Don't be fooled — the biggest Brexit battle starts now

Lianna Brinded
Head of Finance, Yahoo Finance UK
Photo: Reuters

The world has been watching with bated breath over any semblance of a breakthrough on Brexit talks. And on Tuesday (13 November), the biggest development was made — an actual draft text was agreed upon between UK prime minister Theresa May and her counterparts in the European Union.

With the fears of a no-deal Brexit growing increasingly likely — the worst scenario for the global economy, not just for the UK — everyone has been eager to see what kind of deal was possible. After all, the delicate conundrum over what to do with the Irish border, how to appease strident Brexiteers that want to stop the freedom of movement of people (the biggest reason for voting for leaving the bloc), while also making sure that Britain’s economy doesn’t fall off a cliff by killing off the capability of the meaty financial services sector, seemed almost impossible.

And because negotiations have almost been farcical since Britain decided to leave the EU in June 2016, everyone has been desperate to see any kind of progress and therefore could be fooled into thinking the hardest part is over. The battle has only just begun.

Battle lines drawn

Photo: Reuters

Last night, ministers tumbled into Downing Street for one-to-one talks with May on the draft agreement. But today is the big showdown — a special cabinet meeting will be held at 2pm local time as the prime minister tries to rally support over her deal.

We don’t know what it is yet but after an intensive week of talks, various media outlets, including the BBC, Irish state broadcaster RTÉ, as well Bloomberg, have said that the document has been agreed at a technical level.

Meanwhile, the EU said it would “take stock” over developments while the Irish government said negotiations were “ongoing and have not concluded.”

But although this is progress, the biggest hurdle is getting any kind of deal through parliament. This has always been the case. And the problem is, which has been the driving factor behind the wearisome in-fighting within May’s Conservative party as well as from all other political factions, is there is absolutely no way in pleasing a majority of the lawmakers that will decide on the fate of the deal.

Leader of the opposition Labour, Jeremy Corbyn, released a letter last night, posting on Twitter that “Parliament is sovereign and must have a truly meaningful vote on any Brexit agreement. We demand that Parliament is able to amend and propose alternatives to whatever deal the Government brings forward.”

But a no-deal is not acceptable either. Earlier this week, shadow Brexit secretary Sir Keir Starmer said that parliament will not allow the UK to leave the EU without a deal and if 400 or so MPs were opposed to a no-deal Brexit, it would be able to force May and her team to come to an agreement with the bloc.

READ MORE: How a group of Northern Irish politicians holds the potential key to a Brexit deal

Within May’s own Conservative party, the staunchest Brexiteers are seriously unhappy. Jacob Rees-Mogg warned of the UK becoming a “vassal state” with Northern Ireland “being ruled from Dublin” over the agreement over an Irish backstop.

Meanwhile former foreign secretary Boris Johnson said the plan would see the UK remain in the customs union and “large parts” of the single market which was, as he said, was “utterly unacceptable to anyone who believes in democracy.” Strident Brexiteers believe that any toe in the EU’s waters doesn’t resemble an actual Brexit.

It’s vital listening to what Northern Ireland’s Democratic Unionist Party has to say because that group of MPs are essential to giving the votes needed to push through anything May proposes (because her party has a very small majority). Unfortunately, it doesn’t look good — the DUP has said that it would be a “very, very hard sell.”

Even pro-EU Conservative politicians are not won over. MP Justine Greening said: “Even if some people in my party can’t see this is a bad deal, everyone else around this entire planet can.”

A second Brexit referendum?

Photo: Reuters

While May has to battle with parliament to push through a deal, there is growing momentum around having a second Brexit referendum — dubbed a “People’s Vote.” Just last month, more than 500,000 people marched in London to protest against Brexit.

While the UK prime minister has previously said that there wouldn’t be a second vote on leaving the EU, prominent politicians across the continent have lent credence to the idea.

Former prime minister Gordon Brown said Britain should leave the door open to rejoining the EU: “I believe a referendum will happen as people come to the conclusion that since 2016 the situation has changed and at some point they will want to have the final say,” said Brown in a speech this week.

Prime minister of Spain Pedro Sanchez became the most senior European politician to advocate a second Brexit referendum as well this month, saying that Brexit is a sign of “self-absorption.” He added: “If I was Theresa May, I would call a second referendum — no doubt.”

And speaking to Yahoo Finance UK, the leader of the Liberal Democrats, Vince Cable, told the European Commission that it should prepare for Brexit being called off. 

“Certainly, the UK mood has changed,” he said. “A ‘people’s vote’ is now a serious option. The Commission needs to do serious contingency planning in the event that we do go down that route in the UK.”

READ MORE: ‘Unholy alliance’ of MPs tell Barnier to prepare for UK to remain in the EU

According to a poll on 29 October by respected pollsters Ipsos Mori, the people overwhelming said that they are not confident May would secure a good deal for Britain.

Graphic: Ipsos Mori

Furthermore, even Conservative voters aren’t confident in May’s ability to secure a good deal.

Graphic: Ipos Mori

Is another general election on the cards?

May is seemingly hanging on by a thread.

When former prime minister David Cameron stepped down and May took over the premiership in July 2016, she has had to battle her own cabinet since then. Her lack ability to unify the party as well as drum up greater support was even more evident when she called a snap general election in 2017.

The result meant she haemorrhaged the ruling Conservative party’s majority, creating a hung parliament and forcing the Tories to make a deal with the DUP to gain enough seats to create a confidence-and-supply agreement — something essential to give May’s cabinet enough support to push items through parliament.

Overnight, former Conservative party leader Iain Duncan Smith suggested May’s administration could collapse over the deal. He said “if the Cabinet agrees it, the party certainly won’t.” He added that “almost certainly, yes” when asked if the government’s days were numbered.

For months, there have been rumblings of a second general election and now it’s looking increasingly likely. While May has ruled it out, her hand maybe forced.

That Ipsos Mori poll on 29 October claims that Britons would vote for the current ruling Conservative party if it there was a general election tomorrow — but only by a smidgeon. Really, it could go either way between the Tories and Labour considering, as stipulated before, Labour made big gains in the polls while Tories lost seats.

Chart: Ipsos Mori

But that doesn’t mean May, or Corbyn, can rest easy. Pretty much everyone is dissatisfied with them doing their jobs as leaders of their parties:

Graphic: Ipsos Mori