Brexit: Back to a second referendum?

To say that the British population is now more confused than ever on the vexed issue of Brexit as to if, and in what form it will finally happen, is the understatement of the new year.

Even the elected Parliamentary representatives are having a hard time making up their mind on whether to support the beleaguered British Prime Minister May in her latest battle with bureaucrats’ in Brussels.

An opinion poll revealed that more than half of Conservative Party members would prefer to leave the EU without a deal rather than under the prime minister’s Brexit plan.

But the poll found a hardening of position in the UK at the seeming stonewalling in Brussels for some more concessions to pave the way for an orderly Brexit exit. The UK is due to leave the EU on 29 March 2019 whether the deal is passed by MPs or not.

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In a two-way choice, 64 percent of grassroots members would opt for a “no-deal” Brexit on 29 March, with just 29 percent preferring the plan Theresa May has negotiated.

In a three-way choice, 57 percent said they would support leaving under the potentially chaotic no-deal scenario. Under a quarter – 23 percent – would back Theresa May’s deal, and 15 percent said they would prefer to remain in the EU.

Crunch vote

Five percent had no preference. Maybe these polls are not really representative or correct, but British MPs are now preparing for a crunch vote on Mrs May’s plan on 15 January.

In an embarrassing volte-face for Mrs May, the vote was due to be held before Christmas but was pushed back at the last minute when it became clear the plan would easily be defeated.

The reason was simple and always was the same one as a roadblock – Mrs May’s attempt to get more guarantees over the controversial Irish border “backstop” – the issue troubling many MPs – was dismissed by European leaders.

Meanwhile, more than 200 MPs have signed a letter to Theresa May, urging her to rule out a no-deal Brexit.

Some who seek an agreement with the EU and move forward argue that the backstop may never be needed, but is intended to prevent a hard border in Ireland by ensuring the UK abides by EU customs rules if a future trade deal cannot be agreed.

But the British Prime Minister is held hostage in her freedom to negotiate by the alliance the Government has with her allies in the Northern Ireland Democratic Unionist Party (DUP) and their crucial 10 parliamentary votes.

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It has not been easy as the DUP deputy leader Nigel Dodds stated that his party’s concerns over the backstop were not eased after a meeting with the Prime Minister and his comments were clear enough.

According to Mr Dodd, “The Withdrawal Agreement, as currently proposed, flies in the face of the government’s commitments on Northern Ireland as we leave the EU.”

But it is not British ruled Northern Ireland that is giving Mrs May a headache, but also the Irish Republic which is a full EU member and opposed to a hard Brexit that introduces border control between the two Irelands.

Ireland’s leader Leo Varadkar has also insisted there can be no changes to the backstop and that he and German chancellor Angela Merkel had agreed to stick to what was previously agreed. Mr Varadkar offered Mrs May an assurance of sorts by declaring “We’re happy to offer reassurances and guarantees to the UK, but not reassurances and guarantees that contradict or change what was agreed back in November.”

But it gets worse for Britain as the European Commission also appeared to shut down Mrs May’s chance for any last-minute tinkering with the deal, saying “no further meetings are foreseen” with the UK because negotiations have ended.

Irish backstop

The Irish backstop negotiations have been the single most intractable issue and some have suggested that reassurances on the Irish backstop were likely to include proposals to minimize any regulatory differences between Northern Ireland and the rest of the UK.

Plans to give Northern Ireland a role in deciding whether the backstop should come into force were also likely as were further possible safeguards for Parliament. This meant MPs perhaps being given a vote before the UK enters the backstop and the right to notify Brussels of the UK’s intention to quit the backstop within a specified time.

Some British ministers also said they hope to set out further reassurances from the EU that the backstop is only temporary, but so far even this has not been agreed and the pro-Brexiteers feel that the temporary might end up to be indefinite.

Many Conservative MPs continue to believe the deal does not represent the Brexit the country voted for, and some are actively calling for Britain to leave with no deal. If the UK leaves the EU without a deal, it would automatically fall back on World Trade Organization rules – which would apply automatically to trade between the UK and EU.

And some die hard Brexit supporters like Boris Johnson have suggested, the no-deal option is “gaining in popularity” and dismissed the warnings against it which he said were “downright apocalyptic”.

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Mr Johnson said he wants Mrs May to remove the backstop from the withdrawal agreement, “to give real legal protection to the UK”. The simple truth is that there is total confusion within the government and the public and With Brexit negotiations paralyzed, and fewer than 100 days till the clock runs out, it seems that the UK government remains entirely unready for a no-deal exit from the European Union and in recent weeks, the government has started making some frantic preparations.

It has directed 2 billion pounds to no-deal provisions and hired some 10,000 staffers, and redeployed hundreds of civil servants to help shorthanded departments and putting about 3,500 troops on standby although to do what no one seems to know. It would seem the earlier slogan of “No deal is better than a bad deal,” as Prime Minister Theresa May has said seems to becoming a prophecy.

Some have suggested that a better approach to all of this would be honesty. The time for bluffing is up. If Parliament rejects her Brexit deal on 15 January – as in all likelihood it will – some have urged that Mrs May should push immediately to delay the Article 50 exit process and stop the countdown.

That would allow time for either new elections or a second referendum that would let the public finally break this deadlock. To have a second referendum would tear the country apart and make a mockery of a democratic choice.

For the Gulf, while all this seems far away, the consequences of these uncertainties is being felt on the UK high streets where Gulf shoppers are making a killing on lower sterling exchange rates and for British expats even better exchange rates are in the offing as the clock tick-tocks to 29 March 2019.
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Dr. Mohamed Ramady is an energy economist and geo-political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia and co author of ‘OPEC in a Post-Shale world – where to next ?’. His latest book is on ‘Saudi Aramco 2030: Post IPO challenges’.