Just when you thought Brexit couldn’t possibly become more chaotic, those wily Brits manage to surprise.

Theresa May tripped yet another landmine. Thanks to her decision to repeatedly put off votes and decisions in the hope of still getting approval for her detested Withdrawal Act, May was already set to go to Brussel for Thursday and Friday meetings to get approval for a Brexit extension….with it looking pretty certain that her side would not only spring whatever idea they had on the EU27 at the very last minute, but would not have a very well thought out plan. The combination of pushing the EU27 to the wire and almost certainly not having any plausible strategy as to how to create consensus around a different sort of Brexit if her Meaningful Vote failed yet again was already making the upcoming EU Council meeting look at risk of going off the rails.

As UK and Ireland-based readers no doubt know full well, May’s plan to have another Meaningful Vote this week blew up in a way that called her and her Government’s basic competence into question. Commons Speaker John Bercow said that if the Government tried again to have a vote on its Withdrawal Act, he’d deem it to be impermissible in the current session of Parliament by virtue of the matter having already been considered. And he further indicated that the Withdrawal Act would need to change substantially for him to deem another vote to be in order.

We’ll get to more specific observations below, but the two big takeaways are:

1. On multiple levels, this blowup was a complete failure of planning by the Government. It was hardly a surprise that Bercow could nix a vote. Yet the Government failed to investigate the matter, pre-sound Bercow, and have contingency plans ready if the Speaker said no. 2. This opinion by Bercow isn’t (or didn’t have to be) the disaster it is portrayed as being. But the complete lack of imagination and preparation not only leaves May floundering, but has thrown a big monkey wrench into the planning the EU was no doubt trying to undertake. The spectacle of more floundering, plus having to consider even more options, can’t help but further sour the already poor dynamics between Brussels and London. And do not forget, even when the objective stakes are high, interpersonal factors matter and regularly determine outcomes (even though the principals will tell themselves otherwise).

More details below.

The Government was utterly unprepared for Bercow’s position on the planned vote. Both tweets courtesy Richard Smith:

Hilary Benn asks whether there must be negotiations with the EU to make TM’s brexit deal to be “sufficiently” different to be voted on again. John Bercow says: “In all likelihood the answer is yes.” A change to legal opinion not enough 😶 — Sam Coates Times (@SamCoatesTimes) March 18, 2019

Sense of absolute shock among ministers – no idea what to do. "There's no plan yet, everyone is just trying to come to terms with it," one says. — Jessica Elgot (@jessicaelgot) March 18, 2019

And notice the next tweet in this thread:

I am NOT an MP. I knew about this Erskine May rule. Just shows the deep, deep arrogance and STUPIDITY of May and her government if they are surprised by The Speaker’s ruling! — William Irving Clark (@ClintClease) March 18, 2019

The Government having the rug pulled out from under it by Bercow covered up the fact that May probably wasn’t having a meaningful vote anyhow. The press had been in its usual horserace drama, playing up the idea that May could flip the DUP to support her Withdrawal Act, and based on that, somehow get another 65 MPs to change their mind. The Irish press had been more skeptical about the DUP supporting May’s deal.

On Sunday, the Government started trying to lower expectations. On the Andrew Marr show, Phillip Hammond said the Government would not hold a vote this week if it didn’t have DUP and enough Tory support to secure passage. Right before Bercow nixed a vote, Robert Peston tweeted:

It is now almost 100% certain that there will be no deal between the DUP and the government this week, and therefore – as I said on Saturday – @theresa_may will not risk third meaningful vote this week. So the scenario I mapped out this morning of the vote on her deal… — Robert Peston (@Peston) March 18, 2019

So despite all the rending of garments, May would be more or less where she is now, but with less egg on her face.

Not only was Bercow’s reaction not at all unreasonable, it’s also not as serious an impediment as the press and the Government’s ineptitude are making it seem. Richard North explained how not only was Bercow’s opposition to yet another vote likely, but there was precedent for proroguing Parliament, which is being depicted as a nuclear option. From his site:

I can’t think why the Speaker’s ruling yesterday on the resubmission of the Brexit motion should have come as a surprise….. If it is truly the case that Downing Street was unaware of this restriction, and is currently in a state of shock, then it points further to a sense of pervasive incompetence in government…. As to the source of this information, it resides in Erskin May, but obtainable to mere mortals only on payment of £439.99 – although it is, of course, free to our rulers…. And there we can see that this is not a small, arcane point. A whole chapter is devoted to the rule under the title: “same question may not be twice offered”. There we find that: It is a rule, in both houses, which is essential to the due performance of their duties, that no question or bill shall be offered that is substantially the same as one on which their judgment has already been expressed in the current session. We also find details of where prorogations have been resorted to in order to circumvent this rule. One period in 1707 lasted a week but in 1721 it was over in a mere two days. In theory, though, there seems to be nothing to stop a prorogation being set for an hour or less, which could – in theory – keep Mrs May’s motion on track, ready to be voted on before the European Council later this week. Nevertheless, at the time of writing, plans for today’s expected vote are in disarray, with the situation accurately described as “chaos”, even if we detach the constitutional aspect from it. The fact is that, since the government intended to offer the same “question”, it should have been prepared. It wasn’t.

Being prepared would have included not just preparing the groundwork for proroguing or other fallback moves, but also briefing the EU. The flailing about raises even more doubts about whether it’s possible for the UK to steer any path through Brexit. The fact that some top reporters are seeing Bercow as motivated by pique, even if fully warranted, is likely to be noted by EU leaders and factored into their thinking about what to do next.

The EU has one big reason to give an extension: Ireland. We have long had the view that the cost and disruption of a crash out has been greatly underestimated, if nothing else because the imposition of a hard border between the UK and EU is a trade barrier….even if the UK were to be in a customs union.

However, as much as cliff edge Brexit would be messy, businesses are increasingly unhappy with the uncertainty over if Brexit will happen, when that would be and what sort of Brexit will occur. It has hit the point where the press is reporting grumblings that more and more executives are saying protracted uncertainty will be very damaging. At a minimum, it will lead to a big reduction in investment, which by itself would slow growth further.

Moreover, even though it’s a safe bet that “no deal” plans aren’t ready for a March 29 departure, the fact that the EU plans to keep the status quo in place in key areas through as long as the year end would soften the impact of a crash out.

In other words, the English-language press is not registering the considerable ambivalence a lot of EU leaders. For instance, Macron does not seem to be posturing when he says, in effect, the UK better have a damned good reason for asking for an extension. The French government also seems not to think that avoiding a crash out is critical. The officialdom appears to think that while there would clearly be pain, there could also be medium and long term advantages. The mess of the Bercow intervention isn’t going to improve the already dark mood in Brussels.

The biggest reason for the extension is likely not to be the UK, which has done everything it could to alienate the EU27, but Ireland. As PlutoniumKun said by e-mail yesterday (before the Bercow train wreck):

Ireland is seriously unprepared for a no-deal – Dublin Port has put in place customs facilities for the Holyhead link but the new ferry links to the continent are not running yet so far as I know. I know some police and army people, I’ve not heard any suggestion from them of cancelled leave, etc., although no doubt there are secret contingencies. A full ‘soft’ mobilisation along the border would be essential. I think the Irish government has assumed all along there would be an extension if May could not get the deal through. The government will go into panic overdrive in Brussels to get at least a 3 month extension in the last week if they suspect the mood has turned. There will have been furious lobbying over the St. Patricks Weekend in all the key political capitals (including of course Washington, not that they have direct influence at this stage). I agree with Vlade that it would look like bad faith if the EU was to take the option of an extension off the table at this stage. But I’ve been wondering if the soundings about a 21 month extension are intended to set the ground for conditions that they know London can never accept. My guess is that they’ll give May a choice – a very short extension (a few weeks) for another vote, or a 21 month extension with very strict conditions (including a new vote). They know of course that May will be incapable of getting any sort of consensus at home so both could well be refused by default.

Experts are all over the map as to what happens next. Politico’s morning European newsletter hews closely to conventional wisdom, arguing that the EU27 are likely to accept any rationale May gives for a longish extension, presumably her only option given that getting her deal voted through by May 29 looks even more implausible given Bercow….and the EU is not likely to give her an extension to try anyhow, and then have to give her a second one.

Robert Peston (who remember has much better EU official contacts than the overwhelming majority of UK reporter) had in a speech last Friday put no deal after a short extension as the most likely outcome. From Portfolio Adviser:

Peston said markets have been massively underestimating the risk of a no-deal Brexit simply because of the complexity of any scenarios that follows through Parliament, whether that is May’s deal, another deal, a delay, or another referendum. “My central prognosis is that we will end up with a no-deal Brexit, not on 29 March but a month or two afterwards,” he said. “The reason I say that is because the challenge of getting everything aligned to prevent that from happening is very, very hard.”

Peston’s concerns are valid. There are too many things that have to happen for either of the ways out of a no deal to happen: a revocation of Article 50 or getting to a Withdrawal Agreement. As we’ve stressed repeatedly, any process that has a lot of steps to completion is highly failure prone if those steps are not assured of success. This is simple cumulative probability. Not only do we have many steps, but virtually none of them have odds of success as high as 90%.

Richard North focused on how flabbergasted the EU is likely to be. And contrary to Politico (and mainstream thinking), he contends that the Bercow punch makes a long extension less likely:

With only ten days to go before the scheduled Brexit day, any idea of a roadmap has evaporated. The “colleagues” in Brussels can have no idea of Mrs May’s intentions because, most likely, she herself has no clue of what they are. As for us, we not only don’t know whether we are going to leave on time, we don’t even know what is planned over the next few days…. Confronted with an unprecedented situation where there are multiple variables and significant long-term consequences, 27 Member State governments have to consult internally to establish their own responses, and then they have to consult with each other and with the EU institutions before coming to a common position. At the best of times, this would be difficult to achieve but, given the circumstances, it is almost at the point of expecting too much. Probably, the only play available to the “colleagues” is to give the UK a short-term extension, for the sole purpose of organising a third and final vote. For that, though, they will need Mrs May’s assurances that there is a procedural “fix”, which undoubtedly there is. The precedents for a prorogation are sound. Even the speaker agreed that resubmission after prorogation “is self-evidently valid”. However, if prorogation takes us into an extension period, it would almost certainly create a make-or-break situation, where a negative vote would precipitate a no-deal Brexit – unless at the last minute Mrs May is prepared to revoke the Article 50 notification. An affirmative vote would take us into the transitional period. From this perspective, it would seem that the long-extension option is off the table. Keeping to their current policy stance of refusing a long extension unless there is a “substantial justification”, the European Council might find it difficult to authorise anything other than a short period, in the absence of any certainty as to the Westminster parliament’s intentions – which now cannot be divined before the European Council. One final possibility, though, might involve the Council deferring any decision and convening an emergency consultation on 29 March. That, literally, would leave it to the eleventh hour – one hour before midnight, Brussels time – maximising uncertainty and creating an intolerable situation.

North doesn’t state it as crisply as he might, but given May’s famed rigidity, she may hold fast to her Plan A of trying to bully Parliament into approving her deal.

Will the EU put itself through the brain damage of letting her try and having an emergency summit March 28 and 29, particularly if May fails to say much about what her Plan B might be? The UK press has stories saying she would seek either a nine month or a one year extension if she can’t get her deal approved. Neither is long enough for a second referendum and follow-up actions, and it’s hard to see any other way to shift the deep political divisions in the UK far enough to get at a new type of deal. Given Parliament just having rejected a second referendum, she can’t use that as a reason for delay, and it seems unlikely that she’s say she’d call for a new general election. EU leaders have said they won’t let May get away with offering no reason, as in no plan for how to achieve a different Withdrawal Agreement, but pray tell, what could she possibly say?

Or will the EU give her a few months, even though the business community won’t be happy, as the most they can justify given the UK’s utter confusion, as well as to give Ireland some badly needed prep time?

The silence of the Government on what to do next, plus the fact that Tusk is making the rounds to see if he can sell his longer extension idea, says everyone is still very much in the dark.

Update 6:15 AM: Vlade just sent this by e-mail, and it hit the wires less than an hour ago. Oddly the Reuters version that he is getting in the UK is not the same as the one I am getting in the US (we poor Yanks must need to be sheltered from the cold realities of Brexit) but I see similar quotes in the Independent’s and the Express’ version of the story:

Germany to U.K.: Please Deliver Clear Plans (9:20 a.m.) German Europe Minister Michael Roth had a stern warning for Theresa May’s government as he arrived for a meeting to prepare for Thursday’s summit in Brussels. “I don’t have any appetite for substance-less, very abstract discussions and negotiations on Brexit,” he said. “Please deliver, dear friends in London, please deliver.” He added: “Time is running out and we’re really exhausted by these negotiations and I expect clear and precise proposals of the British government, why such an extension is necessary. It’s not just a game, it’s an extremely serious situation.”

Vlade added, and I concur: