Disorder, deal or dead-end: How will Brexit play out?

[August 13, 2018]  By Guy Faulconbridge

LONDON (Reuters) - The United Kingdom is due to leave the European Union on March 29, yet little is clear: There is, so far, no divorce deal, rivals to Prime Minister Theresa May are circling and some lawmakers are pushing for a rerun of the 2016 referendum.

How will the Brexit finale play out?

Following are scenarios:

1) DISORDERLY BREXIT

If May is toppled, fails to reach a deal with the EU or finds her deal is rejected by parliament, the United Kingdom would be plunged into crisis.

Many opponents of Brexit predict this outcome, as do some supporters of a deeper break with the EU than that advocated by the prime minister.

- MAY FALLS

May's botched snap election in 2017 lost her party its majority in parliament. Her minority government is now propped up by nine Democratic Unionist Party lawmakers from Northern Ireland.

Her own Conservative Party, which has grappled with schism over Europe for 30 years, is in open conflict and some lawmakers want a change of leader to be tougher in Brexit negotiations.

If May fell, the Conservative Party would have to select a new leader, a step that would delay already tight negotiations. A national election is possible, though not legally necessary.

Opinion polls, though, show the United Kingdom is divided in its support for Brexit and political parties: no party has a clear enough lead to confidently predict victory in an election.

Labour leader Jeremy Corbyn, a socialist who voted 'out' in the 1975 referendum on membership of the European Community, has seen his poll ratings fall.

Possible successors to May include Boris Johnson, her former foreign secretary, interior minister Sajid Javid, environment minister Michael Gove or Dominic Raab, her new Brexit minister.

Other possible contenders include Tom Tugendhat, a former soldier and chair of the Foreign Affairs Select Committee, or lawmaker Jacob Rees-Mogg.

While the majority of Conservative lawmakers voted against Brexit, many have since switched to supporting Brexit and up to 80 of the 316 Conservative lawmakers now support a sharper split with the EU than May is proposing.

- NO DEAL

Both London and Brussels say they want to get a divorce deal at the October 18 EU Council but diplomats think that target date is too optimistic.

Two documents need to be agreed: the Withdrawal Agreement Treaty (currently 129 pages long) and a political declaration on the framework for a future relationship. The political declaration could set out aims in general terms.

EU Brexit negotiator Michel Barnier rejected key elements of May's new trade proposals last month.

Agreeing a feasible arrangement for the Northern Irish border with the Republic of Ireland is one of several major hurdles and EU crises such as the 2015 Greek bailout shows how protracted negotiations can be.

If May cannot get a deal by October, an agreement could be reached at the December 13/14 EU Council.

- DEAL REJECTED

Any deal with the EU must be approved by the British parliament, which is due to go on Christmas holiday from Dec. 20 to Jan. 7. If British lawmakers reject a deal in late December or early January, Britain would face the prospect of leaving the EU three months later without an agreement.

The country would move from seamless trade with the rest of the European Union to customs arrangements set by the World Trade Organisation for external states with no preferential deals.

Some business leaders have warned that adding just two minutes onto every lorry’s customs procedure passing through the southern English port of Dover would produce a 14-mile tailback on either side of the Channel after one day.

Supporters of Brexit say those fears are overblown and that the UK economy would thrive in the long term outside the EU.

If the deal was rejected, May would be likely to resign and neither her party, nor Labour, could be certain of winning an election.

A man holds an anti-Brexit banner on Westminster Bridge, in central London, Britain, July 13, 2018. REUTERS/Yves Herman/File Photo

The prime minister is betting that the fear of a so called "no-deal" scenario will push many Conservative and Labour lawmakers to support a deal. But the numbers are tight.

Parliament will have two votes: One on the Brexit deal and one on the Withdrawal Agreement and Implementation Bill (WAIB).

Recent votes, such as the July vote knocking down an amendment to the Trade Bill, have shown May can command a majority of around six votes on major Brexit issues.

If the UK faced a no-deal scenario, other options include asking for an extension of the Brexit negotiation (by possibly withdrawing the Article 50 notification - something lawyers say is feasible) or parliament calling for a rerun of the referendum.

2) LAST MINUTE DEAL

British politicians are trying to convince German Chancellor Angela Merkel and French President Emmanuel Macron to ensure that the EU does a deal that May can sell to her parliament.

In that case, little would be likely to change immediately when the United Kingdom leaves the EU on March 29, 2019, because a transition period lasts until 31 Dec. 2020.

May has said she will fight the next UK election, due in 2022, although she would likely face a challenge from her lawmakers before that.

A transition period would not necessarily guarantee a smooth exit; business leaders say they fear politicians have given little thought to the question of how the UK should operate in practice after it leaves the European Union.

3) BREXIT REVERSED

If the UK is thrust into chaos later this year, there is a chance Brexit could be stopped through a popular vote, according to an influential group of British politicians and journalists.

Opinion polls show that the United Kingdom remains deeply divided over Brexit, though some recent surveys have shown a swing towards support for staying in the EU.

A YouGov poll, conducted July 31-Aug. 7 and commissioned by the pro-referendum "People's Vote" campaign, found 45 percent of voters supported holding a new referendum whatever the outcome of talks with the EU, while 34 percent opposed it.

Calling a rerun of a referendum that was a Conservative brainchild would sink the premiership of any Conservative leader while Labour's Corbyn has so far indicated he does not support another referendum.

Supporters of another referendum think parliament could call such a vote if the government was in turmoil.

Brexit supporters have warned that a second referendum on membership of the EU would trigger a major constitutional crisis in Britain with uncertain consequences.

Dominic Cummings, the campaign director of Vote Leave, warned opponents of Brexit to be careful what they wish for, saying a second referendum would result in another vote to leave and could wreck both the main parties.

"The Tories will be destroyed and maybe Labour too," he wrote.

(Reporting by Guy Faulconbridge; editing by Philippa Fletcher)

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