Brexit Isn't the Conservatives' Biggest Problem

(Bloomberg Opinion) -- Britain's governing Conservative Party is so split over Prime Minister Theresa May's proposals for the U.K.'s future relationship with the European Union that a coup is supposedly imminent. It's merely a matter of when hardline Brexiters gather the numbers to challenge her in a vote of confidence.

Only one small detail is stopping them: They can't agree on what should follow after that. Some hardliners want the mother of all free trade agreements, but fear the economic disruption that would be caused by leaving the EU with no deal at all. They would pull their punches if it was a choice between May's deal and no deal. For another kind of Brexiter, leaving the EU with no messy entanglements is the prize and they aren't terribly bothered by the cost.

Two attempts this week to unite behind an alternative Brexit plan showed the extent of the divisions among hardline Brexiters – but also their desire to find common ground against the government. It also speaks to deeper problem than just Europe.

Disagreement between Brexiters led to the decision this week to shelve a reported 140-page blueprint for Brexit from the European Research Group, a caucus of pro-Brexit MPs. But another proposal, however, did get aired: the ERG's plan for solving the question of the Irish border.

The paper got considerable media attention because the issue is the main, though not the only, obstacle to reaching a withdrawal agreement setting out the terms of the divorce and the framework for the future trade relationship. The EU insists that the U.K. provide a guaranteed “backstop” to keep the border between EU-member Ireland and the U.K.'s Northern Ireland invisible after Brexit if no other solution is found.

The ERG takes the view that Irish question has been blown out of proportion. It proposes a combination of off-the-shelf solutions, including mutual recognition of standards for food and agriculture, “trusted trader” schemes, and some checks away from the border. It argues that the “repetitive” nature of most cross-border trade means that the necessary checks can take place away from the border with the help of technology and roaming inspectors.

The main appeal to hardline Brexiters is that it would let them pursue a free-trade agreement with the EU without all the entanglements and obligations of May's proposals. It quickly got the backing of the Democratic Unionist Party, the small Northern Irish Party propping up May's government.

Still, it's doubtful the EU would find the ERG proposal workable. It has been over these sorts of fixes already and found them wanting. It has no such equivalency arrangements with other third countries. However contained or repetitive the current nature of cross-border trade, it can certainly change with the incentives, so the EU will be wary of anything that leaves insufficient controls.

May will no doubt be relieved that the ERG managed only to find a common denominator on one issue and, even then, the proposals won't immediately change anything – she has already committed, including in her March letter to European Council President Donald Tusk, to the Irish backstop. And yet the bigger problem, for May and her successors, is that the struggle within the party isn’t just a battle over competing visions of Europe. It's a more fundamental one about what conservatism means.

One kind of conservatism prizes economic freedom and opportunity; the other is more deeply attached to social structures, institutions and sovereignty and resistant to change. As former May adviser Nick Timothy has written, this debate has been around since, at least, when the party divided over the repeal of the protectionist Corn Laws in 1846.

One might say that the party is so good at winning elections that it can keep these divisions contained in the name of holding on to power. Perhaps so – certainly it helps that Conservatives have a divided and hapless opposition in the Labour Party. But Brexit appears to have deepened the long-standing divisions between different kinds of conservatives and that will have at least two impacts.  

First, it increases the uncertainty element during the negotiations. A part of the parliamentary party now sees the prime minister as a bigger threat than the EU club it campaigned to leave. If May stumbles at the coming Salzburg EU summit or at her party conference at the end of the month, hardline Brexiters are slowly building agreement on how they can unseat her. If, somehow, she manages to get a deal, they will urge lawmakers to reject it. If it gets through parliament, they will seek to influence and frustrate the trade talks that follow and replace her. And so on until they can change the party leadership.

Second, ideological divisions will continue after the main Brexit questions are decided and after May has left the stage. They will impact questions of taxation, labor market regulation, immigration and other critical issues. If Britain is to recover its growth and confidence post-Brexit it needs a government with a clear vision of how to proceed.

Both May, and her predecessor David Cameron, tried for a time to widen the tent of conservatism, and both got considerable pushback from the base. And yet it's hard to imagine the Conservatives regaining a parliamentary majority without that broader appeal. Hardline Brexiters can unite only on opposing May's leadership and Europe. May's former policy adviser George Freeman called today for her to step down after a Brexit deal to allow “a new generation leader to take this forward.” He didn't say forward to what.

For now, the Brexiters' divisions help May; it makes it more difficult for them to get the numbers to unseat her in a confidence vote. It may also, ironically, make the EU a little more willing to concede ground since a deal negotiated with May would be better than the chaos of a leadership challenge or the cost of no deal. But the ERG's proposal for the Irish border, however flawed, shows a growing determination to unseat the Tory leader and worry later about what happens next.

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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