Brexit developments - MPs against ‘no deal’, and would back ‘backstop-free’ deal

1 Feb 2019

The most significant Brexit-related development of the week was a series of votes in the House of Commons on amendments to an anodyne government motion, which gave different groups of MPs a chance to suggest alternative ways forward on Brexit. The key results were that Parliament failed to ‘take control’ of the Brexit process from government, and MPs indicated that the withdrawal agreement could get parliamentary support if the Irish Border backstop is replaced with something more acceptable to MPs. With the EU repeating its opposition to reopening the withdrawal agreement this will not be achieved easily. There is, however, increasing speculation that compromise might be possible – with both the EU and Labour – around a UK-EU customs union.

Tuesday’s votes

The results of the votes on Tuesday 29 January were as follows –

Vote 1 - The Labour amendment – put alternatives to Parliament - DEFEATED
Required ministers to find time for Parliament to consider and vote on options which prevent the UK leaving the EU without a deal (essentially, alternatives to the Prime Minister’s deal). These options must include: Labour’s Brexit position (a customs union, strong relationship with the EU Single Market and dynamic alignment on rights and standards); a “public vote” on a deal or a way forward which has the support of a majority in the House of Commons.
Result – defeated 296-327
Significance – limited; Conservative MPs were always unlikely to back a Labour frontbench proposal; notable for Labour’s first formal call for MPs be given a vote on whether a second referendum should take place, though without saying how the party would actually vote

Vote 2 – The SNP amendment – don’t take Scotland out of the EU against its will - DEFEATED
Makes three demands – extend article 50, rule out ‘no deal’, and “the 62 per cent vote to remain at the EU referendum on 23 June 2016 in Scotland should be respected… the people of Scotland should not be taken out of the EU against their will.”
Result – defeated 39-327
Significance – very limited; was never going to gain support beyond nationalists

Vote 3 – The Grieve amendment – indicative votes - DEFEATED
Suspend the standing order giving government business precedence in the Commons on 12 and 26 February and 5, 12, 19 and 26 March 2019, to allow for indicative votes on different options for the Brexit withdrawal process.
Result – defeated 301-321
Significance – high; shows limited parliamentary appetite for ‘taking control’ from government, at least at this stage

Vote 4 - The Cooper-Boles amendment – Parliament takes control to block ‘no deal’ - DEFEATED
Suspend the standing order which gives government business precedence in the Commons, on Tuesday 5 February 2019. On that day MPs would debate a new piece of backbench legislation – the EU Withdrawal No.3 Bill. That bill, if passed, would place a legal obligation on the government to seek a delay to Article 50 if it was unable to get a Brexit deal through the Commons by February 26.
Result – defeated 298-321
Significance – high; this was thought to have a good chance of passing; 14 Labour MPs voted against it despite a party whip in favour; this would probably have led to article 50 being extended; along with defeat for the Grieve amendment this keeps ‘control’ of the Brexit process (from a UK perspective) firmly in government hands, for the time being at least

Vote 5 – The Reeves amendment – extend article 50 - DEFEATED
An extension to article 50 to be sought if Parliament hasn’t agreed a withdrawal agreement by the end of February
Result – defeated 290-322
Significance – limited; article 50 may be extended at some point (see vote 6 below) but there is limited appetite for tying the government’s hands at this point

Vote 6 – Spelman-Dromey amendment – no to ‘no deal’ - PASSED
This joint proposal by Conservative Caroline Spelman and Labour’s Jack Dromey simply says no deal must not be an option. It is declaratory and does not set out a mechanism for avoiding it.
Result – passed 318-310
Significance – high; this was the only vote the government lost on the night; while this has no binding effect (the government continues to argue that the best way to avoid ‘no deal’ is to agree a deal), combined with earlier votes this constitutes a warning from Parliament that, if the government cannot agree a deal with the EU acceptable to MPs, then it should either extend article 50 to provide more time to agree a deal or it is likely Parliament will force it to do this

Vote 7 – The Brady amendment – scrap the backstop - PASSED
This makes support for the deal conditional on the EU replacing the Northern Irish backstop with “alternative arrangements to avoid a hard border.”
Result – passed 317-301 (the government told its MPs to vote for this amendment)
Significance – very high; while the obstacles to replacing the backstop are substantial (see below) this indicates that if the government can achieve this Parliament will probably back the agreement. ‘Probably’ because there is widespread suspicion that some who backed this amendment really favour a much looser deal and would prefer ‘no deal’ to even a backstop-less deal, so they may find another reason to reject the agreement or deem any backstop replacement inadequate.

The motion, as amended, and agreed by Parliament, reads:
Resolved, That this House… rejects the United Kingdom leaving the European Union without a Withdrawal Agreement and a Framework for the Future Relationship; and requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border; supports leaving the European Union with a deal and would therefore support the Withdrawal Agreement subject to this change.

Reaction to the votes

The EU reaction to the votes was to repeat its unwillingness to reopen the Withdrawal Agreement. Speaking immediately after the votes, a spokesperson for European Council President Donald Tusk said: “The Withdrawal agreement is and remains the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union. The backstop is part of the Withdrawal Agreement, and the Withdrawal Agreement is not open for renegotiation.” A statement from the Irish government reinforced the same message. However the spokesperson for Tusk said any ‘reasoned request’ for an extension to article 50 would be considered (though it would require unanimity from the EU27.

Labour leader Jeremy Corbyn declared ‘no deal’ to now be off the table following the votes and met with the Prime Minister on Wednesday. The meeting was ‘cordial’. Labour sources said she asked ‘lots of interested questions’ about Labour’s support for a continuing customs union (see below).

The Malthouse Compromise

Late on Monday news emerged that a group of Conservative MPs mixing both hardline Brexiteers and prominent Remainers had come up with a compromise plan for Brexit. The ‘Malthouse Compromise’ (after minister Kit Malthouse who convened the talks) has two stages. Firstly, the Prime Minister would try to renegotiate the backstop element of her Brexit deal, in time to leave the EU as planned on March 29. According to Brexiteer sources the model for the renegotiation would be this report, published in December. In short it looks to simplify customs procedures and formalities relating to crossborder trade in goods as much as possible and to promote trade facilitation while ensuring effective customs controls, without specifying the exact mechanisms by which this would be achieved.  The transition period would be extended by an extra year, to allow more time to agree a new trading relationship.

If the attempt to renegotiate the backstop fails, the second stage of the plan would kick in. This would see the UK government ask the EU to honour the agreed Brexit transition period (again, extended for one year), in exchange for which the UK would honour its agreed financial contributions and its commitments on EU citizens’ rights. This would give both sides time to prepare for a departure on WTO terms at the end of 2021 — or to strike a new trading relationship instead. The plan is summarised by Tory Brexiteers here.

Reaction to the plan has been mixed. ITV’s Robert Peston said the plan had not gone down well in Downing Street. “What has surprised its authors has been Downing Street’s hostility to it, given the very positive welcome accorded it by Tory backbenchers of all persuasions”. The plan was not itself voted on on Tuesday but the way the votes went leaves it on the table. Whether it would be acceptable to the EU is, however, doubtful. Supporters of the plan met with the PM yesterday.

What happens next

UK-EU talks will resume. According to The Times the next round of negotiations will have a far more political feel, with three Cabinet ministers — David Lidington, Stephen Barclay and Geoffrey Cox — taking the lead for the UK. The UK will seek to amend the withdrawal agreement itself, which the EU will resist, instead offering changes to the political declaration. The Times says German Chancellor Angela Merkel does not intend to move an inch before the next big round of parliamentary votes on February 14: “Merkel will ‘go to the edge of the precipice’ with Theresa May as the European Union prepares to reject any change to the Withdrawal Agreement in time for a crucial vote in two weeks”. However the German Chancellor apparently does believe a deal will be done at ‘five to midnight’.

Could a deal be done between Labour and Conservative frontbenches? Most deem it unlikely, believing Jeremy Corbyn would prefer not to ‘get his hands dirty’ by signing up to a Brexit compromise. However a number of analysts believe Corbyn is giving licence to pro-Brexit Labour MPs to keep voting with the government without sanction. And pressure is growing from some quarters for a frontbench deal. Former Shadow Cabinet Minister Lisa Nandy was not among the rebels on Tuesday evening, but made clear in a TV interview afterwards that she believes it’s time for Labour to cut a deal. “[W]e [Labour] have to start compromising, and we have to start dropping some of the red lines that are stopping us from getting to a deal — or we will by default end up with no deal.”

What would a deal be built around? ITV’s Robert Peston blogged after his show on Wednesday night that he thinks a cross-party compromise could be possible based on permanent membership of the customs union. On his show Labour frontbencher Jon Trickett had talked about Labour’s openness to negotiations on safeguarding and enhancing workers’ rights, and Business Secretary Greg Clark had said the government should be reaching out further to win over a larger bloc of Labour votes. However Peston noted that, in seeking to remove the backstop - which includes customs union membership for the whole UK as one of the temporary devices to keep open the border on the island of Ireland – the government was moving against this. He also noted the strong opposition of Conservative Brexiteers to a customs union.

However, a report on Buzzfeed earlier on Wednesday claimed: “Senior ministers are arguing that the controversial Irish backstop issue that stands in the way of a Brexit deal can be solved if the UK commits to a form of permanent customs union with the EU”. Perhaps most intriguingly of all the article quotes two ‘senior Brexiteers’ saying the proposal could work. “We cannot leave the backstop. A permanent customs union you could leave,” said one. One of the Brexiteers said that if the proposal was sold as a “single customs territory” - language already in the political declaration - then it could win the support of some Brexiteer MPs.

Any such ‘deal’ is probably at least one round of failed negotiations away from serious consideration. In the meantime MPs and Peers will continue debating legislation designed to prepare for ‘no deal’. There is increasing recognition, however, that the current pace of legislative passage means, even with the parliamentary half-term break being (probably) cancelled, it will take a miracle - or at least a spectacular acceleration, with attendant implications for scrutiny and quality of draftsmanship (many of the regulations are presumably still being written) – to get it all done by March 29th. An Institute for Government paper published this week sets out the scale of the challenge.

By George Crozier, CIOT Head of External Relations.