Brexiteers are an organized faction of Tory MPs known as the European Research Group (ERG) led by an Old Etonian (though still in his 40s) named Jacob Rees-Mogg. Boris Johnson is also card-carrying member of the ERG.)

The other votes against May’s Deal were cast by Remainer MPs, MPs who want a second referendum, and almost all Labour MPs. Labour’s official position calls for Brexit with a permanent customs union, but including the right to participate in writing trade rules in Brussels. The problem with that position is that the EU appears no more interested in granting the right to participate in rule-writing than they are in allowing the UK to exit the customs union unilaterally.

Following the defeat of May’s Deal in January, she agreed to return to Brussels in an attempt to win a concession on the unilateral exit at the end of the transition period. Although there have been several meetings, all indications are that the EU is standing firm on its refusal. Meanwhile, the movement among MPs in Parliament to “take control” of the Brexit process away from May appears to be gaining momentum, and this may happen in a vote scheduled for February 27. If the resolution passes, May would be forced to ask the EU for an extension of the March 29 exit date.

The ERG, meanwhile, is saying that if Article 50 is extended, they will refuse to vote on legislation on any issue coming before Parliament. In that case, May would either have to form a coalition with Labour to keep the government running, or call for new Parliamentary elections.

Any extension of the March 29 deadline, however, would have to be approved unanimously by all 27 EU members.  However, while it’s possible that all 27 will decide to kick the can rather than force the UK to leave with No Deal, it is quite possible that the EU will not agree to an extension unless they get an answer they like to the question, “extend for what?”  One answer they would probably like is “extend for a 2nd referendum.” But they probably would not like the answer “extend to give us time to come up with some new ideas and we’ll get back to you.”) 

The current situation can be seen as a multi-party game of chicken among May, the EU, the ERG, the soft-Brexiteers, the supporters of Remain or a 2nd referendum, and the Labour party.

One such game pits the hard Brexiteers against the EU. Each group believes (or pretends to believe) that the other has more to lose from a no-deal Brexit than it does, giving it the leverage to demand whatever concessions it wants.

Conventional wisdom is that no agreement among EU members on controversial issues is ever reached until the 59th minute of the 23rd hour.  The expectation, therefore, if either the UK or the EU is going to blink, it won’t do so until March 28.

This is still 35 days away, and so far, neither side has suggested any willingness to compromise on the key issue -- the UK’s demand for the unilateral right to exit the customs union after the transition period.

If May is able to defeat the attempt in Parliament to wrest control away from her on February 27, she seems likely to continue her game of chicken by running out the clock -- delaying as long as possible putting any new plan up for a vote in Parliament, and continuing to insist that it’s “my deal or No Deal.”

For all except the ERG, No Deal is the one outcome that is more unpopular than May’s Deal. (So far, the only resolution on Brexit options that has been accepted by a majority of MPs is one that says “No Deal ls unacceptable.” Every other resolution on the alternatives has been rejected.) May’s strategy, therefore, is to force Parliament to accept the less horrible outcome.

The supporters of Remain and of a 2nd referendum may play their own game of chicken with May, assuming the February 27 attempt to extend the deadline fails. They will wait for May finally to come back to Parliament and announces that she has been unable to persuade the EU to accept unilateral withdrawal, insisting that it is therefore “my deal or No Deal.”

At this point, the Remain/2nd referendum group may call May’s bluff by rejecting her deal. They will be betting that when forced to choose between a 2nd referendum and No Deal, which a majority of MPs and May herself have repeatedly rejected, she will finally ditch the ERG and agree to a 2nd referendum, which she has also repeatedly rejected.

What May might then do, however, is play chicken with the ERG, by threatening that if they don’t back her deal, she will accept a 2nd referendum. Some or all of the ERG may reluctantly agree, or some or all my call May’s bluff and say no.

Then there is Labour. The leader Jeremy Corbyn has so far refused to swing his party behind eny of the groups who are challenging May, although Labour did support the resolution saying that No Deal is unacceptable.  The success of the attempt to wrest control from May on February 27 largely depends on whether Corbyn backs it, or if not, whether enough Labour MPs defy him. Earlier this week 7 Labour MPs resigned from the party in protest against Corbyn’s position, and said they will vote to extend on February 27

Corbyn’s strategy is different from the rest because he has a different objective. He apparently doesn’t care very much about Brexit one way or the other so long as he can become Prime Minister, so his goal is to force a new election. While the Tories currently have a 7-8 point lead over Labour in the polls, were the Tories to choose an ERG member to lead them into the election, Corbyn might have a good shot at winning the prize.

Finally, there has been little public discussion of what the question would be if there were a second referendum, perhaps because the idea faces strong and broad opposition. Many MPs in both parties dismiss the idea as “undemocratic” because “the people have already voted.”  They dismiss the view that Leave voters had widely divergent ideas about the meaning of “Leave” by insisting (unhelpfully) chanting another mantra: “Leave menas Leave.” Actually, we are now discovering that Leave means whatever the ERG says it means.    

However, if there were the will to have a second referendum, I believe the way to do it is to use the French two-round voting system where voters choose among several candidates in the first round, followed two weeks later by a second round where they choose between the top two finishers in round one.

In the first round of a second Brexit referendum, the choices would be Remain, May’s Deal, and No Deal. Unlike the first referendum, where voters were free to believe whatever they wanted about the meaning of “Leave,” we now have a 562 page document explaining the meaning of May’s Deal. As for No Deal, to the extent that it was mentioned at all in the first referendum debate, it was dismissed as wildly implausisble. The public now understands that it means trade with the EU and the rest of the world under WTO rules, requiring hard borders everywhere, including in Ireland.

Also, in the first referendum voters were free to believe that “Leave” meant things that the EU would never agree to, such as “Have our cake and eat it too.” In the 2nd referendum, by contrast, May’s Deal has been accepted by the EU, No Deal doesn’t require EU consent.