Trade

How Theresa May could stumble off the Brexit cliff

LONDON — This is how Brexit could end — not with a great leap from the cliff top but a slow-motion stumble.

For some, Monday, July 16 will go down as the day the U.K. government finally began to lose its footing. Others will point to different moments — the publication of the Chequers white paper or the decision to accept the Irish backstop in December, perhaps. Maybe even Theresa Mays fateful call to hold a snap general election or her refusal to accept anything had changed after she lost her majority.

There are serious people, not prone to hyperbole, who believe the shenanigans in the U.K. parliament Monday have gone some way to killing off the prime ministers chances of agreeing to a Brexit deal. Hemmed in by both sides of her party, it will take a crisis to change the numbers. The air is closing in around May, and the space for a deal that all sides of the Conservative party and the EU27 can agree to is shrinking.

May accepted four amendments to a crucial piece of Brexit legislation, all of which were designed to undermine her own Brexit policy, sparking uproar from pro-European Tories. The government believes the amendments are not as damaging as they seem, but that doesnt change their purpose.

One commits the U.K. to leaving the EUs VAT area after Brexit. Some experts say this all but guarantees a hard border in Ireland, undermining the whole purpose of Mays compromise Chequers plan. Charles Grant, the director of the Center for European Reform, said: “Unless we stay in EUs VAT area, we cannot avoid a hard border.”

By siding with Brexiteers instead of Tory Remainers, May avoided a Euroskeptic rebellion, but united the pro-European wing of her party with Labour.

For their part, the EU will not sign any withdrawal agreement that does not guarantee an open border in Ireland. No withdrawal treaty means no deal, which means no Brexit transition period and the U.K. crashing out of the European Union in March 2019.

The second, linked, problem for the government is the second amendment passed Monday night would make it illegal for the government to agree to a special customs status for Northern Ireland after Brexit. This directly undermines the proposed “backstop” clause, which is the last major area of disagreement holding up the withdrawal agreement.

The EU has made clear — repeatedly — this backstop clause must be “Northern Ireland specific” — its their insurance policy that whatever else is agreed, Britains exit wont impose a hard border on the island of Ireland. Monday night makes that circle harder to square.

The third amendment ensures any future customs arrangement with the EU must be “reciprocal” and cannot just involve the U.K. collecting the EUs tariffs, which appeared to be the central idea of the prime ministers compromise customs plan for Britains future relationship with Brussels.

Brexiteers believe the amendment kills off the prime ministers plan, which they hate, which in turn means the backstop becomes more important to the EU because it might actually be needed. No. 10 denies this, but that was the Brexiteers purpose.

Eventually, the amendments passed by three votes, but only because of the extraordinary complacency of a disunited opposition.

The fourth amendment stops the whole of the U.K. joining a customs union with the EU without an act of parliament. This appears to undermine the prime ministers negotiating position because the current plan is for the U.K. to remain tied into the EUs common external tariff as an interim step on the way to the future relationship.

By siding with Brexiteers instead of Tory Remainers, May avoided a Euroskeptic rebellion, but united the pro-European wing of her party with Labour. One minister was clear about the tight spot the government is now in: “I dont have any insight, other than its a big f***ing problem.”

Eventually, the amendments passed by three votes, but only because of the extraordinary complacency of a disunited opposition, allowing Brexiteers a victory for which they never really had the numbers.

Lib Dem leader Vince Cable and his predecessor Tim Farron missed the votes, as did dozens more MPs who didnt turn up. In the end, all the government needed was four Euroskeptics from the Labour benches to switch sides, despite 14 pro-EU Tories voting against them.

Next time — perhaps even as soon as Tuesday evening in a vote for a customs union with the EU — the prime minister might not be so lucky.

This insight is from POLITICOs Brexit Files newsletter, a daily afternoon digest of the best coverage and analysis of Britains decision to leave the EU available to Brexit Pro subscribers. Sign up here.

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