The prime minister has lost her majority and rebellion is simmering in her party. Will she survive another 12 months?

After a tough 2017, what does next year hold in store for Theresa May?

Theresa May began the year with a healthy majority in parliament, a commanding poll lead and an apparently unassailable grip on the Conservatives. She ends it relying on the Democratic Unionist party to govern, with rebellion simmering among MPs on both wings of her party – yet doggedly insisting she is “getting on with the job”.

But 2018 will bring a fresh set of daunting challenges. First, and colouring everything else, is Brexit. The prime minister snatched victory from the jaws of defeat in December by securing the EU27’s agreement that “sufficient progress” had been reached to proceed to the next stage of negotiations.

The deal, however, came with a £35bn-plus price tag, and exposed tensions over Northern Ireland and its border with the Republic that have been parked, rather than resolved.

Quick guide What are Brexit options now? Four scenarios Show Hide Staying in the single market and customs union The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election. The Norway model Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules. The Canada deal A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far. No deal Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organization rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consequences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.

May’s cabinet held its first formal discussion of a potential future trade deal – the “end state” – in December, but little clarity is expected until the new year, with two rival camps vying to shape the debate.

Broadly, Boris Johnson, Michael Gove and Liam Fox – and their followers on the far reaches of the Tory backbenches – are “divergers”: they want Britain to “take back control” of laws and regulations.

Philip Hammond, Amber Rudd and other “aligners”, cheered on by pro-EU MPs, would prefer a closer continuing alliance, fearing the impact on economic stability of a more abrupt shift.

May’s studied ambiguity has kept these groups just about onside: she has suffered only one defeat in the Commons on Brexit, which for a government with no formal majority handling an issue of such divisiveness is a moderate success.

But experts warn that as negotiations shift to the nature of the “end state”, holding her party together will become a growing challenge.

“I personally think there is no other deal than a soft Brexit deal, and she’s just going to lose Brexiteers off the edge of the bus,” says Lord Wood, a Labour peer and former adviser to Ed Miliband.



“I think at some point the Brexiteers’ tolerance for ‘the wrong kind of Brexit’ will snap.” Whether than means cabinet resignations or backbench demands for a leadership contest, handling the malcontents will require a deft touch few at Westminster believe May has shown in the past 12 months.

Matthew O’Toole, who was the chief press officer in Downing Street until just after the general election, agrees that keeping the Brexit big beasts on side will be tough.

“The really crucial question for the next year is what amount of compromise are Gove, Boris – the important, charismatic, publicly known Brexiteers – prepared to accept. Where does their principle end and political calculation begin?” he says.

May is also under pressure to rebuild her party’s pitch to the country.

Backbench rebellions on a series of issues, from universal credit to school funding, underline the extent of the Tories’ vulnerability to Jeremy Corbyn’s anti-austerity message.

MPs want answers to their constituents’ concerns on spending cuts – and a broader vision of what a Conservative government is about. “They have still not given the public any reason to vote for them. Where are the bold policy offerings?” says one disgruntled senior Tory.

Nick Timothy, May’s former joint chief of staff, who was forced out in the wake of the general election, has been using his column in the Daily Telegraph to recommend radical measures, including a wealth tax, that were noticeably lacking from the manifesto he helped to write.

Gove has been getting his teeth into the environment brief, announcing policies on everything from plastics to pesticides.

Tory MPs have been told to stress their green credentials, which No 10 hopes will help to improve the public’s perception of the Conservatives’ values.

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In the new year, Downing Street also plans to focus on housing and school standards, areas in which it believes May has a good story to tell.

But she will also have to tackle controversial issues such as post-Brexit immigration, and some of her MPs fear she is hampered by timidity and her lack of a solid majority.

Meanwhile the prime minister’s every move is watched by a platoon of potential successors.

From Johnson, who has been waiting for the ball to “come loose from the back of the scrum” for years, to newer faces such as the fiercely ambitious defence secretary, Gavin Williamson, they are united for the moment by the sense that the painful compromises required by Brexit would be better made by the already heavily compromised May.

That could change if hardline Eurosceptic MPs believe Brexit is being put at risk, or the party’s liberal wing thinks the Conservative brand is taking such a hammering it’s time for a change.

Local elections in May, including in London, will be a crucial test of the party’s support. But for the moment, May’s strongest protection is the resurgent Corbyn. Conservative MPs fear any new leader would be forced to seek their own electoral mandate – and might well not get it.