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Brexit crunch week: here’s what’s happening and why

The deal disentangles decades of interwoven EU and UK law, accounts for tens of billions of pounds the UK owes the EU for continuing obligations, and ensures a smooth transition so business and industry can avoid a disruptive and costly “cliff edge” Brexit.

It also includes a controversial “backstop” to keep the Irish border free of checkpoints by keeping the UK subject to EU customs union rules until a new trade agreement or other arrangements can replace it.

But in January, it was defeated by 432 votes to 202. Pro-Brexit Conservative MPs allied with Labour to deliver one of the biggest losses for a British government in political history. This was the first so-called Meaningful Vote on Brexit.

May promised to get legally binding changes to the deal, to satisfy at least some of the objections of pro-Brexit MPs. And late Monday night, she won crucial improvements to the Brexit divorce deal from the EU.

The Second Meaningful Vote and its defeat.

May had new last-minute concessions from the EU to woo Brexiters (and the all-important northern Irish DUP), specifically on the contentious Irish backstop. But they did not satisfactorily address MPs’ concerns. Some Conservative MPs, and Labour, opposed the deal for the same reasons they did the first time.

The vote was lost, 391 “noes” to 242 “ayes”.

The No Deal Vote and its defeat.

With the Meaningful Vote lost, May had promised Parliament a vote on leaving the EU without a Withdrawal Agreement – the so-called “no deal” Brexit.

Parliament has already voted against a “no deal” Brexit in a non-binding amendment to a previous motion. It did so again. But this vote has no legal effect. It just expresses Parliament’s will for the next step – and focuses minds on the consequences.

So Parliament doesn’t want a “no deal” Brexit. What next?

In her own words: PM Theresa May explains what’s next

The Delay Vote. Still to happen.

On Thursday there will be a vote on an extension to the Brexit date of March 29.

Downing Street believes that if Parliament votes down “no deal” then it will, logically, agree to an extension. But politics doesn’t always follow a logical path.

If the extension is voted down, Brexit will still be set to happen on March 29, regardless of the vote the day before. And, unless something else happens, that would be a “no deal” Brexit.

But it gets more complicated. May has indicated she might try one more time to get her deal passed. If she does, and it passes, the government will seek a short “technical” extension to the end of June. If not, it’s likely a longer extension will be necessary.

At the time of writing, that’s what will be voted on. But as it’s an “amendable motion”, and the government has proven unable to keep its motions intact, its entirely possible Parliament might end up deciding something else.

Or one of the wild cards might be played – see below.

What would a “no-deal” Brexit mean?

The UK government’s 12-page No Deal assessment paper sketches the consequences of a no-deal Brexit. It reveals that a third of the government’s “most critical” no-deal preparations are not on track (it didn’t say which ones). This includes many trade agreements between the EU and third countries, including major trading partners such as Japan and Turkey, which have not yet been rolled over into UK-specific deals.

The report finds there is “little evidence that businesses are preparing in earnest for a no-deal scenario”, with small and medium businesses particularly unready.

For example, just 40,000 out of an estimated 240,000 importing businesses have registered for a trading ID system that will allow them to import goods from the EU after a no-deal Brexit.

The government estimates a GFC-level 9 per cent hit to the UK economy after 15 years from a no deal Brexit, not including short term disruptions “which would be likely to have additional short and long-run economic impacts”.

Almost a third of the UK’s food supply comes from the EU. Some food prices are likely to increase and there is a particular risk of shortages of fresh fruit and vegetables.

The UK’s agricultural industry would be particularly hurt, as the EU would immediately apply tariffs of 70 per cent on beef and 45 per cent on lamb imports (more than 90 per cent of Welsh lamb exports go to the EU). And the UK automotive industry would suffer a painful, possibly existential blow.

Britain's Prime Minister Theresa May is inching closer to an ominous Brexit deadline without a deal with the EU.

Britain’s Prime Minister Theresa May is inching closer to an ominous Brexit deadline without a deal with the EU. Credit:PA

What happens if the Brexit date is extended?

The UK must win the agreement of all 27 EU member nations to delay the Brexit date.

That might be tricky. Many are fed up with the Brexit distraction from urgent issues such as migration, re-emerging nationalist dissent, a stumbling economy and the upcoming EU Parliament elections.

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Rather than just stretching out the deadlock, the EU might demand a new referendum to assess support for the Withdrawal Agreement and its alternatives.

French President Emmanuel Macron, for example, has said he would veto any delay to Brexit without a “clear objective” based on a “new choice” by the British.

Any extension beyond mid-2019 hits another problem: the EU Parliament elections in May. If the UK is still in the EU, this could prove a legal and political minefield.

Wild card one: a second referendum

What Will Jeremy Do? Labour has said its biggest priority is to get into government and negotiate a softer alternative to what it has dubbed the “Tory Brexit”.

Labour leader Jeremy Corbyn only reluctantly and recently announced that Labour is also now behind the idea of another Brexit referendum – an option his party members enthusiastically endorsed last year.

But it is unclear when Labour would actually vote for one – and it doesn’t stand a chance until they do. Shadow chancellor John McDonnell said Labour would “use this week to kill off no deal”. After that they would seek “a realistic deal or going back to the people [for a second referendum]”. He was vague on the timeline.

It is also unclear if there is enough support in Parliament to get a second referendum across the line even then. Only a few Conservative MPs want one, and some Labour MPs would likely defy their leader to oppose it.

A second referendum would take months to organise and require a delay to Brexit.

Wild card two: a general election

The government’s support in Parliament already hangs on a knife edge. A looming chaotic Brexit could cause it to lose the confidence of the House of Commons: the cue for a general election, with or without a delay to the Brexit date.

Or the government might use parliament to call an election to rally voters behind the prime minister and her Brexit plan.

Theresa May is immune from an internal party challenge until the end of the year (because she faced down a challenge in December) but she might still quit, deciding she doesn’t want to be the “no deal” Brexit PM, or persuaded by colleagues to go of her own accord.

If so, her party could end up in hardline-Brexit hands – this, too, could trigger an election if the DUP, who have a deal with May’s minority government, withdraw their support. Or it might mean a delay and fresh negotiations in Brussels.

Nick Miller is Europe correspondent for The Sydney Morning Herald and The Age

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