Handicapping potential outcomes in the Brexit saga

The latest news out of the UK is that British Prime Minister Theresa May has decided to postpone a Parliamentary vote on the deal she negotiated with the EU over the terms governing Britain's departure from the EU. Had the vote gone ahead, she would have lost… badly. So instead, she is looking to delay that vote until she can get a fix on the Irish border question that threatens to keep the UK in an indefinite legal limbo under the deal she negotiated.

The British pound sterling is down to 18 month lows on the back of this news. And UK GDP figures were released today, showing anemic growth as Brexit looms. There is a lot riding on this outcome, economically and politically. And since there are so many moving parts to this, let me handicap a few scenarios we should be thinking about.

The variables in Brexit

The UK is attempting to undo a 45-year EU membership status in a two-year time frame. That would be a tall order for any negotiating team. But, with Brexit, come a lot of other variables which make it difficult.  Here's a partial list below:

  1. The deadlines of 21 Jan 2019 for the UK Parliament to have a say on the Brexit deal and 29 Mar 2019 when Brexit will occur 

  2. The widespread fear of crashing out of the EU on 29 Mar 2019 without a deal

  3. The lack of obvious ways to deal with the border between Northern Ireland and the Republic of Ireland in a world in which Northern Ireland is not inside the EU

  4. Theresa May's dependence on the DUP of Northern Ireland to achieve an absolute majority in the UK Parliament

  5. The uncertainty on whether 48 Conservative Party MPs would be willing to submit letters to Altrincham and Sale West MP Graham Brady, the 1922 Committee Chair, to start a Tory Party leadership contest

  6. The lack of obvious alternatives to Theresa May as Conservative Party leader

  7. Conservative Party fear of a general election which would allow Labour Party leader Jeremy Corbyn to become Prime Minister 

  8. The widespread desire to avoid any kind of second referendum around the Brexit question, no matter which questions are asked, due to the perceived anti-democratic nature of such a vote

  9. Conservative Party division on whether a no-deal Brexit is a viable, non-catastrophic alternative to a deal

  10. The lack of a clear majority in UK opinion polling concerning most of the major issues surrounding Brexit

I could make an even larger list of variables complicating this decision. But the ten above are enough to make the situation in the UK unpredictable. So, it is extremely difficult to say with any degree of certainty what will happen next.

The key here is that uncertainty surrounding the viability of different outcomes is driving the entire process now. Everything is couched in terms of fears about economically catastrophic outcomes or anti-democratic political maneuvers.

Reducing complexity

This is toxic, of course. And I believe most career politicians fear complexity, particularly when that complexity means that potentially catastrophic outcomes are not relegated to outlier scenarios. And so, I believe the UK will eventually be forced to try and delay Brexit or revoke Article 50 altogether, if May cannot pull a rabbit out of a hat in the next round of Irish border negotiations with the EU. The goal will be simply to stop the clock ticking to eliminate catastrophic outcomes and reduce complexity.

As I was writing this post, Theresa May confirmed that she will indeed delay a Brexit vote in Parliament in order to get a better deal on the Irish border issue from the EU. I doubt that she can do. For one, there's Irish Prime Minister Leo Varadkar's point. While he doesn't speak for the EU, his opinion matters here. And he has said today that it is simply not possible to renegotiate the Irish border backstop proposal without "opening up all aspects" of the Brexit agreement. With the clock ticking, I don't believe there is enough time to get anything done there.

And so, I believe Theresa May will come up empty-handed after delaying the vote. This will undermine her standing as party leader and could lead to a leadership challenge, if a more obvious 'caretaker' PM emerges in the next couple of weeks.

That PM candidate would campaign under the premise that “we don’t want to crash out with no deal. And we need more time to get our ducks in a row. We can’t let the EU blackmail us into Theresa May's bad deal by using the ticking clock. I will save us from that". A new Conservative Party leader campaigning under the guise of moving to a(n antidemocratic) second referendum or of crashing out of the EU would not get enough support to be able to win an election contest in my view. That would not reduce uncertainty or complexity. It would increase the potential for politically and economically disastrous outcomes.

My view of likely outcomes

I think Theresa May's days are numbered. The only reason she remains in power now is that there are no obvious successors. And fear of Corbyn is too great to take a risk on changing leader while the Brexit process is ongoing. This calculus changes considerably if Brexit can be delayed or Article 50 revoked unilaterally, as the European Court of Justice confirmed is possible today.

From a purely political perspective, this makes delaying Brexit past 29 Mar 2019 the obvious priority for the majority of MPs within the Conservative Party who are not committed to a no-deal Brexit. And if that delay cannot be achieved, due to EU recalcitrance, Parliament will be forced to consider revoking Article 50 altogether, simply to stop the clock ticking.

Theresa May may not survive until then, of course. But, as soon as either of these two outcomes occurs, Theresa May's utility will cease to exist. And the Conservative Party will find a new leader it can sell to the electorate as someone capable of negotiating  a better Brexit.

The issue of a second referendum will continue to loom in the background as this occurs.

Politics don't get more complicated than this.