No Brexit or a no-deal Brexit: the stark choice for Britain as Theresa May fails to find a magic formula

Some weeks ago, British Prime Minister Theresa May expressed hope that all parties would take advantage of the coming holidays to reflect carefully on how the UK could implement the decision of the 2016 referendum to quit the European Union.

I don’t know whether members of her own Conservative Party or the opposition Labour Party have done so over Easter, or what answers they may have come up with. But I did consider the different options and came to a rather unnerving preliminary conclusion. By chance, I then had the opportunity to discuss the subject with consuls general from different European countries at a recent diplomatic cocktail party.

The simple fact is that there is no magic formula to undo the UK’s original decision in the 1970s to join the then European economic community. In other words, there may be no deal to be done. Perhaps there is only a stark choice between no Brexit and a no-deal Brexit.

Over the past 40 years, with the UK inside what grew into the European Union, life did not stand still. Rather, it developed in ways that accommodated the new facts. Thus, millions of EU citizens found themselves living and working in other member countries. Companies’ supply chains became much more complex and sophisticated because free trade made this possible. Components move backwards and forwards between countries before a finished product emerges as an export from one of them.

Most tellingly, the removal of the hard border between the independent country of Ireland, and the corner of the island – Northern Ireland – which remains part of the UK, made possible the peace deal of 1998 known as the Good Friday Agreement.

It is a cornerstone of the EU’s negotiating position in the Brexit talks that nothing should be done which reintroduces a hard border between the two parts of the Irish island because that would jeopardise the peace agreement. The UK is also committed to maintaining the peace.

From this situation emerges the now notorious Irish backstop. What this means is that after the UK has notionally left the EU, for trade purposes, it will have to remain part of it until, in some unspecified way to be devised in the future, it becomes possible to have a soft border between what are legally two different trading entities.

Since the backstop stays in place indefinitely until a solution is found, the Brexiteers are naturally unhappy. Throughout the twilight zone of being neither in nor out, the UK would not be free to negotiate its own independent trade deals with non-EU member states.

Meanwhile, UK companies wishing to continue to sell goods and services to the 27 remaining states (far and away their largest market) would have to comply with all the existing regulations governing such dealings. Moreover, they would be bound to comply with any subsequent changes made to those regulations and procedures but now with the added disadvantage of having no voice in shaping them. Brexiteers say, not unreasonably, that this is not the Brexit the country voted for.

The Brexiteers want a finite date by which the backstop would lapse. The Remainers want a new vote on whether the UK should leave at all.

May has sought to negotiate a way forward which captures these conflicting objectives. She has been unable to do so because – quite frankly – it is not possible. Her leave deal has been voted down three times by the House of Commons because the circle cannot be squared.

Every consul general to whom I have spoken believes the UK is stronger as part of the EU, and the EU is stronger with the UK as a member. The arguments in favour of staying in and seeking to reform the organisation from the inside are, in their view, very powerful. As a graduate of the London School of Economics, I find the economic arguments compelling. But, clearly, the Brexiteers are not convinced. Taking a wider view, this is a very dangerous situation for the future of UK politics.

If May’s departure deal or any likely variant of it is finally agreed and implemented, it will be a disaster. But those who favoured leaving will always be able to blame the situation on the fact that they did not get a real Brexit. Paradoxically, those in favour of remaining will be able to say this is proof the UK should have stayed in. The argument will rumble for decades and never be resolved.

This is what has led me to the conclusion that attempts to forge a deal are doomed to fail and the new deadline of October 31 will not be met. There is a straight choice between a parliamentary vote to stay, endorsed by a confirmatory referendum, or just crashing out without a deal.

When I put this conclusion to one consul general, he said simply: “We in Europe worked this out two years ago. What surprised us was that the Britons, who are supposed to be the clever ones, still haven’t realised it.” Just so.

Mike Rowse is the CEO of Treloar Enterprises.