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The Small Band of Skeptics That Helped Snarl Brexit

Posted by hkarner - 12. April 2019

Date: 11-04-2019
Source: The Wall Street Journal

The European Research Group has no website, no office, and only around 15 lawmakers as full members, yet it wields outsize influence

LONDON—Hours after British Prime Minister Theresa May offered to quit to save her ill-starred Brexit deal late last month, dozens of pro-Brexit lawmakers gathered in the iconic Victorian building that contains both Houses of Parliament.

One spoke in Latin, quoting Tacitus on Britain’s valiant if unsuccessful effort to fight off invasion by the Romans. Another declared, near tears, “What is liberty if not to govern ourselves?”

Several lawmakers in the wood-paneled room insisted the U.K. should leave the European Union in days, without any deal, rather than accept the package Mrs. May negotiated with Brussels to smooth its exit.

The meeting was organized by the decades-old European Research Group, a collection of euroskeptic lawmakers dedicated to ending Britain’s membership in the EU. It has no website, no office, one researcher and only around 15 full members.

But along with the 80 or so Conservative lawmakers the group seeks to influence via WhatsApp, the ERG has become the face of a protest campaign that hamstrung Mrs. May, divided the ruling Conservative Party and sought to define Brexit as a total and abrupt split with the country’s largest trading partner. The rearguard action has proved an important factor in turning Brexit into an intractable mess.

Now, as Brexit spins into further disarray, some euroskeptics worry their campaign was too effective: By insisting on a complete break with the EU and voting consistently against Mrs. May’s deal on the terms of the breakup, the anti-EU hard-liners risk ending up with no break at all.

On Wednesday, the EU agreed to postpone Brexit until Oct. 31. The extra time removes the chance of the U.K. exiting the EU on Friday with no deal, an outcome several euroskeptics favored. It also buys time for the government to water down its Brexit proposals to try to get a deal through Parliament, which has already voted no three times.

The delay represents an “abject surrender” that undermines the U.K.’s democracy, said Bill Cash, a 78-year-old Conservative lawmaker, in the House of Commons Thursday, while calling for the prime minister’s resignation.

“It is not delivering on the referendum result,” said another pro-Brexit lawmaker, Jacob Rees-Mogg, on Thursday. “People were expecting to leave on the 29th of March and here we are heading towards Halloween, and there is some symbolism in that.”

Last week, burned by the rebellion in Conservative ranks, Mrs. May abandoned appeasing the euroskeptics in her party and began discussions with Jeremy Corbyn, leader of the opposition Labour Party, to find a compromise.

That could result in the U.K. much more closely bound to the EU than the deal Mrs. May had initially presented. New terms might prevent Britain from signing its own global trade deals. Or, if Parliament fails to find agreement, there could be a second referendum, which could cancel Brexit.

“It’s like throwing away the hamburger and eating the napkin,” said Daniel Hannan, a British member of the European Parliament who is a prominent Brexit campaigner and was the ERG’s first-ever researcher. “Brexit could be lost.”

British voters endorsed Brexit in June 2016, but the vote didn’t outline how the U.K. would leave the bloc. Mrs. May’s deal with the EU—the subject of the parliamentary votes—clarifies how it would take place. It settles the financial commitments and citizens’ rights on both sides of the English Channel, and sets out a plan to prevent a physical border between Northern Ireland, which is part of the U.K., and the Republic of Ireland, which remains in the EU. It also allows for a several-year transition period in which trade and other relations between the U.K. and EU remain as they are now while details of a future trading partnership are finalized.

Those trailing ties are what the ERG can’t abide. It says the agreement leaves the U.K. at the mercy of EU rule making and trade restrictions with no political influence. “We are being, as a Parliament, politically castrated,” said Mr. Cash, who has protested in Parliament against the EU since 1986.

The group, instead, wants a complete break, with immediate freedom to negotiate trade deals and set laws as a single nation.

Some euroskeptics, including Mr. Cash, hold firm that they will never back Mrs. May’s deal, which has earned them the nickname in ERG circles of the “Colonel Kurtz brigade,” after the mad U.S. Army officer played by Marlon Brando in the movie “Apocalypse Now.”

As Mrs. May begins talks with the opposition, though, others in the caucus are splintering, seeing a better strategy in backing the current terms. The Labour Party supports the U.K. staying in a customs union with the EU, an agreement that provides tariff-free trade among EU members but limits the U.K.’s ability to make its own trade deals.

“In my view, it was clear we had to support the government, because we would lose Brexit altogether,” said Pauline Latham, a Conservative lawmaker and ERG subscriber who has voted in favor of the deal.

Other euroskeptics are prepared to play the long game. “The U.K. will leave the EU, but it will just take longer,” said Conservative lawmaker Bernard Jenkin. “People like me regard a time-limited extension as much less bad than the draconian withdrawal agreement,” referring to Mrs. May’s deal.

Mrs. May has pledged to resign once a Brexit deal is through Parliament. That would give euroskeptics a chance to place one of their own as leader of the Conservative Party, in charge of hammering out a trade agreement with the EU.

“The euroskeptics have shot themselves in the foot,” said Matthew Goodwin, a politics professor at the University of Kent. “What I fear, is this is battle one in a 10-battle saga.”

The ERG was born in 1993 amid the financial and political turmoil surrounding the Maastricht Treaty, a foundational document of the modern EU that, among other things, paved the way for the euro.

The year before, the U.K. had been ejected from the European Exchange Rate Mechanism, the precursor to the euro, following intensive financial-market speculation against the pound. The shock, dubbed Black Wednesday, was a watershed moment that fanned anti-EU sentiment in the Conservative Party. Euroskeptics called it White Wednesday.

After Maastricht was implemented, euroskeptic lawmakers tried to move on from the bitter infighting. The thinking was, “well, we better look a bit more moderate and less loony,” recalled Michael Spicer, the ERG’s founder who retired in 2010 after 36 years as a member of Parliament.

The ERG created research and held events to inform the debate on the EU. While the ERG made the case against Europe, it wasn’t particularly radical about leaving at that time, said Mr. Spicer. Several euroskeptics went off to create their own pressure groups, annoyed that the ERG wouldn’t push for a real split with Europe.

In 2016, during the campaign for the Brexit referendum, euroskeptics used the example of countries such as Switzerland or Norway—which were in Europe but not in the EU—as templates of where the U.K. could head. “We certainly didn’t talk about leaving without a deal,” said a senior official at the Vote Leave campaign.

After the referendum, as the leaders of the Brexit campaign either became ministers in Mrs. May’s government or moved on, it left a vacuum. Into the void stepped a crew of Conservative lawmakers who took on the job of pressuring the government to deliver Brexit.

One of the group’s principal figureheads became the ERG chairman, Mr. Rees-Mogg, a man with a cut-glass accent often sporting a double-breasted suit and described as a throwback to Britain’s age of empire.

“It is a badge I wear with pride,” he said in speech last year. “It was in the 18th century that the seeds of our greatness, sown long before in our distinguished history, sown conceivably by Alfred the Great, began to grow and to flourish,” he said, citing the 9th-century monarch considered the first English king.

Along with the ERG’s deputy chairman, Steve Baker, a former Lehman Brothers employee with a taste for skydiving, he led a cluster of euroskeptic lawmakers seeking to define how Brexit would play out.

The 80-or-so Conservatives affiliated with the ERG largely agreed the U.K. should leave the EU in an abrupt break to deregulate, take control of rule making from Brussels and pursue its own trade policy.

In January 2017, Mrs. May made a speech saying Brexit meant a deal to leave the EU’s single market—which sets common regulations across the bloc—and customs union. The ERG was delighted. If implemented, the U.K. would be free from the jurisdiction of the European Court of Justice, the EU’s top court, and be able to negotiate its own trade deals.

But that pure form of Brexit proved impossible to quickly deliver without economic cost. Unpicking more than four decades of economic integration—since the U.K. joined the bloc in 1973—couldn’t be done overnight.

Instead, Mrs. May in summer 2017 presented a plan to temporarily maintain a close economic relationship with the EU after leaving, and to retain large parts of EU regulation, while a trade deal was finalized.

Their fury grew when the deal with the EU was unveiled last November. The U.K. would effectively follow the EU’s rules—possibly until the end of 2022—without having a say in the government, while it negotiated a trade agreement with the bloc. If no trade deal was reached by that time, Britain would remain in the customs union with the EU, potentially indefinitely, to ensure that no hard border appeared between Ireland and Northern Ireland, which was unacceptable to people on both sides after decades of violence.

The ERG published a document stating the deal would leave the U.K. as a “vassal state.” Its followers launched a sustained campaign in the media to trash the deal. Lawmaker Boris Johnson, who had resigned as foreign secretary, called it a “suicide vest” around the British constitution.

Fearing her party would split, Mrs. May sought to appease the ERG. Three of the group’s chairmen, including Mr. Baker, were made ministers in the department for exiting the EU. John Redwood, a lawmaker who has promoted leaving the EU for decades, was knighted.

Still, euroskeptic members increasingly concluded that leaving without a deal was better than accepting Mrs. May’s plan. “The trust just broke down,” said one senior former ERG leader.

The government undertook preparations for leaving with no deal but warned it would come at a price. A no-deal Brexit would suddenly cut all trade and regulatory agreements with the EU, potentially causing huge economic disruption.

The Bank of England published worst-case scenario estimates that showed the economy could shrink between 3% and 8% before returning to growth. A government analysis cast doubt on the idea that trade deals with the rest of the world could turbo charge the British economy. Officials estimated the long-term benefit of free-trade accords with the U.S. and other potential partners would be to boost national income by between 0.2% and 0.7%.

Euroskeptics dismissed the predictions as overblown. “The reason people want to keep us in the single market and the customs union is that they never wanted us to leave and don’t like the result of the referendum,” said Mr. Rees-Mogg at an event last year.

In December, euroskeptics triggered a Conservative Party no-confidence vote in Mrs. May. It was a flop. Though 117 voted against her, 200 backed her to continue. Under Conservative Party rules, the vote left her unchallengeable for a year.

The deal Mrs. May negotiated with the EU came up for its first vote in Parliament in January. It was rejected by the biggest margin of any government proposal in British history.

A second vote, in early March, also failed.

As the original leaving date of March 29 approached, Brexit began to spin out of euroskeptics’ control. Parliament voted against leaving the EU without a deal, undercutting many in the ERG. The deadline was delayed by several weeks.

At a meeting with euroskeptics, including Mr. Rees-Mogg and Mr. Baker, at the prime minister’s country retreat at Chequers, Mrs. May was told that lawmakers might support her deal if she promised to quit.

The next week she offered to step down if her deal was passed. Mr. Rees-Mogg said he now would reluctantly back the deal: “Half a loaf is better than no bread.” Other euroskeptics refused to budge.

In a third vote on March 29, Mrs. May’s deal again failed, but the prime minister had gained support and was now short only about 30 votes, compared to the deficit of about 115 in the first vote.

Last week, Mrs. May shifted strategies. ERG members watched on a television in a meeting room as the prime minister announced that, unable to unite her party behind Brexit, she would now seek a compromise deal with the Labour Party.

“It did not go down well,” said one person present.

Some members are now prepared for a compromise deal. Others, such as Mr. Cash, believe that the protest movement will still win the day, because the national referendum inscribed leaving the EU into British law and so can’t be easily revoked.

The ERG recently got help from an old hand. Mr. Spicer, the ERG’s founder who is now 76 years old and ailing, attended an ERG meeting with this message: Keep fighting. “Some say the time has come to moderate the overall stance,” he said. “But I think consistency is important.”

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