Ample fallout from May’s Brexit vote defeat

When U.K. Prime Minister Theresa May stalled a crucial House of Commons vote in December because she recognised she might not have the necessary support to push her European Union-Brexit deal through, she hoped the impending 100-day deadline would force more Members of Parliament to back her deal—in desperation rather than through choice.

On Tuesday, her gambit misfired spectacularly. Members of Parliament (MPs) from all parties overwhelmingly voted against the Brexit deal she negotiated with the European Union. The last time a government was so roundly defeated in a Commons vote was in 1924. One MP, Tulip Siddiq, even delayed her planned Caesarian-section so she could vote against the government.

Labour tabled a vote of “no confidence” following the result: May's government narrowly won that vote, 325 to 306, Wednesday, but her authority will remain sorely bruised.

In reality, the outcome has not surprised many—though the scale of May's defeat on the Brexit vote might have done so. European politicians are deflated by the result, but so far there is little sign the European Union is prepared to negotiate another deal, especially within a 10-week timeframe. The Commission is set to wind down its activities from April as new Commissioners will take office in November, and European Parliamentary elections take place in May, hence the original push to finalise Brexit by the end of March. A delayed Brexit—which looks possible—could mean the United Kingdom would need to elect MEPs to sit in Brussels, a scenario none of the other 27 EU member states wants.

In a statement released shortly after May’s humiliating Brexit defeat, European Commission President Jean-Claude Juncker both regretted the outcome and restated the EU’s offer that U.K. politicians roundly rejected was a “fair compromise and the best possible deal.”

He said the Withdrawal Agreement “is the only way to ensure an orderly withdrawal of the United Kingdom from the European Union,” adding “the risk of a disorderly withdrawal of the United Kingdom has increased with this evening's vote.”

Juncker urged the United Kingdom “to clarify its intentions as soon as possible” as “time is almost up.” He added, “the European Commission will continue its contingency work to help ensure the EU is fully prepared” for a no-deal scenario.

The EU’s chief Brexit negotiator, Michel Barnier, took a similar line. In an address to the European Parliament the day after the vote, he told MEPs “the compromise reached after 18 months is the best compromise. It is the result of constructive work and attitude, which we will maintain until the end: calm, unity, dialogue, and transparency. It is now for the U.K. to clarify how it wishes to proceed.”

It is unclear, however, what MPs do want. As May herself pointed out, the vote was a rejection of her plan—it does not endorse any alternative. MPs’ views on what deal (if any) they want with the European Union are still as fractious as they were when the referendum result was called in June 2016.

Having survived the “no confidence” vote, May must submit a “Plan B” Brexit option to the Commons on 21 January, with a vote on it to take place by 30 January. As the prime minister has continuously refused to countenance any other options, however, few have faith that a hastily cobbled-together alternative will curry favour with either MPs or the European Union.

“This crushing defeat shows that Theresa May is out of options. It’s time to give the people the final say, whether through a general election or popular vote.”

Frances O’Grady, General Secretary, Trades Union Congress

Guy Verhofstadt, the former Belgian prime minister who is the European Parliament’s representative for the Brexit negotiations, has advised that the U.K.’s main parties should come together and consult on what they want from the European Union and put aside party politics for the benefit of national interest.

He wrote on Twitter: “It is not up to me, as a humble Belgian, to lecture Brits on what to do, but I think it’s time the national interest overtakes narrow party politics and cross-party politics redefines the redlines imposed by hardliners in the Conservative party.”

In another tweet, however, Verhofstadt underlined the need to resolve negotiations swiftly. “What we will not let happen, deal or no deal, is that the mess in British politics is again imported into European politics. While we understand the U.K. could need more time, for us it is unthinkable that Article 50 could be prolonged beyond the European elections.”

Other leading EU politicians have suggested there might still be room to manoeuvre. German Chancellor Angela Merkel has said there is still “time to negotiate” over Brexit, but it is up to the U.K. government to announce the next step. Speaking to reporters in the German parliament, Merkel said: “We want to limit the damage as much as we can—and there will be damage in any case. That’s why we will keep trying to find an orderly solution but we also have prepared for the possibility of a disorderly Brexit.”

Donald Tusk, president of the European Council, the body that defines the EU’s overall political direction and priorities, has hinted that perhaps Brits would be better off if the Brexit process was simply called off. In December the European Court of Justice (ECJ) ruled the United Kingdom could stop Article 50 in its tracks and abandon the whole endeavour—right up until 28 March and without seeking EU approval: the country could retain the status quo and carry on as normal.

On Twitter, Tusk wrote: “If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?”

Hardline Brexiteers, however, are defiant. Many have taken to Twitter to evoke memories of the Second World War, saying, “Britain never surrenders.” The fact that the United Kingdom was bankrupt following the war is conspicuously absent from such nostalgic messages.

David Davis MP, May’s original Brexit chief who resigned when she issued her original Chequers plan detailing a very “soft” exit, tweeted, “A WTO deal is not the preferred outcome. But we need not fear the never-ending scare stories. We have the upsides of a floating pound, global trade deals, and entrepreneurial spirit.”

British business does not share Davis’ optimism. Stephen Phipson CEO of EEF, the U.K.’s manufacturers’ organisation, said: “After two years of negotiations, Westminster has failed to deliver a workable plan for Brexit. Parliament’s pantomime now continues while business suffers impossible uncertainty which will only worsen investment and the worrying business climate. The Government and Parliament must act collectively, swiftly, and decisively in the best interest of the people and the economy. The time for theatre is over.”

“We need a way forward urgently that avoids no-deal,” said Huw Evans, director general of the Association of British Insurers, the industry’s lobby group. “This is uncharted territory and we face a period of unprecedented uncertainty.”

Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), which styles itself as the voice of “Corporate U.K.,” said: “Every business will feel no deal is hurtling closer. A new plan is needed immediately. This is now a time for our politicians to make history as leaders. All MPs need to reflect on the need for compromise and to act at speed to protect the U.K.’s economy.”

Meanwhile, the British Chambers of Commerce (BCC) said in a statement that “there are no more words to describe the frustration, impatience, and growing anger amongst business after two and a half years on a high-stakes political rollercoaster ride that shows no sign of stopping.”

“Basic questions on real-world operational issues remain unanswered,” said the BCC. “Firms now find themselves facing the unwelcome prospect of a messy and disorderly exit from the EU on 29 March.”

Like other business groups, the BCC says the “overriding priority” for both the U.K. Government and Parliament “must now be to avoid the clear danger” of a “no deal” exit. “Every second that ticks by sees more businesses spending money on unwanted changes, activating contingency plans, or battening down the hatches and halting investment, as they try to anticipate a future that is no clearer now than it was at the time of the referendum result,” it said.

Some have suggested a second referendum now needs to take place given the bleak warnings that the likes of the OECD, the Bank of England, and even May’s Chancellor of the Exchequer (the U.K.’s chief Treasury Minister) have given regarding the hit to the country’s economy should any form of Brexit take place. “This crushing defeat shows that Theresa May is out of options,” tweeted Frances O’Grady, general secretary of the Trades Union Congress, the U.K.’s largest labour organisation. “It’s time to give the people the final say, whether through a general election or popular vote.”

European business is also “extremely disturbed” by the U.K.’s rejection of the EU deal. “Yesterday’s vote has unfortunately significantly increased the risk of no-deal,” said Markus J. Beyrer, director general of BusinessEurope, a pan-European association of business lobby groups. “No-deal is absolutely unacceptable for the European business community. It will create chaos and disarray and must be avoided.”

The group says preparations for no-deal must be “fast-tracked” to mitigate “major disruption.” It also urges the United Kingdom and European Union to work together to ensure continuity in cross-border trade, the operation of financial markets, the flow of data, and customs arrangements.