May Is Hatching Secret Plan B to Avoid No-Deal Chaos
Theresa May, U.K. prime minister and leader of the Conservative Party, gestures while speaking at a general-election campaign event in Slough, U.K. (Photographer: Gerry Penny/Pool via Bloomberg)

May Is Hatching Secret Plan B to Avoid No-Deal Chaos

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As cars lined up in the rain outside London’s Lancaster House, the diplomats gathered within sipped wine and sought intelligence on where Brexit is headed at the Foreign Office Christmas party.

Theresa May’s senior team are wrestling with the same question: What should she do if her deal is thrown out? In private, the options on the table are dramatic and include postponing the divorce from the European Union, calling another referendum or even announcing fresh national elections.

May Is Hatching Secret Plan B to Avoid No-Deal Chaos

In under 100 days, the U.K. is due to leave the EU, fulfilling the mandate of the 2016 referendum and marking the culmination of two years of negotiations between London and Brussels. There is one massive obstacle standing in the prime minister’s path: Parliament won’t go along with the terms she’s agreed.

May is trying everything she can to win support among increasingly suspicious lawmakers for the unpopular divorce settlement she’s negotiated. She was forced to pull out of a vote on it on Dec. 11 and has now rescheduled the ballot for the week of Jan. 14.

In public, May and all her ministers are adamant that her exit deal is the only one available to avoid potential economic and social chaos. They are putting all their efforts into winning the vote in Parliament.

Behind closed doors, her inner circle is discussing the options if she fails.

Increasingly, the idea of sending the question back to the British public to answer is gaining ground, according to a senior government official.

That could be through a new referendum -- an idea winning support in mainstream U.K. politics but which May herself adamantly rejects -- or even a national election to choose a new government.

The first step in either case would be to delay Brexit, extending the Article 50 process while all sides regroup. When she’s been asked about this recently, May has been less forthright than in the past.

“I don’t think it’s right to be seeking that extension of Article 50,” she said on Monday. “What Parliament will be faced with is a decision to exercise its responsibility to deliver the referendum result, to deliver Brexit.”

Reading between the lines of what May says is key to trying to understand the latest thinking of a prime minister who’s U-turned in the past to get out of a political bind. May’s most recent comment doesn’t rule out a change of heart.

First, there is the idea that while now might not be the time to seek an extension, it could be necessary later. Secondly, she implies that if Parliament fails to deliver Brexit by backing the deal, someone else -- perhaps the British electorate -- could be asked to decide.

May’s officials have sought to play down reports in recent days that there could be another referendum. Her office has made public that she will not countenance a rerun of the 2016 vote for as long as she’s in power. But people familiar with the matter are clear that May herself might not be in a position to decide.

They know that if her deal is ultimately voted down, the campaign for a second referendum will gain momentum. One way of stopping that would be to trigger an election. That’s a threat some in May’s government are using to try to persuade the small party propping up her minority administration to come back on board.

Woo Northern Ireland

Northern Ireland’s Democratic Unionist Party won’t want an election, in part because it brings closer the threat of a Labour government led by Jeremy Corbyn.

But the DUP is at the moment vowing to oppose the deal May has secured with the EU. Without the party’s support, May has no majority in the House of Commons. The DUP says it is ready to vote against May and bring down her government unless major changes can be made to the Brexit deal.

The premier and her ministers are mounting a charm offensive to woo the DUP, while May is engaged in a desperate attempt to persuade the EU to shift position on the most contentious part of the divorce package.

If the DUP come back on side, May’s team believes it’s possible that enough of her own Tories -- who have also pledged to vote against the deal -- will also sign up to give the accord a slim chance of surviving.

But there are formidable obstacles ahead for May.

The prime minister is weakened by a bloody month in which a succession of ministers quit her government in protest at the terms of her deal, and she faced down a formal attempt to oust her as Tory leader. While the immediate threat to her position has receded, May’s closest advisers know she remains vulnerable.

If the Tories decide May must go, they will find a way to get rid of her.

One senior minister who dislikes May’s deal but reckons it’s the only chance to get Brexit done believes there is still hope, and that the imminent prospect of a no-deal Brexit will focus Tories’ minds when the vote in Parliament comes.

“The Conservative Party on Brexit puts me in mind of what what Winston Churchill said about the Americans,” the minister said. “You can always count on them to do the right thing -- after they have tried everything else."

©2018 Bloomberg L.P.

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