A considered view of real estate, investments and beyond

The Brexit that could bypass us all The economy will roll on

Political Insider

The most common question I am asked as a political consultant is “How is all this going to play out?” Any answer can of course be dismissed as pure conjecture and no prediction will turn out to be 100 per cent correct. But by talking to people in the Government, in Number Ten, in Westminster and in Brussels, you can get a sense of what is likely to happen.

Let us start with the question of the UK Prime Minister’s survival.  The Prime Minister says she is in it for the long term, but in truth she is there only until the UK has formally left the EU at the end of March 2019.  While there is a general perception among Conservative MPs that she is not cut out to be Prime Minister, she remains trusted as a colleague who wants to keep the party together and who will continue to work hard as long as she remains in the job.  At any point, it is possible that 1922 Committee Chairman Graham Brady might find 48 letters on his desk demanding a Conservative Party leadership contest. The most likely trigger for her departure would be rejection by her own backbenchers for an EU exit deal negotiated by Mrs May.

The position reached by the Cabinet at Chequers may be unpopular on almost all benches of the House of Commons but reports of its death have been greatly exaggerated. A deal along the lines of Chequers is one that that Brussels will sign up to; if the deal hadn’t been pre-approved by Brussels on a nod and a wink, the Cabinet would not have proposed it in the first place. While the choreography dictates that EU leaders must not look nor sound happy about the contents of Chequers, they are privately cock-a-hoop that the British Cabinet has been so compromising.  Mrs May does not need to sell Chequers to Brussels since it was Brussels officials who sold it to her chief negotiator Olly Robbins. She merely has to fly around Europe looking like she is doing a good job at selling it. Michel Barnier knows that, by saying he does not like Chequers, he is helping Mrs May look like a winner when he does sign up to a Chequers-style deal. But the deal is privately pretty much done.

Where Mrs May is going to continue to struggle is in selling Chequers to her own party.  Chequers is not what people who voted for Brexit thought they were voting for: they thought they were voting for a restoration of Parliamentary sovereignty.  Instead, the Common Rulebook for goods envisaged by Chequers ensures that the UK must follow the rules made by Brussels without being a member of the EU councils which formulate and vote upon them. Conservative Party members understand this (Mr Rees Mogg has made sure they do), which is why they believe Mrs May has betrayed them. They not only see her as an election loser, but now an appeaser too.

Her Brexiteer backbenchers have, for good practical reasons, been less excitable than party members about the “betrayal”.  They know that there is no Commons majority for no deal.  They will only get a no deal Brexit by default, if the Chequers- style deal that will be done with the EU this year is rejected by the Commons. What is more likely to happen in those circumstances is that Mrs May returns to the negotiating table and agrees a more limited deal which commits the UK to handing over the money in exchange for a stable transitional period and an agreement in principle to look at a Canada-style deal, without any firm commitment on the EU’s part to guarantee tariff-free trade beyond December 2020.

While the arrangements for the transitional period will remain in place under almost every scenario imaginable, the Conservative backbench Brexiteers are reluctant to strike early. They already fear that Boris Johnson does not have sufficient support in the Parliamentary Party to take on the leadership and command a majority in the Commons without holding a fresh General Election.  Getting Brexit to formally happen on 29 March 2019 matters more to them at this point than changing their Leader.  Many Brexiteers will hold their noses and vote for a Chequers-style deal just to get Brexit formally done next year, hoping that a new Leader will win a mandate from the country to unpick it and demand a new trading relationship once we are out.

Our Partners