Britain heading for softest Brexit or a last minute no deal crunch

It was during this week’s vote in the House of Commons on the EEA, the European Economic Area, that I briefly lost the will to live. There were several rebellions underway, with Labour MPs resigning from the party’s front-bench, and many more voting against the leadership line. Then there were the Tories, with chief whip Julian Smith bravely trying to hold his side together amid the efforts of anti-Brexit Tory rebel MPs blind drunk on their power and excited that they were in the process of binding the government’s hands and scuppering Brexit. The parliamentary ding dong, and ping pong between the House of Lords and the House of Commons, reached new heights of intensity.

Reporters on television intoned gravely about the crisis as MPs voted on amendment after amendment. The EEA vote, and the Meaningful Vote vote, was clearly important and significant. But who was rebelling on what and why? I no longer knew. In my confusion I wished to go to a place beyond Brexit, before I snapped back and began trying to work out what had really happened.

If we in Britain are deeply confused by ongoing events at Westminster as MPs battle over Brexit, imagine what the European Union (which has problems of its own in Italy and Germany, and Poland, and Hungary) is making of this British rerun of Fawlty Towers. Brexit has become the parliamentary equivalent of a missing thirteenth episode of Fawlty Towers in which Basil and Sybil are on holiday in Brussels and trying to check out of their hotel. They find the bill is huge and an argument breaks out. Cue hilarious scenes , or maybe not.

In similar style, the UK is having some trouble checking out of the European Union. Anyone who tries to tell you that they know definitively how it will be done next year has a time machine or is a blowhard. All I can do is suggest where things appear to be headed on what has been a potentially defining week in the Brexit saga. If you like Brexit – and I do, what with really wanting to get out of the EU – it does not look like good news.

If you are anti-Brexit, or in favour of the softest departure, this may turn out to be the week where it became clear that you are on track to get a lot of what you want. It is an open question what the response will be from Leave voters when they work out what this means. That is a different matter, and I’ll return to the implications shortly.

First, why do I say Parliament is putting Brexit on the path to an ultra-soft Brexit? By following the logic of how the crisis in parliament is likely to be interpreted by the European Commission and the European Union.

The attempt to box in the government by Tory rebels failed, this time. In essence, what they sought was to ensure that if the Commons does not like whatever deal is patched together late this year, then parliament could direct ministers to go back to the table to try again. This turns the traditional process by which ministers with the aid of officials negotiate treaties. The rebels will have another go in the coming days, having been stiffed as they see it by the Prime Minister when she said their concerns would be taken into account. The rebels might win, or they might be full of hot air. We’ll see…

Do keep up, please.

But the outcome of the meaningful vote controversy is almost irrelevant now. There is only one lesson that the EU can reasonably draw from the British shambles. The UK government has no parliamentary flexibility or clout to construct a coherent offer or opening gambit, even if its ministers could agree what that might look like. It might have the votes one week, and then not the next. The government cannot agree with itself.

That being the case, the EU has no incentive – none, zero – to offer anything. What the European Commission wants for Britain has always been quite clear, because it does not want a free trading rival, if smaller, centre on its doorstep.

The ideal for the EU is the UK bound within a customs union, and then bound completely inside the single market’s rules and paying an annual fee for the privilege. The aim of British policy should have been to prevent the sixth largest economy in the world landing up in this ludicrous position, but there you go.

Knowing all this, the EU looks set to give absolutely nothing in June. And nothing in October, before building up to a last minute, early hours offer of a “deal” in December or later.

How will voters react when they work all this out? When with a flourish the EU says late this year or early next year the following: “That will be £40bn to leave, a transition, but only to a customs union, and full compliance with the single market (the City included) and that means free movement too, and £5bn per year for access and EU programmes.”

Forget any fantasies of the EU letting parliament then dictate some bespoke fudge. The choice will be the EU’s offer, or no deal.

The ultra-Brexit view is that the watching public will explode at that point, perhaps early next year. They might, but sometimes the fatalistic Brits just shrug.

Or they might as taxpayers become very angry indeed when it crystallises. It would be astonishing if activists and wealthy donors are not now preparing an extra-parliamentary campaign to “respect the referendum” now the UK, hedged in by the Commons numbers, is heading for a Brexit softer than that vintage Andrex advert with the cute dog.

Of course, if the public gets angry the UK could walk out, in theory. In practice – in an act of stunning incompetence or by design – Britain has made hardly any serious preparation for a “walk away” outcome. A dynamite report by the Institute for Government published this week was devastating in its conclusions. Whitehall secrecy, and what one cabinet minister calls “anti-Brexit sand in the machine,” have combined to ensure a disgraceful lack of readiness. Lord Bridges, the former Brexit minister, warned about this a year and more ago and was not listened to.

To change this situation, it would take a new Prime Minister capable of making decisions, putting government on an emergency footing this summer and autumn. The Tories kick around this prospect in private but seem not to have the appetite for action, yet. So, May survives and the EU knowing “no deal” is not a realistic proposition for the UK gets ready to set the terms. The EU has the whip hand. Well done everyone.