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Britain’s Future Hanging on a Thread

On 15 January 2019, the British Parliament rejected the withdrawal agreement negotiated between Prime Minister Theresa May and her European counterparts with an overwhelming vote of 432 to 202. This is the worst political defeat in British parliamentary history. May reportedly stated after the vote that “it is clear that the house does not support this deal but tonight's vote tells us nothing about what it does support".

A key obstacle in the Brexit process is the disagreement over the type of border between Ireland and Northern Ireland after Brexit. The EU’s concern is that with the Republic of Ireland as a Member State, border checks would be needed to ensure that sub-standard goods do not enter the EU from Northern Ireland, or that goods are not smuggled over the border without the payment of tariffs if these became applicable. While neither Britain nor the EU want a “hard border” with physical checks, and prefer a “soft border” relying on technology-enabled solutions to scan goods at factories and in trucks, the path to such a desire is proving to be tougher than ever.

On 25 November 2018, EU leaders had approved an agreement that included a so-called “backstop” arrangement. Disagreement over this backstop proposal was one of the chief reasons she lost the Brexit vote in Parliament.

Under her draft deal (now rejected), the EU and Britain would have agreed that Northern Ireland would follow the rules of the EU single market if another solution could not be found by the end of the transition period in December 2020. That would have meant that goods coming into Northern Ireland would have needed to be checked to see if they met EU standards. It would also have involved a temporary single customs territory effectively keeping the whole of Britain in the EU Customs Union.

As a reaction to the vote against the draft withdrawal agreement, leader of the opposition Labour party, Jeremy Corbyn, tabled a motion of no-confidence in May’s government. On 16 January 2019, Members of Parliament voted 325 to 306 in favour of the government remaining in power, only one day after rejecting the Prime Minister's Brexit deal.

Time and options are running out for an orderly Brexit. In principle, Britain now has four possible options: (i) to delay Brexit, (ii) to leave the EU with a renegotiated deal, (iii) to leave the EU without a deal, or (iv) to remain in the EU. These options also involve the possibility of a second referendum and/ or a second vote of no-confidence.

First of all, Britain could ask the EU for an extension on Article 50 of the Treaty of Lisbon, which gives any EU Member State the right to leave the EU unilaterally, within two years, during which to negotiate an exit deal. Britain could ask to postpone the Brexit date beyond 29 March 2019 and thereby buy more time to work out the issues with the withdrawal agreement. However, an extension would require a request by the British government and the unanimous consent of all 27 remaining EU Member States.

According to an indication of European Commission chief spokesman Margaritis Schinas, the EU Member States could agree to extend the Brexit deadline if the UK "provides the reasons for such an extension". Austrian Chancellor Sebastian Kurz said moving the Brexit deadline would only be considered if London suggested an orderly strategy and a plan.

For the second option mentioned above, which appears to be the current chosen way forward, the Prime Minister has three working days to outline her response to the rejected withdrawal agreement, known as “Plan B”, and to hold talks with political parties so as to arrive at that “Plan B”. On 21 January 2019, the revised deal is expected to be presented to the UK Parliament. If approved, May will take the revised deal to EU leaders and – if the EU were to agree with it – Britain could leave the EU on the revised terms on 29 March 2019. However, it is uncertain, and considered rather unlikely, that the EU would agree even to reopen negotiations, let alone agree to such a revised deal.

The EU described the withdrawal agreement negotiated as the best possible deal within the constraints of the British government’s red lines, and underscores the fact that a departing Member State cannot retain the benefits of EU membership. Jean-Claude Juncker, president of the European Commission, stressed that the EU had invested “enormous time and effort to negotiate” the deal and had “shown creativity and flexibility throughout”. He also urged the UK to clarify its intentions as soon as possible.

Commission chief spokesman Margaritis Schinas stressed that the agreed terms of Brexit could not be reworked, but left some leeway on more peripheral issues. Germany's Economy Minister Peter Altmaier stated that there would be no major substantive changes to the deal between Prime Minister Theresa May and the EU. French President Emmanuel Macron might possibly consider marginal improvements on minor points, but also thinks that “we’ve reached the maximum of what we could do with the deal, and we won’t, just to solve Britain’s domestic political issues, stop defending European interests.”

Moreover, if the revised agreement is rejected, one of the various scenarios could play out: the Labour Party could call for a second vote of no-confidence in the May government; it could request a second referendum; or May could resign. Another possibility that was being discussed before the no-confidence vote, an early General Election, is now off the table.

The third option is called the “hard Brexit”. Leaving the EU without an agreement is feared to lead to legal, political and economic chaos.

The EU will intensify preparations for a hard Brexit in March. "While we do not want this to happen, the European Commission will continue its contingency work to help ensure the EU is fully prepared," Jean-Claude Juncker, president of the European Commission, said. "Time is almost up," he posted on Twitter, and “the risk of a disorderly withdrawal of the United Kingdom has increased with this evening's vote”, he said in a statement following the British parliament's rejection of a Brexit deal with the EU.

Belgium's Prime Minister Charles Michel and German Chancellor Angela Merkel stated that their countries are considering plans for a no-deal Brexit, trying to minimize damage.

Lastly, remaining in the EU would be feasible according to a ruling of the Court of Justice of the European Union, issued in December 2018. The European Court decided that it should remain the sovereign right of a Member State to cancel its withdrawal application before it came into force. This could also be done through a rapid referendum, also referred to as “People’s vote”, although Prime Minister May continues to disfavour the idea of a second referendum. Prime Minister May also does not want Britain to remain in the EU Customs Union because that would preclude it from pursuing independent trade deals with other countries.

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