November 15, 2018 / 12:57 PM / a month ago

Breakingviews - UK government turmoil hardens Brexit dilemma

Britain's Prime Minister Theresa May, prepares to make a statement outside 10 Downing Street, in London, Britain November 14, 2018. REUTERS/Henry Nicholls - RC1B7ABA9CC0

LONDON (Reuters Breakingviews) - The British government is finally confronting its Brexit dilemma. Two cabinet ministers quit on Thursday morning, weakening Prime Minister Theresa May and narrowing the already-slim chances of parliament approving her divorce deal from the European Union. That makes the two alternatives of a chaotic Brexit or another referendum more likely.

Less than two days after May secured her draft deal with the EU, the 585-page agreement is already on life support. Brexit Secretary Dominic Raab, who voted to Leave in the 2016 referendum and helped negotiate the deal, resigned arguing that it violated the Conservative party’s election promises. Work and Pensions Secretary Esther McVey, a fellow Brexiteer, followed shortly afterwards, as did two more junior ministers.

The departures increase the likelihood that May will soon face a challenge to her leadership. They also tilt the parliamentary arithmetic further against the prime minister’s divorce deal, particularly if the resignations encourage other Brexit supporters to oppose the deal. The Democratic Unionist Party on whose support the government depends has already signalled its displeasure with the agreement. That makes it hard to see how May can cobble together a majority.

Yet replacing the prime minister would not change the hard choices that Britain now faces. With 134 days to go until the country formally leaves the European Union, there is little time to reopen negotiations. Besides, the EU is unlikely to make significant new concessions. Leaving without a deal would be painful: the International Monetary Fund estimates that cutting Britain off from the 27-nation bloc without a trade agreement would knock 5 to 8 percent off economic output over the long run.

The threat of economic chaos may eventually prompt Brexit supporters to back down and reluctantly support May. The pound fell 1.3 percent against the U.S. dollar on Thursday morning, and will probably weaken further as the clock runs down without a clear solution.

The alternative is for parliament to hand the difficult decision back to the electorate. That’s still a challenge: neither main political party formally supports the idea. But unless May can survive and revive support for her deal, another referendum may be the least unattractive way to resolve the Brexit dilemma.

Breakingviews

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