LEADING THE WAY OUT OF THE EU

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After promising a sovereign Brexit at Lancaster House in January 2017 Theresa May has conceded ground at every turn. Two years on, the Prime Minister finds herself virtually back at square one. The British public is now faced with a range of possibilities, only one of which honours the 2016 referendum result, No Deal. At the beginning of this year, May saw her dismal withdrawal agreement defeated by a historic margin of 230 in the House of Commons. In spite of the overwhelming rejection from Remainer and Leaver MPs alike, the deal – or at least an even softer version of it – remains a strong prospect.

But the clock is ticking. Britain will leave the European Union on March 29. The government will undoubtedly pick up support from some Labour MPs with each move it makes towards an even more dishonest Brexit, but at the cost of backing from Conservatives and Ulster Unionists, upon whom the government relies for its Commons majority. That 230 margin may prove impossible to fill. No Deal still looks like the least likely outcome, if not highly likely.

Labour and several Conservative MPs are agitating for a second referendum, which would require an extension of the soon to expire two-year negotiating period, but the smart money would be on the public delivering the same verdict as in 2016. Other plans for Parliament to turn the Commons Liaison Committee into a one-off Executive branch of the state to renegotiate with Brussels are even more fanciful.

To stay informed on what promises to be a rollercoaster few months, ensure to follow Leave.EU’s Twitter account and Brexit Brunch, our weekday morning updates.

LEAVE.EU INSIGHT AND ANALYSIS

THE RESISTANCE

Theresa May’s initial deal has been rejected. The largely pro-Remain opposition was never going to back it and more than 100 (1 in 3) Conservative MPs refused to do so for more commendable reasons. From the beginning, the DUP, which props up May’s minority government said they would vote it down. They despise it for treating Northern Ireland differently.

The settlement with Brussels is deeply flawed, but common frustration centres entirely around the Irish backstop. The emphasis in the overwhelmingly pro-Remain Parliament will be on formalising the backstop’s commitment to keeping Britain in the EU in all but name. Brussels will gladly formalise the backstop by placing it on a permanent footing. Even before the government’s defeat, Downing Street had begun talks with some Labour MPs to attract their support. Expect that dialogue to intensify, but don’t expect the deal to fair much better at the next time of asking.

NO DEAL VS NO BREXIT

If Parliament doesn’t approve the withdrawal package or any last-minute alternative – an EFTA-plus-Customs Union arrangement is being heavily pushed by an increasing number of MPs – Britain will once again become independent on 29 March as Article 50 expires. However, the fact remains, in spite of Theresa May’s “no deal is better than a bad deal” pledge, the prime minister and her cabinet have done the utmost to avoid restoring anything but a token amount of sovereignty.

This is unfortunate, Britain’s massive trade deficit with the EU is a major tactical advantage, yet in choosing to not properly invest in no deal preparations May has adopted the opposite tactic, stolen from the Osborne-Cameron playbook: make independence look unpalatable and whatever deal the establishment thrusts upon the electorate appear marginally better. Project Fear has returned. It didn’t work before, it will not work this time around either.

BACKSTOP BETRAYAL

The EU has weaponised the border separating Northern Ireland from the Republic, successfully leveraging an all-too-willing British establishment to Remain in the EU’s Customs Union, which bars the UK from an independent trade policy. If the prime minister’s deal somehow makes its way through Parliament, Britain will remain in the “backstop” until the EU agrees to an alternative border solution. The new customs system dividing the island’s two markets would have to be free of physical infrastructure.

The WTO says that doesn’t mean both zones need to be in the same customs union, but don’t bet on Brussels agreeing to whatever London proposes over the coming years and perhaps decades. Turkey joined the Customs Union in 1996 and is still languishing there.

Find out more here.

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