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Is a 2nd Brexit Referendum Likely?

There comes a time when one begins to feel sorry for Theresa May. After her public humiliation in Salzburg where EU leaders rejected her “Chequers Plan” for the post-Brexit relationship, it is now even clearer the British Prime Minister is facing the impossible task of appeasing pretty much everyone: her divided cabinet, her divided party, a divided electorate, and a powerful Labour opposition are united in the goal of removing her from power. The Conservative party, which May leads, is itself in deep division and disagreement over the Brexit issue and Chequers. Hard Brexiteers led by Jacob Rees Mogg — May’s potential successor as party leader — won’t give the PM a break until she forces through the hard Brexit they desire: an almost complete severance of ties. They want to take back control, whatever that means. But moderates within her party won’t accept the disastrous economic consequences such a move would bring. And finally, Brussels won’t accept the deal altogether with Donald Tusk, giving the PM an October deadline to rethink her position.

Even if May does manage to clinch a deal with Brussels, it seems unlikely she will find the necessary votes in Parliament to ratify it. All this has triggered talks of a snap general election, or more exciting still, a second Brexit referendum.

It was only months ago that Mrs. May did not seem so clueless about her country’s economy, and indeed her own political future: her cabinet unveiled the so-called “Chequers Plan” detailing its vision for Britain’s future relationship with the European Union in a three-page document. As optimistic as May was in securing its backing, the plan was arguably doomed from its very conception. This was made evidently clear when three of her cabinet ministers — including Foreign Secretary Boris Johnson — quit in the wake of the proposal. Johnson went as far as labeling Chequers “a suicide vest wrapped around the British Constitution.”

For Brexiteers like Johnson, the deal is too soft on Brexit, giving away many concessions to the EU and failing to respect the referendum slogan of “take back control.” In a concession to moderates within her party and an anxious business community pushing for a soft Brexit, May proposed a “common rulebook” for trade in manufacturing and agricultural goods — which essentially means the continuation of free trade without disruptive barriers and tariffs, under EU rules.

Even more controversial from a Brexiteer’s perspective is the issue of enforcement and jurisdiction over trade: although a joint-institutional framework would be set up to interpret disputes, the document calls for UK courts to pay “due regard” to EU law in areas where the rulebook would apply. In practice, this means that the European Court of Justice would be the final authority in rule-making and interpretation. Instead of taking back control, the UK has succumbed to the position of following EU rules on goods without the benefit of contributing to rule-making that membership brings. Perhaps fearing backlash from the right, May decided not to extend the rulebook to services, conceding that this would mean less market access to EU services while framing the decision as necessary to benefit from “regulatory flexibility” in the service sector. This could be particularly contentious considering Britain’s economy is 60% service-based. The financial sector of London will particularly dislike this.

Immigration always seemed like an issue leaving no room for compromise from the British perspective. And on this May has delivered the demands at home, at least on the face of it. Her government promised to end free movement into the UK, while allowing a “mobility framework” for European tourists and students — another inevitable contradiction arising from the political need to compromise between a soft and hard Brexit, but still not as contradictory as her hope to retain free-trade with Europe while curbing free movement and leaving the customs union.

It should not come as a surprise to May that her deal got rejected. Brussels’ longstanding policy has been the indivisibility of its fundamental four freedoms: freedom of movement of goods, labour, capital, and people. Accepting the Chequers Plan, which essentially allows the UK to cherry pick elements of the Four Freedoms, while ignoring others — would seriously undermine the central dogma of EU policy. From a European perspective this is – and always has been – unacceptable. Nations within the EU that are highly critical of Brussels could seize the opportunity to take advantage and follow in the UK’s footsteps: free to benefit from trading freely with Europe while appeasing the strong anti-immigrant sentiments at home. At a moment of historical instability within the bloc, this red line from Brussels is perfectly justified, expected and understandable.

Facing pressure and criticism from all sides of the political spectrum at home, May must also abide by her own red lines, further complicating the possibility for a deal. The customs issue, closely linked with the “Irish border” problem is the most significant contributor to a deadlock in negotiations. After Brexit, the border between Northern Ireland (which is part of the UK) and Ireland (which is part of the EU) will officially become the only land border between the UK and the EU. All parties want to avoid the re-establishment of a “hard border” on the island along with all the necessary customs checks and frictions in travel and trade — which could risk jeopardizing a delicate peace process which ended decades of bloody conflict between the protestant North and Catholic South.

But how to reconcile the UK’s wish to leave the Single Market and customs union while avoiding the re-establishment of a border on the Irish island? The Brussels’ solution has been to offer Northern Ireland “special treatment” — basically allowing it to independently remain within the customs union and single market while establishing customs checks along the Irish Sea. But this in itself is unacceptable for British conservatives in London and unionists in Belfast: separating Northern Ireland from the UK would be seen as a threat to the integrity of the union. May herself has stressed that “It would mean breaking up our country. We will set out our alternative that preserves the integrity of the UK…in my judgment it is something no British Prime Minister would ever agree to.” Perhaps she is right or perhaps she’s just well aware of the political implications for her government. The Northern Irish DUP party, on which May’s parliamentary majority depends, has already threatened to pull out of the government coalition if she agreed to the EU’s plan.

Meanwhile, opponents within her party, as well as a power-hungry Labour, seem intent on seeing how things pan out. Perhaps they’re just waiting like hyenas for the inevitable: May’s failure to clinch a dead that fairly satisfies all sides. Jeremy Corbyn has already pledged to reject any Brexit deal that doesn’t meet his party’s demands, including retaining the “exact same benefits” as under the customs union and single market. But that is simply not going to happen. Even if May did manage to convince the opposition to support her deal, her own party could potentially stand in the way. Former cabinet member Steve Baker recently stated that at least 80 Conservative MPs would vote against the deal in parliament. This could not only spark a challenge to May’s leadership within the party but result in a snap general election. Corbyn certainly seems to be confident, telling party members at a conference in Liverpool that “when we meet this time next year, let it be as a Labour government.”

Given Labour’s unexpectedly strong performance in last year’s general election and growing disillusionment with May’s inability to escape this conundrum, the statement is not necessarily a fantasy. Nor would it be sensible to write off the possibility of a fresh referendum in the event of failure to reach a deal. A YouGov survey conducted in August found that 50% of voters would support a second referendum in the event a no-deal scenario. Even if negotiations don’t end up failing, 45% of the electorate would still back a second referendum, with 34% against and 22% undecided. Interestingly, over 63% of Labour voters support a Second Referendum, among which 77% would vote to “Remain.” Keir Starmer — a prominent Labour official and Shadow Brexit Secretary — must have been well aware of these numbers when stating that “nobody is ruling out Remain as an option.” Well, things are certainly getting interesting.