Brexit: There Is No Guarantee That Parliament Can Prevent No-Deal, but the Political Will Is There
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Dods Monitoring: no-deal Brexit Brexit: there is no guarantee that Parliament can prevent no-deal, but the political will is there This report examines what options are available for Parliament to prevent a no-deal Brexit and what the likelihood and possible outcomes for each scenario are. 10th July 2019 Dods Monitoring: no-deal Brexit Executive summary British politics has been through turbulent times since the 2016 referendum: Brexit has turned UK parliamentary democracy on its head. Three years on from the result that gave the Leave campaign a narrow victory, MPs have been unable to break the deadlock that has plunged the Government into paralysis – resulting in two extensions to Article 50 and two Prime Ministerial resignations. Both contenders to become the next Conservative Leader and Prime Minister have signalled they would be willing to put the option of ‘no-deal’ back on the negotiating table, and one is insisting he will take Britain out of the European Union on the 31st October exit date with or without a deal. The way forward for MPs seeking to prevent no-deal is not straightforward. There is no guaranteed way MPs can seek to prevent this form of exit, or even bind the Prime Minister to request an Arti- cle 50 extension if a deal is not reached before exit day. It remains the legal default that the UK will leave the EU on the 31st October unless a Withdrawal Agreement is ratified, and the means pur- sued in the run up to the last Article 50 deadline are unlikely to be available under a new Prime Minister. But Parliament is opposed to no-deal, with 312 voting against the Government in March to reject it under any circumstance. The new Prime Minister will lack a personal mandate for no-deal and will face a number of difficulties in the coming months creating significant political pressure to prevent the UK from crashing out. Under existing orders and parliamentary process, there is no one clear or guaranteed route availa- ble to MPs seeking to block no-deal. Any opportunity is likely to come about by chance, not design, and at the last minute, with some MPs wishing to give the new Prime Minister a chance to break the deadlock and wishing to exhaust all other options before turning against the Government. This report: • takes an in-depth look at the ways in which Parliament could seek to prevent a no-deal exit; • assesses the likelihood and possible outcomes of each scenario; and • provides recommendations for stakeholders and industry. 10th July 2019 Dods Monitoring: no-deal Brexit Definitions What ‘no-deal’ means in practice The UK’s new EU exit deadline under Article 50 of the Lisbon Treaty is 31st October 2019. If this deadline is reached and no formal agreement between the UK and EU has been ratified by Parlia- ment, and no extension of Article 50 has been requested and agreed by the EU 27, then the UK will leave the European Union on a ‘cliff edge’ exit at midnight on 31st October. It would mean an overnight change in the UK’s relationship with the EU. The UK would immediate- ly cease to be a member of the Customs Union and Single Market, losing access to a number of agreements and databases, and creating significant issues at the ports and borders. The UK would fall back on World Trade Organisation trade rules which state that under the princi- ple of non-discrimination no country can offer to trade with another on preferential terms, unless it is party to a free trade area of customs union or where there is special tariff treatment for devel- oping countries. This means that the UK would be forced to trade with the EU and third countries with higher tariffs. No GATT get-out clause There was some suggestion that the UK could exit under a no-deal but avoid any tariffs due to Arti- cle 24 of the General Agreement on Tariffs and Trade (GATT 24). This clause means countries can sign up to “interim arrangements” whilst plans for a free trade agreement or customs union are being discussed. The interim period can last up to 10 years, as long as there is a schedule for an end agreement being drawn up. These suggestions, however, were dismissed recently by the Governor of the Bank of England who was clear that GATT only applies to countries that are already working towards an agreement, so not in the event of a no-deal Brexit. Importantly, GATT 24 doesn’t apply to services either – which accounted for 40 percent of the UKs exports to the EU in 2017. 10th July 2019 Dods Monitoring: no-deal Brexit Key political influencers in and on Parliament The table below summarises the main influencers and groupings within Parliament: Anti-no-deal Pro-no-deal Pro-no-deal in some cir- cumstances Backbench MPs Backbench MPs The DUP The Speaker of the House of The Brexit Party Jeremy Hunt Commons The Opposition Boris Johnson Anti-no-deal parliamentarians Anti-no-deal parliamentarians are united in the belief that a no-deal Brexit would be deeply dam- aging to the UK’s economy and standing in the world and would plunge the UK into a recession and see a prolonged period of instability and uncertainty. Tariffs on imports, they argue, would be dam- aging for key sectors such as the motor industry, and British products would also no longer be au- thorised for sales in the EU. Politically, opponents to this version of Brexit argue that there is no mandate for it. People voted to leave the EU in the 2016 referendum, but they did not vote to exit on these ‘cliff edge’ terms and a fresh mandate would be needed for any Prime Minister seeking this option. Backbench MPs In normal times, backbench MPs only say over legislation and policy is their ability to cast a vote in favour or against Government proposals or occasionally introduce a Private Members Bill on the odd Friday. However, Brexit has transformed UK politics and backbench MPs have exerted signifi- cant influence over this process. The anti-no deal cross party group of backbenchers, led by Yvette Cooper, Nick Boles and Sir Oliver Letwin, managed to wrangle control off the Government earlier this year and pass legislation that effectively created a legal mechanism whereby Parliament could instruct the Prime Minister to seek an extension of Article 50. They also have their traditional power: votes. The failure to win over backbenchers was Theresa May’s downfall as they consistently voted against her Withdrawal Agreement. They have also demonstrated the will of the House, or lack of, by voting over several Brexit options during indica- tive votes. The round of votes in March saw MPs reject a motion for No Deal by 160 to 400. Their opinions and actions will hold significant weight over coming months, with the new Prime Minister still operating on a wafer-thin majority. 10th July 2019 Dods Monitoring: no-deal Brexit Speaker of the House of Commons The Speaker is the ‘chief officer and highest authority’ of the House of Commons, and its repre- sentative to the monarch. Traditionally, the Speaker is always rigidly impartial but the current speaker, John Bercow, has been heavily criticised by some Brexiteer MPs who claim he uses his po- sition to push forward a ‘Remain’ agenda. His influence over the Brexit process has proven to be immense. His rulings and interpretations of procedure can force the Government to alter their strategy, which we saw this year when he pre- vented Theresa May from bringing back her unchanged Withdrawal Agreement for further votes. It is also up to the Speaker which amendments are chosen, whether to grant emergency debates and he even has a deciding vote when votes are tied. He also holds the deciding vote in the rare event that a vote is tied. In a Parliament where every vote matter, the importance of this cannot be overstated. The Speaker used this vote in April to break a tie and vote with the Government (as is expected) against an amendment by Hilary Benn which, if passed, would have seen the Opposition take control of the parliamentary timetable again. Bercow has gone against previous commitments to stand down by stating that he will remain in post during the Brexit crisis in Parliament, which will be seen as unwelcome news by MPs seeking to leave without a deal. The Opposition The nature of being in opposition means that power over the course of the country is limited, but by no means inconsequential. The Leader of the Opposition poses a constant political threat to the Governing party: so long as they can demonstrate support in the polls or at the ballot box, they ex- ert significant political influence over events. A new Conservative Prime Minister is likely to be reluctant to engage with the official Leader of the Opposition to the extent that Theresa May did towards the end of her premiership, given the criti- cism she received for this. The Opposition, however, is also instrumental in tabling leading amendments, deciding motions for Opposition Day debates and deciding how to whip its MPs on crucial votes. Most significant, perhaps, is the likelihood of the Opposition seeking to bring down the Govern- ment through a no-confidence motion in the Commons. If one was called, and successfully passed, then the country could find itself heading back to the polls very soon indeed. Smaller pro-remain opposition parties will also be essential in brokering any coalitions, or alterna- tive Government’s and under current polling their position could be strengthened in the event of an early General Election.