Britain Gets a Second Brexit Referendum (by Proxy)

(Bloomberg Opinion) -- Britons may not get a second referendum on European Union membership, but tonight’s vote of confidence in Prime Minister Theresa May among Conservative lawmakers is a proxy for it: The elected representatives of a party whose supporters chose overwhelmingly to leave the EU will fight over which vision of Brexit makes more sense.

Nearly all want to honor the result of the 2016 referendum; they just disagree over how to do that. Hardline Brexiters such as Jacob Rees-Mogg, who has been calling for May’s resignation for some time, argue that the deal struck with Brussels is so bad that Britain is better off leaving without it. More centrist Tories don’t like the deal and have been angered by May’s ham-fisted tactics, but they are opposed both to a no-deal exit — which they rightly fear would bring serious economic damage — and to a second referendum, which they fear would be undemocratic and divisive. 

This way, Conservative supporters of both kinds of Brexit get to battle it out. Bar a vote on May’s deal itself, which the prime minister pulled on Tuesday when it became clear she would lose by a large margin, this is the most significant decision lawmakers will make since the 2016 referendum. Should May lose, a no-deal exit becomes more likely than it is now. Not only is it the default position — if Britain does nothing at all, it will leave on March 29, 2019 — but it will be the preferred outcome of the group that deposed her.

Changing leaders might increase the chances of leaving without a deal, but it would not substantially change the options on the table. As in the 2016 referendum campaign, the push to promote a no-deal exit has featured a number of misstatements.

First, there is the idea that a no-deal Brexit would save Britain the 39 billion-pound ($49 billion) divorce payment. That bill is to settle outstanding obligations arising from Britain’s membership, including things like pension obligations. To argue the U.K. is paying this money and gets nothing in return is disingenuous. There is no chance that the measures the hardliners seek to mitigate the dislocation of a no-deal Brexit will happen without the U.K. agreeing to pay its obligations.

The other canard is the idea that the U.K. can leave on World Trade Organization terms and still get a Canada-style free trade agreement with the EU. The bloc will happily negotiate a free-trade agreement with the U.K., but it won’t do so until the myriad issues of the withdrawal agreement — from the Irish border to the status of EU citizens — are resolved. The trade talks will take many years.

Finally, hardline Brexiters claim that the Irish border problem is an EU negotiating trap that May fell headlong into. They argue that solving the problem merely requires some ingenuity in deploying technology to keep the border open. Good luck with that. As a much misquoted U.K. customs official noted in parliamentary testimony in November, “I’m not aware of any customs border in the world today that has found the technology that operates completely in that way.”

Changing leader still won’t address the problem that David Cameron’s 2016 referendum was intended to solve — the ungovernability of the Tory Party itself. It may leave it more divided. Conservative lawmaker Anna Soubry, a remain supporter now pushing for a second referendum, underscored that in an appearance at the Institute for Government on Wednesday morning. What if May loses and a hardline Brexiter, such as Boris Johnson, takes over? “God help us if it’s Boris Johnson. I’m out of the party at that moment.”

A loss for May would also put further power in the Democratic Unionist Party, the small Northern Irish party on which the Conservatives rely for their parliamentary majority. The DUP would likely threaten to withdraw support if the Tories picked a leader who supported the Irish backstop — the EU’s precondition for agreeing to anything.

The vote tonight is a vote, effectively, between some version of orderly exit — May’s deal or something like it — and a disorderly, no-deal exit. Conservative voters, over 60 percent of whom voted to leave the EU, are well-represented on both sides. If May wins, it’s by no means the end of her troubles: Her government could still face a vote of confidence and her deal is still widely hated in Parliament. But her hand will be strengthened and the hardline Conservatives who want to leave without a deal left mute for now.

This proxy referendum still won’t solve the wider problem facing lawmakers: Once the Tories resolve their leadership battle, Parliament will still have to find agreement. If MPs can’t, either they allow Britain to leave without a deal, or they hold a real referendum.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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