Indicative votes

On Monday, 1 April, the House of Commons (the Commons) voted on four possible arrangements (whittled down from the eight voted on last Friday) in an attempt to break the Brexit logjam. All four were rejected:

  • Permanent and comprehensive customs union with the EU – lost by three votes
  • A public vote on any final deal – lost by eight votes
  • Common Market 2.0, under which the UK would join both EFTA and the Customs Union – lost by 21 votes
  • Revoking Article 50 to avoid no deal – lost by 101 votes

Nick Boles, the MP who had spearheaded the Common Market 2.0 option, resigned the Conservative whip following the rejection of his proposal. This brought the government’s working majority down to three.

Plan B

On Tuesday, Theresa May chaired an astonishing eight-hour cabinet meeting to thrash out how the government would proceed. The Prime Minister made three key announcements:

  1. The government would seek a further extension to the Article 50 negotiating period. She did not specify how long the extension would be, but rather that it would be “one that is as short as possible and ends when we pass a deal.” Today, the Prime Minister wrote to Donald Tusk, the President of the European Council, requesting an extension until 30 June 2019 with the intention of ratifying the deal before 22 May 2019 to avoid the UK participating in European Parliamentary elections. It has been reported that Mr Tusk is pushing for a one-year flexible extension (or flextension) with an option to withdraw earlier should the deal be ratified. In turn, Theresa May would use this period to roll out two changes in her Brexit strategy.
  2. First, she would open formal discussions with the Labour Party to agree on a future trading relationship with the EU on the condition that it guarantees the passage of the Withdrawal Agreement. Jeremy Corbyn, the leader of the Labour Party, welcomed the talks and issued a constructive statement. The expectation was that the Prime Minister may agree to a permanent customs union with the EU, a key Labour policy which she has persistently opposed, in exchange for Labour backing her deal. At the time of writing, these talks were ongoing and have been described as “detailed and productive,” but the inclusion of a Labour-backed second referendum will be a major sticking point.
  3. Second, should those discussions fail to produce a single plan, the government and the opposition would put a number of options before the Commons to vote on. Crucially, however, the government would commit to implement the outcome should a decision be reached. The Prime Minister has not clarified when these votes will take place.

Theresa May's intention is to take an agreed plan to the European Council Summit next Wednesday, where the EU-27 will decide on whether to grant an extension, and on what terms. If the Plan B above yields a result, an extension will probably be granted and lead to a softer Brexit: (i) in the form of a customs union agreed with the Labour Party or (ii) a similar Commons-backed package, entailing either membership of the Single Market, a customs union, or both.

On Wednesday, Labour MP Yvette Cooper's backbench Bill (i.e. one not supported by the government) obliging the Prime Minister to request an extension of the negotiating period was passed by a single vote. This is the first time in living memory that the Commons has passed legislation against the wishes of the government. The Bill is likely to be passed by the House of Lords on Monday.

Key developments this week in the EU-27

EU warns of increasing likelihood of no-deal Brexit

    • After the third rejection of the Withdrawal Agreement in the Commons last Friday, the probability of a no-deal Brexit appeared to increase.
    • During the last European Parliament plenary session in Brussels on Tuesday, 3 April, the EU's chief Brexit negotiator, Michel Barnier, cautioned that a no-deal Brexit “becomes day after day more likely.”
    • French President Emmanuel Macron affirmed on Tuesday, 3 April, that it was now up to the UK “to present a credible alternative plan […] between now and 10 April to avoid” a no-deal Brexit.
    • The Polish State Secretary for EU Affairs, Konrad Szymański, similarly claimed that, although no one would want a no-deal Brexit, “it is more and more the dominant option on the horizon.”

But…

    • Donald Tusk’s proposed flextension could see the UK signing up to a one-year Brexit delay with the option to cut it short as soon as the UK Parliament ratifies the Brexit deal. This has yet to be backed by the EU Member States, and each one has the right to veto an extension.
    • Michel Barnier made clear on Tuesday, 3 April, however, that any demand for a longer extension would need to be backed by a “strong justification.” He reiterated that “during any long extension, there will be no renegotiation of the Brexit Withdrawal Agreement,” nor would there be any negotiation on “the future relations.”Nonetheless, preventing a no-deal Brexit remains in the EU's core interest. European Commission President, Jean-Claude Juncker, underlined that he “will personally do everything I can to prevent a disorderly Brexit and I expect political leaders across the EU-27 and in the UK to do the same.”

Schengen visa-waiver

  • The EU Member States and the European Parliament this week provisionally agreed on legislation to grant visa-free travel to the EU for UK citizens after Brexit. On the condition that the UK reciprocates with visa-free travel for EU citizens travelling to the UK (which it is planning to do), these rules will exempt UK nationals from the requirement to have a Schengen visa when travelling to the Schengen Area for short stays of up to 90 days within any 180-day period. Once formally adopted, this waiver would apply as of midnight on 12 April 2019 in the case of a no-deal Brexit, and as of the end of the transition period in the case of an orderly withdrawal.

Other no-deal preparations

  • Pierre Moscovici, the European Economy Commissioner responsible for customs, spelled out the practical realities of the UK leaving without a deal. He said that the UK would immediately become a third country and the European customs code would apply to all goods arriving from the UK. This means that UK businesses would have to comply with customs formalities, pay the relevant duties and VAT, and their goods would be subject to customs checks.
  • Jyrki Katainen, Vice-President of the Commission, responsible for Jobs, Growth, Investment and Competitiveness, reassured that the “safety of medicines will remain unchanged and Member States and the European Medicines Agency are constantly monitoring the situation and liaising with industry to ensure availability of medicines in the EU.”
  • Similarly, on 4 April, Violeta Bulc, the EU Transport Commissioner, presented the EU's preparations for the transport sector in the event of a no-deal Brexit. Bulc set out that, so long as the UK guarantees reciprocity, the EU has taken all the necessary measures on air, road and rail transport that will allow for the “continuation of safe basic connectivity between the EU and the UK for a limited period of time.”