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If May Can't Win Her Brexit Vote, What Other Options Are There?

Robert Hutton and Kitty Donaldson
If May Can't Win Her Brexit Vote, What Other Options Are There?

(Bloomberg) -- Almost everyone agrees that Theresa May’s Brexit deal won’t get through Parliament when it comes to a crucial vote on Tuesday. But can anything else?

The prime minister has been meeting opposition members of Parliament and calling trade-union leaders in the hope of building support. She has also signaled willingness to accept amendments that might win some votes -- though some of them are unlikely to go down well with the European Union.

For all that, unless there’s a big shift in parliamentary opinion, a significant majority against her deal seems inevitable. So where does she go from there? Lots of people in Parliament have suggestions about how to re-write the government’s Brexit policy. Some of the options mean delaying exit day, a scenario investors are increasingly expecting.

Customs Union

May is pursuing a hybrid customs set-up with the EU after Brexit, while the Labour Party advocates a full customs union that would keep trade free of tariffs and other obstacles. May has rejected this many times, but with Cabinet colleagues publicly urging Parliament to find a consensus, this has got to be a possible landing spot.

The pro-Brexit Conservatives, who hate the idea because it binds the U.K. too closely to the bloc, have few threats left to make against May. They’ve failed to shift her as leader, and they’re already voting against the deal that she’s got. She needs to find votes somewhere else, and even if the Labour leadership didn’t vote for this, many in the party would be tempted.

Norway (For Now?)

The compromise for Conservatives who want to honor the 2016 referendum but don’t like the look of May’s deal is to join the European Free Trade Association, and keep Britain inside the EU’s single market. This idea -- also known as “Norway-plus” -- could be a temporary move until a better, permanent answer can be found.

The chief advocates of such a plan are former Tory minister Nick Boles and Labour lawmaker Stephen Kinnock. It’s not clear the EU or EFTA would agree to this. Boles and Kinnock see their idea as a potential lifeboat option, which they could formally propose after May’s deal is voted down and other choices have failed to win support.

“The Norway-plus option delivers on the narrow result of the referendum but removes us from the political institutions of the EU whilst keeping us in a close and frictionless economic relationship,” Kinnock said in an interview. “It’s also the only option that deals with the Irish border issue, that takes us out of the jurisdiction of the European Court of Justice and meets Labour’s six tests. Moreover it seems highly likely that it commands a parliamentary majority.”

It doesn’t bring an end to free movement of people, one of the main reasons voters wanted to leave the bloc.

No Confidence

Labour leader Jeremy Corbyn has said he will propose a vote of no confidence in the government if May loses the vote, and the pressure on him to do so will build next week. He has so far held off, to the frustration of some of his MPs, arguing it’s better to strike when he’s most likely to win. His best chance is probably if Brexit-supporting Tories decide May is going to betray them. It would take fewer than 10 Conservatives to switch sides to bring down the government, and Brexiteers have privately discussed doing so as a nuclear option.

U.K. electoral law would give the Conservatives two weeks to try to form a new government after a confidence vote, and only after that an election would be called. That means angry Tories could use it as a warning to May, though it’s a high-risk strategy.

If the vote of no-confidence fails, then Corbyn would be under pressure to back a second referendum. There’s overwhelming support for a re-do among party membership and he’s said he wouldn’t rule it out as a second-best option if he can’t trigger an election.

Second Referendum

For those who think Brexit is a terrible idea that should simply be abandoned, a re-run of the 2016 plebiscite is the democratic way to deliver their goal. There are discussions in Parliament about an amendment to May’s motion that would make approval of the deal subject to another national vote.

The problem is that this isn’t yet the policy of the opposition Labour Party, and as long as that remains the case, there’s no majority in Parliament for a second referendum. However, that could shift.

If Labour does get on board with calls for a “People’s Vote,” the party will find support from rebel Conservatives, Scottish Nationalists, and Liberal Democrats. About 10 Tories publicly support another plebiscite.

No Deal

There have been attempts to re-brand a “no-deal” departure as a “World Trade Deal’’ or even “Clean Global Brexit.’’ Supporters of leaving the EU without an overarching agreement want to maintain a minimal level of cooperation with the bloc to do things like keep planes flying. Then, they hope to negotiate a better free trade agreement from outside the EU, similar to the one Canada has. The trouble with this idea is that the EU says it won’t contemplate a bare-bones exit deal, and there will be no transitional grace period if the divorce accord that’s been negotiated doesn’t get approved.

No deal is the default outcome if there’s no other resolution in the next two and a half months. However, resistance to tumbling out into a legal limbo has hardened since last year. There are 20 Conservatives committed to voting against it every chance they get, and Cabinet members are increasingly speaking up against it.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Emma Ross-Thomas, Stuart Biggs

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