Why Brexit compromise hasn’t defused political tensions in Britain

Two years after Britain voted in a highly charged referendum to leave the European Union, its government this week agreed to a draft treaty with the EU to make that choice happen. But the deal has still not resolved deep divisions here over what Brexit could, or should mean.

This week’s political chaos in London, replete with ministerial resignations, has exposed the tensions between full-throated calls for unfettered British sovereignty and the reality of Britain’s economic dependence on the EU, which is its closest and largest trading partner.

On Wednesday, as Theresa May urged her reluctant cabinet to back the agreement, scores of noisy protesters gathered near 10 Downing Street, the Georgian townhouse that is the seat of executive power and a symbol of Britain’s historic reach across the globe.

Ms. May’s half-in, half-out Brexit is designed to blunt Brexit’s economic blow to Britain. But that’s not what Sarah Mayall, holding aloft a white placard reading “Leave Means Leave,” says she wanted in 2016 when she ticked the box to leave the EU. “It’s not an economic goal. It’s a sovereignty goal,” she says.

To Ms. Mayall, the UK-EU agreement is a betrayal. She is appalled that it would leave Britain in a transitional customs union with the EU after its formal exit from the union next March. That is designed to avoid a rupture in cross-border trade and a crash in business confidence, but it will prevent London from negotiating its own sovereign trade deals with the US and other major economies.

The question of sovereignty, and where Britain stands in relation to the rest of Europe, casts a long shadow in this proud island nation. The way that Britain has ceded legal and regulatory powers to the EU in return for access to the world’s largest trading bloc has long rankled some. But a rising tide of prosperity dampened much of the criticism until the 2008-09 recession unleashed a populist wave that found its target in EU membership and European immigration.

Squaring the circle

Now Ms. May, who has a slim majority in parliament, is struggling to strike a balance between a return of British sovereignty and defending British prosperity. But the compromise accord she presented to parliament on Thursday is unlikely to square this circle, says Helen Thompson, a professor of political economy at Cambridge University.

“The difficulty we’re now in goes back to the difficulty when Britain joined [in 1973]. It’s very difficult to deal with a constitutional question,” she says.

A strong current of euroskepticism courses through May’s center-right Conservative Party. For decades, anti-EU politicians argued that Britain should leave the Union and reassert its national sovereignty, even if less trade with the EU made Britain poorer. In recent years, however, this argument for democratic control has been embellished with another claim, that Britain could strike better trade deals outside the EU, and grow richer.

MP’s who “saw this as a governance issue as much as anything else” have been superseded by “a kind of Conservative euroskeptic who puts equal weight on trade,” says Ms. Thompson.

As they campaigned for the 2016 referendum, anti-EU politicians knew they couldn’t rely just on the minority of voters who prized sovereignty over the benefits of trade integration.

So they made attractive promises. One of the top reasons to vote “Leave”, they claimed in campaign literature, was that “We'll be free to trade with the whole world.… We'll be free to seize new opportunities, which means more jobs.”

This political messaging sowed the seeds of the current impasse over an orderly EU exit, says Alex White, a partner at Flint Global, a financial advisory firm. “To win a referendum they had to win different constituencies, and they had to make an economic case,” he says.

“I think it was always inevitable.... It was going to be very difficult to meet the demands of all these different [political] tribes.”

‘Brit-politics’ dilemma

That challenge was underlined Thursday by the resignation of Dominic Raab, the Brexit secretary, and other cabinet members. Parliament must approve the withdrawal agreement with the EU, and a rebellion in May’s own ranks now makes that hard, if not impossible, to achieve without votes from the opposition Labour Party.

On Wednesday, Labour leader Jeremy Corbyn goaded May in Parliament over the “backstop” in the agreement to maintain an open border between Ireland, an EU member, and Northern Ireland, which is part of the UK. He drew attention to the fact that the deal would not safeguard “the sovereign right of any UK parliament to unilaterally withdraw from any backstop” without EU approval, a concern that resonates with Brexit supporters in the ruling Conservative Party.

May insisted that the backstop would be temporary. She told lawmakers they had a choice between backing her treaty or facing economic chaos. “The choice is clear. We can choose to leave with no deal, we can risk no Brexit at all, or we can choose to unite and support the best deal that can be negotiated,” she said.

The divisions in the ruling Conservative Party over Europe are mirrored across the aisle. Labour accuses the government of doing a bad job of negotiating Brexit terms, yet the opposition has been short on concrete proposals, leading many to believe that its strategy is to hasten a political crisis and an election that it can win. Most Labour MPs, including some who campaigned to stay in the EU, represent districts that voted to leave and where sovereignty and borders remain potent issues.

“That’s the dilemma for Brit-politics. Brexit has cut across both of the main parties’ constituencies,” says Matthew Goodwin, professor of politics at the University of Kent and coauthor of National Populism: The Revolt Against Liberal Democracy.”

Mayall, the protester, agrees with euroskeptic MPs who prefer that Britain simply leave the EU and revert to World Trade Organization terms of trade. It’s a scenario that alarms her employer, an asset management firm, she says. Most financial services companies are aghast at the idea, and some have already moved jobs elsewhere in Europe.  

But Mayall says she prefers this solution to Britain’s agonizing and continuing battle over EU membership. “If we don’t leave and make a clean break, this issue won’t go away,” she says.