22 Sep 2018

Brexit: What's next?

9:21 pm on 22 September 2018

Theresa May has warned that the Brexit negotiations are at an impasse and there will be no progress until the EU treats her proposals seriously.

Britain's Prime Minister Theresa May.

Britain's Prime Minister Theresa May. Photo: AFP

She has accused EU leaders of showing the UK a lack of respect after they rebuffed her Chequers plan without, she said, any alternative or explanation.

With the clock counting down to the UK's scheduled exit on 29 March 2019, where does this latest row leave the chances of a deal and what could happen next in the Brexit process?

Beyond Salzburg

Thursday's gathering of European leaders in Salzburg was supposed to help bridge outstanding differences and pave the way for a potential deal by the middle of November at the latest.

But instead, it has driven a wedge between the UK and the EU, with accusations of bad faith and "un-statesmanlike" behaviour.

Mrs May has said the two sides remain "a long way" apart on the crucial issues of how the UK will trade with the EU after Brexit and the future of the border between Northern Ireland and the Republic of Ireland.

She reiterated again her belief that her Chequers blueprint was the only way of properly implementing Brexit and also ensuring a "deep and special partnership" with the EU in the future.

The PM, visibly angered by the reception she got from her fellow leaders in Austria, also rejected the two options put on the table by the EU - a Norway-style association agreement and a much looser relationship based on Canada's trade deal with the EU.

For its part, the EU has said the Chequers plan is unworkable as it fragments the single market.

The next few weeks will be crucial if these differences are to be resolved and the two sides are to fulfil their shared aim of an orderly Brexit and an outline agreement on trade, security and other issues.

The Conservative conference (30 September)

Mrs May has suffered plenty of Brexit setbacks in the past and soldiered on and it looks like she is determined to do so again.

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Photo: AFP / FILE

The only problem is that many of her own MPs don't think she is going about the process of leaving the EU the right way.

The number of Tories who say they won't vote for the Chequers plan seems to be growing by the day and, remember, any deal she negotiates with the EU has to get through Parliament.

There is enormous pressure from the Brexiteer-wing of the party for her to rip up Chequers and throw her weight behind a turbo-charged version of Canada's deal with the EU.

The so-called Canada Plus Plus option, which removes most customs duties on goods but without paying for access to the single market, is backed by Boris Johnson, David Davis and Jacob Rees-Mogg, among others, who believe the UK Parliament will vote for it.

Many Conservative Remainers, like former minister Justine Greening, have also lost faith in Chequers and think there should be a referendum (more of that later) while some Tories think the UK may well end up in a temporary European Economic Area-style arrangement, sometimes called the Norway option.

This would mean accepting the free movement of people and the indirect recognition of European Court of Justice rulings - but would allow businesses access to the EU single market, with some strings attached.

Amid speculation about further cabinet resignations if she persists with Chequers, calls for the PM to think again are likely to reach a crescendo at the Conservative Party conference in Birmingham.

If the PM does not shift on the substance of her Chequers plan, expect much frenzied talk of leadership challenges.

Decision time in Europe (November)

Salzburg may have caused a dust-up but it hasn't changed the underlying reality that both sides want as amicable a divorce as possible.

Some Tory MPs favour a clean break with the EU, which would see the UK fall back on its membership of the World Trade Organization, the global body governing international trade, but they are in a minority.

Both sides are ramping up talk of no-deal contingency planning.

But they also know that such an outcome would be seen as a political failure and a disaster for business - particularly as the 21-month transition period planned after Brexit day would be scrapped.

A summit on 18-19 October of EU leaders was, for a long time, pencilled in as the moment that the two sides would have to look each other in the eye and reach a deal.

However, this is not now seen as feasible and the focus is on a special one-off summit that has been arranged for mid-November.

An agreement then, the thinking goes, would still allow enough time for the UK and European Parliaments and a supermajority of European states - that's 20 out of 27 - to ratify any deal before the 29 March deadline.

So, the clock is ticking but the EU is renowned for finalising deals at the 11th hour and it wouldn't be the first time the talks have seemed on the brink of collapse only for a deal to be pulled out of the fire.

The Parliamentary showdown (December-February)

If she brings a deal back from Brussels, Theresa May has another big hurdle to negotiate. She must persuade Parliament to back it, in a vote likely before the end of the year or in early 2019.

Tory Brexiteers opposed to Chequers have suggested up to 80 MPs would be prepared to vote against it.

Although we don't know what the final deal will look like and the size of any rebellion would, in all likelihood, be much smaller, even a dozen Conservatives defying the leadership would risk defeat for the PM, with her non-existent Commons majority.

The opposition parties are unlikely to come to the PM's aid, with Labour saying any deal is unlikely to pass its six tests guaranteeing workers' rights and all the "benefits" of the single market and customs union.

The Labour leadership is hoping to inflict a defeat as a way of triggering a general election.

Brexit Day, another referendum or general election? (2019)

Demonstrators carry placards as they participate in the People's March demanding a vote on the final Brexit deal, in central London on the second anniversary of the 2016 vote.

Demonstrators carry placards as they participate in the People's March demanding a vote on the final Brexit deal, in central London on the second anniversary of the 2016 vote. Photo: AFP

It is written into law that the UK will be leaving at 23:00 GMT on 29 March 2019, two years to the day after the government notified the EU of its intention to quit, by triggering Article 50 of the EU's Lisbon Treaty.

But if there is no deal or Parliament rejects the deal, we are in uncharted territory and it is impossible to say with any certainty what will happen next.

Mrs May has insisted the 2016 referendum result will not be overturned but if Parliament cannot agree on what kind of Brexit it wants, a fresh public vote might yet end up being the only way to break the deadlock.

There are a growing number of people who believe this is the case, although they are largely confined to people who voted Remain in 2016 and they can't all agree on what question should be asked on the ballot paper.

The Liberal Democrats and the cross-party People's Vote campaign, backed by about 30 Labour MPs, five Conservatives, the four Plaid Cymru MPs and Green MP Caroline Lucas, wants the option to stay in the EU to be put before voters.

Nigel Farage at an EU Referendum campaign in 2016.

Nigel Farage at an EU Referendum campaign in 2016. Photo: AFP / FILE

Critics say there won't be enough time for another referendum - and Mrs May has explicitly ruled out extending the two-year Article 50 process, amid reports EU leaders might be open to that.

However, and it is a big however, should Mrs May resign in the event of her deal being rejected, her successor would have a new mandate.

Some European leaders believe Brexit can be halted but, in the absence of a referendum, the only other way this could conceivably happen is if there were a general election before 29 March next year.

A new government with a majority would have the power to delay or reverse the process but whether it would have the desire - given Labour's policy so far has been to respect the Brexit vote - is another matter entirely.

If the UK does leave as planned, it is far from the end of the story.

It is only then that discussions about future co-operation - including a trade deal - will really begin in earnest.