Is momentum shifting towards Brexit reversal?

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Theresa May’s government is battling on two fronts as it edges Britain towards Brexit: with the European Union on one side and a swarm of domestic opponents on the other.

On Thursday, a fresh fight in the government’s drive to prepare for exit by 2019 began as the House of Commons debates legislation that would break the country’s political, financial and legal ties with the European Union – by essentially copying and pasting EU law into UK law.

British Prime Minister Theresa May, pictured on September 6, 2017, is facing opposition from within her own Conservative Party over the government's Brexit plans. /AFP Photo

May faces opposition from her own party - some want Brexit to be harder, others don’t want it at all - and from adversaries across the political spectrum.

The principle opposition, Labour, has shifted its position to back continued membership of the single market and customs union for a period post-Brexit – next Monday it will oppose the repeal legislation – in part because it will allow the government to change laws without parliamentary scrutiny and hope to persuade pro-EU Conservative MPs to follow its example.

And this could be a significant bump in the road for the government’s plans. Labour will likely struggle to bring down the bill, but the growing coordination of the opposition signals more difficulties ahead for the government when the legislation is opened to amendments.

Britain’s negotiations with the EU continue, but the country’s government is facing growing opposition to its plans from UK parties. /AFP Photo‍

Momentum towards Brexit has spluttered as the realities of negotiating withdrawal have set in. Leading proponents of Britain’s exit have quietly dropped their claims that untangling 40 years of EU law and negotiating an amicable exit with 27 other countries would be easy – Foreign Secretary Boris Johnson’s “have our cake and eat it” approach has been shelved.

Conservative Party grandee Michael Heseltine argued that Brexit would not happen in an interview on September 6, 2017. /AFP Photo

On Wednesday, Conservative Party grandee Michael Heseltine told Reuters that Britain could still reverse its impending exit from the EU.

“There is now a possibility that Brexit will not happen, but it will need a change in public opinion,” the man credited with “wielding the knife” that ended Margaret Thatcher's premiership in 1990 said.

Heseltine argued that with Labour’s shift in policy, new hope has arisen for a second referendum – something former prime ministers John Major and Tony Blair have suggested is a viable option.

Britain's then Prime Minister John Major (L) walks with opposition leader Tony Blair (R) on October 23, 1996, followed by Deputy Prime Minister Michael Heseltine (C). /AFP Photo

But public opinion has not significantly shifted. If it is to do so, the old maxim “it’s the economy, stupid” will likely drive the change in attitudes.

The leader of the Scottish Conservatives Ruth Davidson – often seen as a potential replacement for Theresa May – told the New Statesman this week: “My real fear is that if there’s a short-term economic hit, we don’t bounce back from it.”

To the surprise of analysts, Britain’s economy remained strong in the aftermath of the Brexit vote in June 2016 as the value of the pound plummeted. But growth slowed to 0.3 percent in the second quarter - half that of the eurozone - and the cost of living is rising, with inflation outpacing earnings.

Chancellor Philip Hammond, who backs a soft Brexit, saw Britain's economy slow in the second quarter. /AFP Photo

In August, the monthly industrial surveys also indicated a fall in momentum. The Purchasing Managers' Index for the services sector showed growth at its weakest in almost a year, and services make up 80 percent of the UK economy.

If the cost of living continues to rise and the economy hits real trouble, perhaps public opinion would shift against Brexit. But in a reflection of the deep-seated feeling many in Britain have over EU membership, a YouGov survey in August showed that 61 percent of those who voted to leave would be willing to accept “significant damage to the British economy” to get out of the bloc.

Reversal of Brexit would likely require a second referendum, which would probably only happen after another general election. /AFP Photo

Furthermore, another election would probably be needed to force a second referendum. And an election would mean a new leader of the Conservatives. And the now notorious “Article 50” that started a two-year clock on Britain’s exit on March 29, 2017 would have to be revoked – legal experts differ as to whether this is even possible.

Trade deal potential

The likelihood remains that Britain will leave the European Union, probably with a long transitional period in the single market and customs union to blunt the sharp shock of departure.

Britain is eager to strike trade deals with countries such as China and the United States soon after departure – a matter that would be complicated by remaining in the customs union, a mechanism that enforces tariff free trade within the union but requires all members to impose a common tariff on goods from outside.

Britain has prioritized striking trade deals with major economies like China quickly after Brexit. /Xinhua Photo

In a position paper released in mid-August, Britain said it will seek a “close association” with the bloc’s customs union after it leaves in March 2019, allowing it to negotiate trade deals with other countries. A Britain that retains close ties to the EU would make it particularly attractive as a trade partner.

MPs will vote next Monday as to whether to push the repeal bill to the amendment stage, a small but significant step in the Brexit process: it could signal a turning of the tide towards a closer UK-EU future relationship.

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