Still Confused About Brexit? You Should Be

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Ed. note: Enjoy this timely dispatch from London by MetalMiner’s Editor at Large.

Not just Europe but the entire world was surprised at Britain’s decision following a referendum in 2016 to leave the EU.

At the time, the media was full of the story but in the interim we have all rather switched off as the negotiations have taken a tortuous route back and forth without appearing to make any progress. Brits have largely despaired that their government will ever come to a workable solution, an opinion reinforced last week when the latest (and according to the EU) final deal was presented to parliament, only for it to be roundly rejected and face the prospect this week of being formally thrown out if it is put to a vote.

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Now, even though Prime Minister Theresa May has just delayed a Commons vote for the plan that was originally scheduled for tomorrow, the prospect of Brexit is not some far-off threat; come the end of March, the UK formally leaves the EU and — whatever happens — will have to accept a new form of relationship with its neighbors.

The questions is, how will we get there at this point?

If you have followed the news and are confused by what the latest offering provides you are in good company; pretty much the whole of the UK is equally perplexed. Prime Minister Theresa May’s plan meets some of the objectives voters are believed to have wanted when a slim majority voted to leave in 2016.

The first and most significant is that the UK will be able to limit immigration from Europe, although that has already dropped markedly and now immigration from outside the EU is much higher than immigration from within – much to the disappointment of business because the language, education and experience levels of such immigrants are generally lower. However, for older voters and those in more rural areas, immigration was a significant motivator to vote “leave,” as immigrants were perceived to be depressing wages and taking jobs.

Secondly, the UK retains tariff-free borders with the EU. Indeed, this remains the largest issue for both Remainers and Leavers because the EU has insisted on a “backstop” agreement that in the event of a trade deal not being agreed upon between the UK and EU, an alternative to a hard border between Eire (an EU member) and Northern Ireland (part of the UK) will be agreed. This is the so-called backstop agreement — the UK government signed a formal agreement in December last year with the EU guaranteeing that there would never be a physical border across the island of Ireland after Brexit. For the rest of the UK to leave the single market therefore meant there would have to be a hard border between Northern Ireland and the rest of the UK down the middle of the Irish Sea. Northern Ireland’s majority DUP party and a significant number of conservative MPs are dead set against this, as it would effectively keep Northern Ireland in the EU while the UK was out.

Both conservative and labour party members are split about the merits of May’s plan, but what seems clear is a majority in both camps are against it; as a result, it will probably get voted down whenever it is rescheduled if May is not able to wring further concessions out of Brussels.

If that happens, there are a number of possible options.

Option 1: ‘Hard’ Brexit

The first is clearly a hard Brexit with the UK leaving the EU and reverting to WTO rules.

While a few die-hard Leavers would welcome that the majority of MPs are against it on economic grounds, it is generally accepted as being the most economically damaging outcome for the UK economy. A survey of SMEs out last week by the Harvard Kennedy School says what businesses want is either the “Norway Now” option that keeps Britain inside the single market and customs union, or a referendum that paves the way for Britain to stay in the EU. Not that the EU has said they would be prepared for us to revert to a Norway model, but facing reality has not been a feature of MPs’ aspirations so far in this Brexit process.

Option 2: Second Referendum?

A referendum was previously out of the question, and it was presented by Leavers as a betrayal of democracy – the people had voted to leave and it was parliament’s responsibility to deliver on that vote.

But there is a growing number of MPs that feel what the country voted for two-and-a-half years ago is not what it is getting in May’s plan and voters deserve the right to cast their decision on what Brexit will really be now that it is clearer what a fudge of a compromise it is. Whether the groundswell of support for a second referendum will be sufficient to force a re-vote remains to be seen, but it is gaining some momentum.

Option 3: Further Concessions?

A third possibility is that by some miraculous turn of events Theresa May is able to screw some further concessions from Brussels, particularly regarding an end date to the back-top agreement over Northern Ireland.

That would probably be enough for a majority to back the deal; however, many MPs and much of the country hates the idea of remaining answerable to the EU’s rules with no say on how those rules are made. Most can at least agree that being in a form of tariff-free (if not totally free) trade agreement makes economic sense.

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In that sense, at least both MPs and — to be confirmed if it comes to a referendum — probably a majority of voters are finally accepting reality.

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