Stuck In the Middle: These Are Theresa May's Four Brexit Options

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(Bloomberg) -- Prime Minister Theresa May is stuck. Her inner Brexit Cabinet has rejected her proposed customs relationship with the European Union. But the alternative would crash into the long-running Irish border issue. She has options -- see below -- but none of them are very good.

1. Delay

May’s survival strategy as leader of a party that simply can’t agree what it wants has been to keep putting decisions off. The options that the Brexit Cabinet was discussing this week -- the “New Customs Partnership” and the “Maximum Facilitation Model” -- were published in a government paper nine months ago. The problems that ministers highlighted Wednesday have been well-known for all of that time. So the “urgent” work that officials have been sent to do is unlikely to generate sudden solutions. What it might do is produce something sufficiently vague that ministers can agree to support it.

The problem with this strategy is that what May was once able to describe as careful deliberation -- “I actually look at the evidence, take the advice, consider it properly and then come to a decision” -- is now seen by both Parliament and the EU as avoiding the issues. The EU has already been rude about both the British options. The anti-EU European Research Group has sent May a 30-page dossier attacking the New Customs Partnership with a veiled threat that it could bring her down.

So even if the Cabinet can agree on another kind of fudge, it doesn’t look like a long-term solution. One of the things May has been putting off in order to avoid a fight is Brexit-related legislation. At some point that will have to come back to Parliament, and there are amendments tabled by pro-EU Tory rebels aimed at keeping Britain in a customs union. If Parliament thinks May has no solution, it might just take the matter out of her hands.

2. Call another election

An easy option to laugh at given how badly it went for May last time she tried this. However, one way for a prime minister to get past a divided Parliament is to take it to voters. But even if Conservative lawmakers were inclined to let May lead them into another election (they’re not), the Conservatives would need to have agreed among themselves what they were asking the country to vote for. And even if they could (they can’t), there’s a distinct possibility that voters might feel that a Tory Party calling an election for the third time in four years might really be asking to be put out of its misery. Those around Labour leader Jeremy Corbyn see this as their likeliest route into government.

3. Go for a customs union

This has the huge advantage that the EU would definitely agree to it. Parliament probably would too, even though May’s chief of staff Gavin Barwell has told ministers he is working on the basis that Labour will vote against whatever May decides. Both the Labour leadership and its lawmakers support a customs union, so the vote is winnable. Many Conservatives would too, especially if it were government policy. It would also solve most of the Irish problem. The difficulty is that May has repeatedly and firmly ruled a customs union out. To go for one would be to find out whether Jacob Rees-Mogg’s ERG is serious about its threats to bring her down. It would also risk Cabinet walk-outs. May is a prime minister so weak that it seems almost anything could bring her down. Could she survive this?

4. Go for “no deal”

Make the “maximum facilitation” proposal to the EU. Announce loudly that there is no Irish problem. If they reject it, say there’s no prospect of an agreement, and walk away from the table. This would satisfy the ERG, but would anyone else buy it? In particular, would May be able to win a confidence vote in Parliament? She has no majority, and it would take only a handful of Conservatives on her side to rebel for her to lose the vote, leading to a change of course or another election. Are there seven Tories who would do that? Probably. That gets you to an election that Corbyn could win.

©2018 Bloomberg L.P.

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