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The U.K. government lost two significant votes this week, as Parliament rejected Prime Minister Theresa May’s withdrawal agreement and ruled out a no-deal Brexit. They also rejected some alternative proposals for resolving the crisis.

The big picture: The problem is that members of Parliament fall into four main groups on the Brexit issues, and none commands a majority.

Leaving the EU under May’s current agreement

A “softer” departure that retains the closest possible trading links with the EU, minimizing damage to Britain’s economy (including the “Norway-plus” and “Common Market 2.0” plans)

Remaining within the EU, especially if that’s the outcome supported by a new referendum (a small minority would simply revoke Britain’s application to leave the EU without putting a vote to the public)

Between the lines: A coalition of groups 3 and 4 could triumph, as a majority of MPs would prefer the kind of customs union or single market–style relationship the U.K. currently enjoys.

Group 4 MPs, however, consider a “soft” Brexit ridiculous: It would leave the U.K. bound by EU rules but with no say in them.

What’s happening: Before March 29, May will have one or two more attempts to revive her withdrawal agreement, which has twice been voted down by large majorities. She hopes that the no-deal brigade will crack, convinced that leaving Europe trumps all other causes.

If an extended deadline is sought, the pressure would shift to groups 3 and 4, but it’s far from clear they can agree on the fundamental choice: whether to uphold or challenge the sanctity of the 2016 referendum result.

There is a narrow chance May could untie the knot herself, perhaps through a proposal from two Labour MPs to subject the withdrawal agreement to a “confirmatory vote”: If approved by the electorate, it would come into effect, perhaps one month after the public vote. If rejected, it would keep the U.K. in the EU.

What to watch: It’s still unclear if the EU will grant an extension — and, if it does, for how long and on what terms. And a second referendum would take months to organize, raising questions around whether the U.K. would participate in European Parliamentary elections later this year.

Be smart: Whatever fate Brexit meets, Britain’s reputation for competent, pragmatic political stability — built up over centuries — is being trashed. It will take years, perhaps decades, to restore.

Peter Kellner is a visiting scholar at Carnegie Europe.

Fate of Brexit still muddled after latest round of votes in Parliament

It's unclear if the EU will grant the extension Parliament voted to seek.

British Prime Minster Theresa May attends a press conference at the European Commission

Theresa May at a press conference at the European Commission. Photo: Thomas Niedermueller/Getty Images

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Brexit

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The U.K. government lost two significant votes this week, as Parliament rejected Prime Minister Theresa May’s withdrawal agreement and ruled out a no-deal Brexit. They also rejected some alternative proposals for resolving the crisis.The big picture: The problem is that members of Parliament fall into four main groups on the Brexit issues, and none commands a majority.

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

The U.K. Parliament has rejected the government’s Brexit plans, in a sweeping 432–202 vote. The development plunges U.K. politics into crisis: While there’s a clear majority against the government’s plans, there’s no evident majority in favor of a specific alternative.

Why it matters: If Parliament cannot agree on what to do next, the U.K. will by default crash out of the EU without a deal. This could do immense damage to the U.K.'s economy, potentially taking as much as a 10.7% hit to the country’s GDP.

Background: For the past 2 years, the U.K. has been negotiating an agreement on the terms of its EU departure, set for March 29 — just 10 weeks from now. Prime Minister Theresa May hoped that a majority of MPs would support her agreement so that Brexit could proceed in an orderly manner, but those hopes have now been dashed.

The government has been defeated by a coalition of opposites: around 120 MPs who want a more clear-cut, “hard” Brexit, and believe that May has compromised too much; and over 300 MPs who think Brexit is a mistake.

The margin of the government’s defeat — far greater than any previous U.K. government's on a major policy — also raises questions about May’s future. In the short term, she should survive. 

A vote of no confidence in the government — proposed by Labour’s leader, Jeremy Corbyn — will be debated on Wednesday, but it’s almost certain to be defeated. The one thing all Conservatives agree on is that they don’t want the general election that a successful vote would entail.

But in the weeks and months ahead, May’s survival is far less certain.

What’s next: May will return to Parliament next Monday, setting out her plans in the wake of her heavy defeat. She has said that “no deal is better than a bad deal.” It remains to be seen whether she will hold her ground, which would appease the 120 hard-Brexit MPs, or pivot to a softer Brexit to build a cross-party consensus.

What to watch: Whatever May does, Parliament may decide to seize control of the process and assemble a different majority — potentially one that agrees to hold a fresh referendum. The possibility that the U.K. will end up remaining in the EU can no longer be dismissed.

Failed deal spells uncertainty for Brexit and May's long-term survival

Parliament might seize control of the process and hold a fresh vote.

Political artist Kaya Mar stands with his painting depicting Prime Minister Theresa May playing a violin outside Millbank Studios in Westminster on January 16, 2019 in London, England. 

Political artist Kaya Mar with his painting in London, England. Photo: Jack Taylor via Getty Images

Business

The U.K. Parliament has rejected the government’s Brexit plans, in a sweeping 432–202 vote. The development plunges U.K. politics into crisis: While there’s a clear majority against the government’s plans, there’s no evident majority in favor of a specific alternative.Why it matters: If Parliament cannot agree on what to do next, the U.K. will by default crash out of the EU without a deal. This could do immense damage to the U.K.&#x27;s economy, potentially taking as much as <a class="gtmContentClick" data-vars-link-text="a 10.7% hit to the country’s GDP" data-vars-click-url="https://www.bloomberg.com/news/articles/2018-11-28/u-k-gdp-would-suffer-10-7-hit-in-worst-case-no-deal-brexit" data-vars-content-id="685f07f2-364f-43c1-87eb-2280eef3b565" data-vars-headline="Failed deal spells uncertainty for Brexit and May&#x27;s long-term survival" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bloomberg.com/news/articles/2018-11-28/u-k-gdp-would-suffer-10-7-hit-in-worst-case-no-deal-brexit" target="_blank">a 10.7% hit to the country’s GDP</a>.

Wednesday’s summit of European leaders, which followed another meeting last month, failed to produce a breakthrough in the Brexit talks. If the negotiations fall apart, it could precipitate a major crisis for Britain’s government and Parliament.

The big picture: If the March 29, 2019, withdrawal date comes without an agreement on the day-to-day U.K.–EU relationship, MPs would urgently seek a way to resolve the crisis. All potential solutions are likely to involve a U.K. request to delay withdrawal, with a new referendum being the most likely outcome.

Delaying the withdrawal is allowed under Article 50 of the Lisbon Treaty. However, it would need the unanimous consent of the other 27 members of the EU. Beyond this commonality, there are various ways in which events could unfold:

Continued talks. This would meet resistance in both London and Brussels: If no agreement has been made in the past two years, why should we expect one in a few months?

Theresa May’s resignation. Whether the prime minister resigns or gets deposed, her replacement could seek to re-open talks with the EU and ask for more time. But Conservative MPs might be reluctant to depose May: There is no consensus about who should replace her, and her successor would face the same intractable problems.

A new general election. There has been some speculation that May might call a snap election, and seek a mandate to go back to Brussels to break the deadlock. However, a general election might lead to a Labour government (or Labour-led coalition), a possibility that terrifies virtually all non-Labour MPs. The chances of MPs’ voting for an election that might produce this outcome are negligible, but May could propose it as a way of frightening her party into line.

A new referendum. A “People’s Vote” march is taking place in London this weekend in what is likely to be the largest demonstration since the march against the Iraq war 15 years ago. There’s a growing sense that a referendum could be the best way to resolve Britain’s greatest peacetime crisis in living memory. May opposes the idea, but could have little choice if engulfed by crisis.

The bottom line: A referendum would likely generate a majority vote to remain in the EU: The UK’s demographics are moving in a pro-EU direction, and some voters have changed their minds. Faced with the prospect of a no-deal Brexit and its economic harm, more voters may opt for the safety of the status quo. But, as in 2016, the outcome would be far from certain.

What could happen if the Brexit negotiations break down

A new referendum is one possible outcome.

British Prime Minister Theresa May finishes speaking to the media as she arrives for the October summit of European Union leaders on October 18, 2018.

British Prime Minister Theresa May finishes speaking to the media at the October summit of European Union leaders on October 18, 2018, in Brussels, Belgium. Photo: Sean Gallup via Getty Images

Wednesday’s summit of European leaders, which followed another meeting last month, failed to produce a breakthrough in the Brexit talks. If the negotiations fall apart, it could precipitate a major crisis for Britain’s government and Parliament.The big picture: If the March 29, 2019, withdrawal date comes without an agreement on the day-to-day U.K.–EU relationship, MPs would urgently seek a way to resolve the crisis. All potential solutions are likely to involve a U.K. request to delay withdrawal, with a new referendum being the most likely outcome.

European leaders on Friday made enough progress in negotiations about the U.K.’s long-term relationship with the EU to move forward in the Brexit process.

Yes, but: That doesn’t mean the U.K. is set for a smooth withdrawal next spring. To get this far, the U.K. has had to make big concessions that have upset pro-Brexiteers, namely on the rights of EU citizens coming to Britain, the rights of U.K. fishing fleets in U.K. waters and the role of the European Court of Justice. The U.K. has also ceded ground on the transitional arrangements for the 20 months after Brexit.

More important, recent talks have done nothing to break the deadlock over the future of the U.K.’s only land border with the rest of the EU, in Ireland. All parties say they want to keep the open border, which has been crucial to the 20-year peace in Northern Ireland since the 1998 Good Friday Agreement.

But to avoid a hard border, with border posts and passport and customs checks, either Northern Ireland or the whole of the U.K. would have to remain in the EU’s Customs Union. The U.K., however, has ruled out both solutions, in a standoff that could capsize negotiations.

And the border is just one of myriad issues — spanning trade, financial regulations, worker restrictions and the European Court of Justice's jurisdiction — that have yet to be addressed. To buy time, Prime Minister May could ask to extend the withdrawal date, but she would face a huge revolt from her party. She’s more likely to propose a fudged deal, in which issues such as the Irish border are left to be resolved during the post-Brexit transition.

The bottom line: It’s unlikely that the U.K. and European Parliaments, as well as those of the 27 remaining EU member states, will continue to accept May’s procrastination. Negotiations have progressed thus far by kicking key issues down the road, but the road is fast running out.

Brexit deadline adds pressure to U.K.–EU talks

Negotiations keep kicking key issues down the road, but the road is fast running out.

Theresa May, Angela Merkel and Emmanuel Macron following a meeting on the sidelines of the European Union leaders summit in Brussels

Theresa May, Angela Merkel and Emmanuel Macron following a meeting at the European Union leaders summit in Brussels, on March 22, 2018. Photo: Ludovic Marin/AFP via Getty Images

European leaders on Friday made enough progress in negotiations about the U.K.’s long-term relationship with the EU to move forward in the Brexit process.Yes, but: That doesn’t mean the U.K. is set for a smooth withdrawal next spring. To get this far, the U.K. has had to make big concessions that have upset pro-Brexiteers, namely on the rights of EU citizens coming to Britain, the rights of U.K. fishing fleets in U.K. waters and the role of the European Court of Justice. The U.K. has also ceded ground on the transitional arrangements for the 20 months after Brexit.

Faced with almost certain rejection, U.K. Prime Minister Theresa May delayed a parliamentary vote on Monday on her plans for leaving the EU. To win over MPs, she is now seeking to amend the deal, in particular the complex arrangements concerning the future of the border between the U.K. and Ireland — the only land border between the U.K. and the rest of the EU.

The big picture: EU leaders have made clear that the 585-page withdrawal agreement cannot be changed. All May can expect is a side letter containing a legally meaningless “clarification,” which will satisfy very few, if any, MPs in London. Whenever she calls the vote,  she is likely to face a heavy parliamentary defeat.

Background: The U.K. Parliament voted to leave the EU on March 29, 2019. Without a deal, the prospects for the U.K.’s — and, to some extent, the EU’s — economy will darken. The government’s own projection is that a “no deal” Brexit could provoke an economic slump of 10%.

A whole range  of connections, developed over almost half a century, will be severed. Trade will be disrupted. Cooperation on fighting crime and terrorism (depending on shared databases) will be weakened. The U.K. will find it harder to obtain vital medicines. The future  of U.K. citizens living in the EU, and EU citizens in the U.K., will be thrown into question. 

What's next: The pressure to prevent a “no deal” Brexit will be intense. There are several possible paths:

May might quit and be succeeded by a new prime minister who reopens talks with the EU.

The government might fall, triggering a fresh general election. This looks unlikely at present, as there is no majority in Parliament to bring down the government, which could clear the way for the left-wing Labour party led by Jeremy Corbyn to take power.

Parliament might vote for a new referendum to ask voters whether they really want to leave the EU after all. Support for a “People’s Vote” is rising at Westminster as the least bad way out of the present crisis.

The bottom line: None of the three options can realistically be concluded by March 29. The U.K. looks certain to remain in the EU at least into the summer — and, very possibly, indefinitely.

Delayed Brexit vote forestalls near certain defeat for May's plan

It's unlikely any alternatives could be finalized before the March 29 deadline.

U.K. Prime Minister Theresa May outside Downing Street. Photo by Ben Stansall/AFP/Getty Images

Faced with almost certain rejection, U.K. Prime Minister Theresa May <a class="gtmContentClick" data-vars-link-text="delayed a parliamentary vote" data-vars-click-url="https://www.axios.com/theresa-may-brexit-vote-retreat-parliament-eu-c2c8fba9-aeca-49b2-9a2d-962ccb0ae720.html" data-vars-content-id="eb1a2811-a809-469d-ab6a-a60616cce576" data-vars-headline="Delayed Brexit vote forestalls near certain defeat for May&#x27;s plan" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/theresa-may-brexit-vote-retreat-parliament-eu-c2c8fba9-aeca-49b2-9a2d-962ccb0ae720.html" target="_self">delayed a parliamentary vote</a> on Monday on her plans for leaving the EU. To win over MPs, she is now seeking to amend the deal, in particular the complex arrangements concerning the future of the border between the U.K. and Ireland — the only land border between the U.K. and the rest of the EU.The big picture: EU leaders have <a class="gtmContentClick" data-vars-link-text="made clear" data-vars-click-url="https://www.bbc.co.uk/news/uk-politics-46515743" data-vars-content-id="eb1a2811-a809-469d-ab6a-a60616cce576" data-vars-headline="Delayed Brexit vote forestalls near certain defeat for May&#x27;s plan" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bbc.co.uk/news/uk-politics-46515743" target="_blank">made clear</a> that the 585-page withdrawal agreement cannot be changed. All May can expect is a side letter containing a legally meaningless “clarification,” which will satisfy very few, if any, MPs in London. Whenever she calls the vote, she is likely to face a heavy parliamentary defeat.

Peter Kellner

Stories

Fate of Brexit still muddled after latest round of votes in Parliament

Failed deal spells uncertainty for Brexit and May's long-term survival

Delayed Brexit vote forestalls near certain defeat for May's plan

What could happen if the Brexit negotiations break down

Brexit deadline adds pressure to U.K.–EU talks