How can the Brexit stalemate be broken?

It was obvious from the morning of 9 June 2017, when Theresa May woke up to find the electorate had stripped her of her majority, that crafting a Brexit that could win support in parliament as well as in Brussels would be a formidable challenge.

Since then, the prime minister has been masterful in postponing the inevitable moment of reckoning within her party – but the row about how closely Britain should cleave to the EU after March 2019 is now being fought in Westminster.

Since the Chequers agreement shifted the government’s position significantly in a soft Brexit direction, it has been the Eurosceptic hardliners who have been most angry.

But after the government decided to accept a series of amendments tabled by the European Research Group (ERG), led by Jacob Rees-Mogg, on Monday, it was Tory remainers who were enraged. They acted out their anger on Tuesday by defying dire threats from whips and backing an amendment aimed at keeping the UK in a customs union – but May scraped home, with the help of Labour Brexiters.

A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.

Customs are not the only checks that count – imports are also scrutinised for conformity with trading standards regulations and security and immigration purposes – but they do play an important role in determining how much friction there is at the border. A strict customs regime at Dover or between Northern Ireland and the Republic of Ireland would lead to delays that will be costly for business and disruptive for travellers. Just-in-time supply chains in industries such as car making could suffer. An Irish peace process built around the principle of entirely unfettered travel between north and south could be jeopardised.

After a brace of tight votes, two key pieces of Brexit legislation – the customs and trade bills – have moved on up to the House of Lords, but May looks increasingly boxed in by rebels on both sides of her riven party.

So how can the deadlock be broken? The first and perhaps still the most probable possibility for May is the approach Winston Churchill called KBO (“keep buggering on”).

Discussions in Brussels will continue over the summer, key leavers including Michael Gove and Andrea Leadsom are still onside, and some analysts believe it would do no harm for May to have to abandon aspects of the Chequers deal that the EU27 would always be likely to reject – including the complex “facilitated customs arrangement”.

According to Anand Menon, the director of the thinktank UK in a Changing Europe, the ERG has “scuppered a plan that could never have worked: calm down everyone”.

He describes the Chequers agreement as a “holding position”, adding: “They thought Brussels would kill it, which is difficult. Jacob Rees-Mogg has killed it instead.”

Menon argues that there is no third way between a Norway-style close relationship and a much looser deal, as David Davis and Boris Johnson advocate.

Paradoxically, the article 50 deadline of March next year could also strengthen May’s hand. A good proportion of MPs in her party – though not many of the ERG – and Labour are convinced that leaving the EU with no deal would be a disaster. So as time runs out, it will become less and less practical for MPs to try to send May back to the drawing board.

The deadline also makes it less tempting for the hardliners to throw May overboard, by firing off 48 letters to Sir Graham Brady, the chairman of the 1922 committee, and trigger a vote of no confidence in an attempt to replace her.

Rather than blow the summer on a leadership contest, the ERG are expected to keep up the pressure for their preferred Canada-style trade deal, using every PR tactic available.

“Key to all of this is the ticking clock caused by article 50,” says Philip Cowley, a professor of politics at Queen Mary University of London. “Without this, she’s finished now. With it, she can play a game of chicken with the other parties and some of her MPs.”

If May survives that long, the real moment of reckoning will come when she and her new Brexit secretary, Dominic Raab, come back to the Commons with whatever deal they have been able to strike in October, or as now seems increasingly likely, December.

It is still possible that enough Labour MPs are alarmed about a no-deal scenario, or wary of appearing to “block Brexit”, that they could offset the ERG sceptics and allow it to pass – though whether either party would hold together in that eventuality is a moot point.

If parliament failed to back the deal, May would find herself in an unprecedented constitutional bind. As the former cabinet minister Justine Greening’s intervention this week illustrated, the prime minister would then face mounting pressure to resolve the impasse by throwing the decision back to the public.

A referendum would take time to trigger, probably necessitating an extension of article 50, which would require the approval of every one of the EU27. It may also be no less divisive than the 2016 referendum that smashed up a decades-long political consensus.

Another option – albeit a desperate one – to break the stalemate would be to call a general election. That is more difficult than it was before the Fixed-term Parliaments Act but, as 2017 showed, by no means impossible. And Labour would jump at the chance.

Cowley says: “Labour has a four- or five-point lead in some polls. That’s as nothing compared to what I think you’d see if we had a general election fought with the Conservative party in the state they’re in at the moment, because they would just fall in on themselves.”

Rather than resolve the complex challenge of Brexit by delivering a decisive majority for one of the two main parties, though, a general election may just underline how polarised the country has become since the summer of 2016.

“What you’re seeing is a Conservative electorate that’s used to jumping ship when they don’t get what they want,” says Matthew Goodwin, a professor of politics at the University of Kent. He adds that 70% of leave voters have either voted for Ukip in a local, European or national election, or have considered doing so. “British politics is not just volatile, it’s far more fluid than it used to be,” says Goodwin.