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The Brexit trap: is there any way out?

Britain’s fate has become a cautionary tale to others. As Theresa May struggles to reach a deal with the EU, Nick Clegg, Yanis Varoufakis and Keir Starmer ask if the deadlock can be broken. 

On the morning of 19 October, Nick Clegg returned to his old constituency in Sheffield for a farewell visit. “You peaked too early, mate,” one voter told the former deputy prime minister who has been appointed as the head of global affairs at Facebook. When we spoke, Clegg was as derisive as ever of Brexit. “The Brexiteers are like people who are howling at the moon, or flat-Earthers who get more and more furious as the evidence piles up that the Earth is oval-shaped, not flat,” Clegg said. “It’s this constant, painful, grinding process where the gap between what they believe is possible in their warped utopia, and what is possible in the real world, collide.”

This was the final interview Clegg gave in his capacity as a Remain campaigner. Later that day his Facebook appointment was announced; he has stopped trying to stop Brexit. On 22 October, Clegg began work at Facebook’s Silicon Valley headquarters. As scornful as he was of the Brexiteers, his actions did not appear to be a vote of confidence in the campaign for a second referendum.

Until the 2016 Brexit vote, no country had ever attempted to leave the EU. The UK is providing an instructive lesson in why. Twenty-eight months after the Leave vote and 19 months after Article 50 was triggered by Theresa May, Britain has yet to reach a withdrawal agreement with the EU. Any deal that is agreed before the 29 March 2019 deadline risks being rejected by parliament, provoking the greatest constitutional crisis for more than a century.

This was not the outcome foretold by Brexiteers. On 11 July 2016, David Davis, the former Brexit secretary, wrote that within two years the UK could “negotiate a free trade area massively larger than the EU”. As recently as 20 July 2017, Liam Fox, the International Trade Secretary, predicted that a new British trade deal with the EU would be “one of the easiest in human history” (the UK has yet to begin trade negotiations).

The lack of progress is not for want of concessions made by the May government. Britain has accepted the EU’s negotiating timetable, offered to pay a £39bn “divorce bill” and issued a unilateral guarantee of European citizens’ rights. In other circumstances, a deal could be easily agreed. The EU has long stated that the “Norway model” – membership of the European Economic Area – is on offer. Combined with membership of a customs union, this would avoid the need for a “hard” Irish border and preserve essential economic advantages. But May, who squandered her parliamentary majority in 2017 (leaving her dependent on the hard-line Protestants of the Democratic Unionist Party) and who has consistently warned that a “soft Brexit” would be a “betrayal” of the Leave vote, has used up almost all of her political lives.

In the absence of a deus ex machina, the UK faces a crisis that could result in one or more of the following: a Conservative leadership election (prompted by a no-confidence vote in May), a new general election, a second referendum or a no-deal Brexit (which would represent the greatest failure of statecraft in British postwar European history). Was this perilous situation inevitable or merely the result of incompetence? And out of chaos, how can order be found?

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During the EU referendum campaign, David Cameron’s aides likened May to a “submarine”, such was her habit of disappearing at key moments. Fearful of alienating Conservative Leavers whose support she would need in a future leadership contest, the pro-Remain home secretary lurked below the waterline.

But on 21 June 2016, two days before the UK voted to leave the EU, May surfaced in Northern Ireland. It was “inconceivable”, she warned, “that a vote for Brexit would not have a negative impact on the north-south border.” May added: “If you pulled out of the EU and came out of free movement, then how could you have a situation where there was an open border with a country that was in the EU and has access to free movement?”

The logic that May deployed has been turned against her by the EU and Remainers. She insists that the UK can both leave the customs union – in order to sign trade deals with other countries – and avoid a hard Irish border. The EU, however, maintains that she must choose. It has demanded a “backstop” – a new border between Northern Ireland and the rest of the UK – to prevent a hard border on the island of Ireland. This prospect is unacceptable to May (“it would mean breaking up our country”) and, still more, to the DUP. But the Prime Minister has consistently rejected the logical solution: full UK membership of a customs union. And so the deadlock endures. The Brexiteer dream of “Empire 2.0” – a swashbuckling Britannia striking trade deals with “the Anglosphere” – is being obstructed by the legacy of Empire 1.0: the Irish Question.

This impasse has raised the spectre of a no-deal Brexit. Indeed, some Leavers, such as Jacob Rees-Mogg, now openly agitate for this outcome even as the civil service warns of shortages of food, medicine and fuel.

But in the view of some, no-deal is mere fantasy: the UK is unprepared to crash out and parliament would veto such an outcome. “The one thing that’s going really well for Theresa May is the lemming-like way that the whole political media community are going on and on about a no-deal Brexit when it remains by far the least likely outcome,” Clegg said. “One of the people intimately involved in the negotiations told me: ‘I wouldn’t put the chances at more than 3-5 per cent.’

“The idea that you have a collapse in the negotiations and that some of the most mature, sophisticated democracies in the world sit around for three months twiddling their thumbs while the bond markets go nuts and you have lurid headlines about radioactive material not being transported and medicines not arriving… they [the EU] might leave it till the last minute but of course they could defer the Article 50 deadline.”

May has always maintained that “no deal is better than a bad deal”. But on 15 October, in response to a question from Tory Remainer Heidi Allen, the Prime Minister hinted that MPs could thwart this outcome. “We would see what position this House would take in the circumstances of the time.”

When David Cameron lost the 2013 Commons vote on military action in Syria, he retained the formal power to take Britain to war. But MPs’ opposition made intervention politically unthinkable back then. Most believe the same would apply to no-deal. “It is simply not possible for a prime minister to take the UK out of the EU without a deal in the face of a majority in parliament,” shadow Brexit secretary Keir Starmer told me. “No deal is simply not a viable option.”

Clegg believes that there is “more than a 50 per cent chance” that May will “scrape home” and pass a Brexit deal. “But it’ll be like a bumblebee after a sting, she’ll die the moment she delivers that hotchpotch Brexit. If she has to rely on Labour support, and if she’s not already been axed by her party, she certainly will be after that.”

May, however, would be unwise to assume Labour MPs will come to her rescue. The number on the opposition benches prepared to back any deal is far exceeded by the number of likely Tory rebels. Mindful of this, the Prime Minister has warned truculent Leavers: “We risk ending up with no Brexit at all.” Could she be right?

If Remainers have refused to accept the referendum result, it is partly because they know that their opponents would have done the same in different circumstances. Back in 2016, Nigel Farage, then the Ukip leader, warned that a 52-48 Remain victory (the margin by which Leave won) would be “unfinished business by a long way”. EU supporters cite the words of David Davis in 2012: “If a democracy cannot change its mind, it ceases to be a democracy.”

Opponents of Brexit concede that public opinion has not changed much since 2016. “I don’t want to over-egg the pudding and suggest there’s been a massive shift,” Labour MP Chuka Umunna told me. But an increasing number of polls show a majority of voters support a second referendum.

On 20 October, as many as 700,000 people marched in central London for a “People’s Vote” – the largest public demonstration since the 2003 protest against the Iraq War. Before 2016, EU flags were seldom flown in Britain; in parts of the country they are now ubiquitous. Brexit has done more for consciousness-raising than all of Brussels’s propaganda.

The possibility of a parliamentary deadlock – with no proposal able to achieve a majority – means there is a pragmatic as well as a principled case for a second vote (an eventuality the civil service is making contingency plans for). “Within two days of the last referendum I said that there would have to be another referendum or another election – it would have to go back to the people when they knew what they were voting for,” Michael Heseltine, the Tory Europhile, told me.

But Yanis Varoufakis, the former Greek finance minister, who persuaded the Eurosceptic Jeremy Corbyn to campaign for Remain in 2016, warned that a second referendum “would completely poison politics in Britain” and that it was far from certain that the result would “go against Brexit”. He added: “For a democratic decision, there would have to be three options on the ballot paper [deal, no-deal, and Remain], not two. That’s not a referendum – that’s a joke.”

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The People’s Vote campaign privately says that it will not table a parliamentary motion on the issue unless the Labour leadership endorses such a move. The priority of Corbyn’s team is to create the conditions for a new general election – but the defeat of May’s deal alone would not achieve this. As Starmer told me: “It will take Tory or DUP MPs voting with us to trigger an election.” After the Corbyn surge of 2017, few Tories are prepared to do so. “If we can’t get a general election then we press on, according to Labour’s conference motion, to other options, including the option of campaigning for a public vote,” Starmer said.

If there is not a second referendum, some Tory MPs suggest May should endorse membership of the European Economic Area, which, in effect, would amount to a “soft Brexit”. I asked one Labour Remainer if he would consider backing this outcome. “I’d only consider that avenue after the defeat of a People’s Vote motion, not before,” he said. Any Brexit deal the UK agrees will be inferior to its present arrangement. A soft Brexit would sacrifice political sovereignty – with the UK becoming a rule-taker, rather than a rule-maker – while a hard Brexit would sacrifice economic prosperity.

Faced with this choice, Britain has been routinely accused of wishing to “have its cake and eat it”. The irony is that it was already doing so. We enjoyed formal opt-outs from the euro (the only member state other than Denmark to do so) and the borderless Schengen Zone, a £4.9bn budget rebate and an exemption from the EU’s refugee policy.

Britain was, however, obliged to accept free movement, the most polarising issue during the referendum campaign. But just as the UK prepares to depart, and after nationalist insurgencies across Europe, EU leaders are increasingly open to reform.

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As he prepared to leave Britain and politics, Clegg said: “It’s just agonising because European leaders all say privately, ‘We weren’t that inventive ourselves, back in the day. We weren’t under the same domestic pressure as we are now over the issue and, secondly, we were being told by Cameron and his people that they were going to win [the referendum] anyway.’”

The UK, like many European countries, has been disrupted by illiberal forces. In France, Marine Le Pen, the far-right candidate, won 34 per cent of the vote in the 2017 presidential election. In Germany, the nationalist Alternative für Deutschland has become the main opposition party. In Italy, the populist Five Star Movement and the xenophobic Lega have entered office.

But not one of these parties is proposing EU withdrawal. Indeed, Le Pen and the Lega leader Matteo Salvini have reassured voters that they would no longer even seek to leave the European single currency.

When the UK voted for Brexit in 2016, Leavers boasted that this would serve as an example to others and spark a “chain reaction” across Europe. It did not happen. Two years later, a troubled and divided country has become something else: a warning.

George Eaton is deputy editor of the New Statesman.

This article first appeared in the 26 October 2018 issue of the New Statesman, The Brexit crash