Aug 29, 2017 - arrangements. Ditch May immigration target? Soften on ECJ jurisdiction red-line. Bigger financial contrib
Cicero Brex-o-meter Updated: 29/08/17
Brexit Momentum Gauge Where is the UK’s position going? The UK has published a flurry of position papers setting out its preferences for the future relationship with the EU. The papers confirm our decision last month to move the needle into Tory Compromise territory. The cabinet appears to have agreed a common approach which softens some of the hard edges of the pre-election position. For example the paper on dispute resolution acknowledges that ECJ jurisprudence is likely to have a continuing influence on the UK, while a paper on Northern Ireland seeks to preserve a frictionless border. Labour has clarified its position substantively by saying it wants a single market transition (a softening), though their position on the final destination appears to be full exit. We move ‘Momentum’ towards softening for this reason. Whether Labour can outflank the Government on the transition in Parliament is an open question. Brexiteers fear that this is a Trojan Horse for reversal of the referendum, or a permanent halfway house. Negotiations with the EU continue on phase 1, with little evidence of major progress.
Progressive Soft Brexit Alliance
Tory Compromise
Single Market Transition. Considerably watered down Conservative red lines to achieve more generous/comprehensive settlement from EU in FTA. As close as you can get to Single Market whilst restricting FoM.
Tory compromise: Maximum transition – EUCU type arrangements. Ditch May immigration target? Soften on ECJ jurisdiction red-line. Bigger financial contribution to EU? Seems broadly consistent with vague Labour Manifesto.
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Conservative Manifesto
Single Market Membership
Position laid out in PM’s January ‘Lancaster House’ speech – No Single Market, no FoM, no ECJ, no EUCU, minimal payments to EU. Seek FTA and short transition.
Leave EU, join EEA. Requires UK u-turn on FoM (or change to EEA FoM rules). No FTA required.
No Deal
Remain in EU
WTO trade, 3rd country relationship. No transition?
Remain inside, possibly lose rebates and opt-outs? Cicero Gauge Made in the United Kingdom Calibrated to the Rowland Scale
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Where do they stand? UK positioning on Brexit in a nutshell (29/08/17)
Huge relief/ major upset
Would need UK u-turn on FoM
Labour’s position has moved this way
Softest
Soft
Squidgy
Single Market Membership
‘Progressive Alliance’
What: Leave EU, join EEA. Known as the Norway model.
What: Long single Market transition. UK waters down red line on FoM e.g. special status for EU workers. Stay in EUCU and recognise ECJ. Possible financial contributions to EU. As close to SM without membership.. Would require an FTA.
Stay in EU What: UK changes direction 180 degrees and is allowed to remain. Would possibly lose rebate and opt-outs as a condition of remaining in. How: Second referendum(!) overturns first. Major reversal in public opinion means UK loses nerve and remains inside EU. Chances increase if EU reforms FoM rules. President Macron has indicated he is open to this. Support: Lib Dems, if we’re honest. Business impact: Minimum status quo ante.
5% =
How: Economy falters, negotiations go badly, public opinion on Brexit sours. Another GE? SMM is seen a fix which gets UK out of a hole. Would require massive compromises on existing Manifestos. Support: SNP – though remaining is preferred. Business impact: Low in short term –UK loses ability to influence EU rules going forward – but damaging in long term.
10% =
Hindsight Corner… EU Referendum Voting Intention LEAVE: 51% REMAIN: 49% (Survation 15/07) Was Britain was right or wrong to vote to leave the EU? RIGHT: 45% WRONG: 43% DK: 12% (YouGov 18-19 July)
How: Labour try to create Cross-Party soft Brexit voting block with acquiescence from Corbyn. Could emerge if DUP agreement fails and/or another GE. Support: Much of the Labour Party – including Keir Starmer. Arch-Tory Remainers and Scottish Tories could back this position. Could Corbyn move this way to try to outflank May? Business impact: Med-low Open question as to whether special deal for City can be done with these concessions.
Source: Cicero research. This chart refers to UK domestic positions only. Percentages are our estimated probabilities of UK adopting this position based on current political situation.
25% =
Current position The Conservatives have abandoned preelection position
Firm
Tory compromise What: No Freedom of Movement. Maximum transition before FTA in force. EUCU like arrangements. ‘Best possible access to single market’. Fudge ECJ red line. Bin May’s hardline immigration target/policy. How: Compromise between wings of the Tory Party - no solid mandate for Manifesto position but Brexit must be delivered. Support: Cabinet , mainstream Brexiteers and many Remain Tories. Possibly DUP. Business impact: Medium – longer transition helpful. Still problematic for services sector.
35%
The Manifesto position has been ditched in favour of a more gradual Brexit
Hard
Conservative Manifesto What: May’s Lancaster House speech: end Freedom of Movement, leave Single Market, end ECJ jurisdiction, EU budget contributions possible but small, leave EUCU. Maximum security and defence co-operation. Seek comprehensive FTA and short transition agreement. How: Tory Party cleaves to Manifesto to avoid division and another election. Support: Theresa May and former advisers, purist Brexiteers. Likely DUP. Business impact: High but predictable. Transition would smooth process.
Hardest
No Deal What: Disorderly exit – UK a third country, trades under WTO rules. How: Walk away - ‘no deal better than bad deal’ or timeout on negotiations (no extension from EU27). Support: Hardcore Brexiteers would move toward this position if exit bill is high. Business Impact: Nightmare.
20% = Find out more Trusted Brexit advice and analysis for leading organisations. www.cicero-group.com
5% No, the probabilities are just a bit of fun. What’s your view?
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The Numbers Game Updated: 03/07/2017 N.B. Excludes 7 Sinn Fein, Speaker and 3 Deputies
16/06/17 starting position
Parliamentary Analysis Who has the numbers to carry the day in the current Parliament? With the Conservatives now a minority, Parliament is finely balanced. Some argue that this moves the UK towards a softer Brexit because the Government will be forced to compromise in order to pass its Brexit legislation. It is true that Theresa May will need near total obedience from her own party as well as the votes of the 10 DUP MPs to get the Great Repeal Bill through the Commons without ceding ground to those wanting a softer Brexit. Whatever the private views of MPs on Brexit, it is how they vote that matters. When push comes to shove, will proEuropean Tory MPs follow the whip? And how will Labour MPs vote, given their vague position on Brexit and the antipathy of Jeremy Corbyn towards Brussels? We don’t know yet how MPs will behave, so we will assume Tory obedience to the whip as a starting point and that Labour will routinely oppose the Government’s position in votes. As voting data comes through we will update our analysis on this page to see if a ‘Softer Brexit’ majority emerges which will force the Government to compromise.
Hard Brexit voting block TOTAL
Chuka Amendment (29/06)
326
322
316
313
Labour
0
0
SNP
0
0
DUP
10
9
Liberal Democrats
0
0
Plaid Cymru
0
0
Others
0
0
313
101
0
0
Conservative (excludes speaker and one deputy)
Softer Brexit voting block TOTAL Conservative Labour
260
49
SNP
35
34
DUP
0
0
12
12
4
4
2
2
(excludes two deputy speakers)
Liberal Democrats Plaid Cymru Others (excludes 7 Sinn Fein)
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Future vote 2
Future vote 3
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Chuka Ummuna, a Labour backbencher, tabled an amendment to the Queen’s Speech. It called for the UK to join the Single Market. The Government whip held strongly with no rebellion this time. However, elsewhere the Government gave ground on Stella Creasy’s amendment promising to fund abortions for Northern Irish women in England rather than face defeat.
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Around one fifth of Labour MPs (mostly from London) defied the Party Whip by supporting the Single Market amendment. The whip ordered MPs to abstain. Jeremy Corbyn fired three frontbenchers and one resigned as a result. The other opposition parties backed Umunna. Corbyn, whose antipathy to Europe is long-standing, may struggle to contain differences on Europe.
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