The chances of a second Brexit referendum are “rising strongly” thanks to Tory MPs’ continued opposition to Theresa May’s deal, a senior Cabinet minister has told HuffPost UK.
With the prime minister announcing a last-minute postponement of a crunch Commons vote on her plans, several ministers are now switching to the idea of a so-called “people’s vote” as the only credible way out of the parliamentary deadlock.
The PM rejected repeated demands from MPs on all sides of the Commons for a fresh referendum, with Tory Anna Soubry among those saying that the views of the public had changed.
If May’s final gamble to win concessions from Brussels fails, senior Tories think that a fresh referendum could be more palatable to a cross-party majority of MPs than the main rival option of a Norway-plus style exit.
Ministers have seized on damning financial warnings issued by Bank of England Governor Mark Carney and his deputy Jon Cunliffe last week, about the dangers of the Norway option – where the UK would have to apply rules from Brussels but could not influence them.
Carney said that joining the European Economic Area (EEA) or European Free Trade Association (EFTA) would significantly increase risks to the British economy, while Cunliffe stressed that the City of London would be hit hard.
Ministers believe that the Dominic Grieve amendment passed last week by MPs – which allows Parliament to take control of Brexit rather than the government – has made alternatives like a second referendum more feasible.
“It’s now clear as a result of last week’s vote that parliament will assert. There are options that parliament will consider from Norway-plus to the second referendum. Within that the second referendum is rising strongly on the rails,” the cabinet minister said.
“Norway is dropping back significantly because of the evidence the Treasury Select Committee took last week from Carney but also from Jon Cunliffe, the deputy governor. Basically, he noted how damaging to the City and financial services Norway would be.”
Work and Pensions Secretary Amber Rudd suggested this weekend that she could back a Norway-plus arrangement, telling the Times newspaper it “seems plausible not just in terms of the country but in terms of where the MPs are”, although she added: “Nobody knows if it can be done.”
However, colleagues point out that Rudd also kept open the option of a “people’s vote”. “If [the PM’s plan] doesn’t get through, anything could happen: people’s vote, Norway-plus, any of these options could come forward,” she told the BBC on Saturday.
“I wouldn’t over interpret her alighting on that particular option [Norway plus],” one Cabinet colleague said. “She was not expressing a personal preference for Norway, it was one that came closest to mind…it was illustrative of the fact that if there were a need for other options they would be on that [soft Brexit] side of the Prime Minister’s deal rather than the other side.”
Backers of a second referendum also point out that the Norway model would breach the Tory party’s commitment to ending free movement and staying out of a customs union.
Sources within the Labour leadership are also increasingly wary of the Norway-plus idea. The party’s own carefully-crafted policy on Brexit, hammered out at its party conference, does however include an option of a “public vote”.
Ministers believe that as a result, a second referendum – along with a vote against “no deal” – is the option most likely to win both official Labour backing and enough Tories to pass through the Commons.
In his evidence to the Treasury Select Committee last week, Carney told MPs that the Norway idea would increase economic risk.
“The risk of being a rule-taker goes up with time. From a financial stability perspective, it is highly undesirable to be a rule-taker and to lose supervisory autonomy for any considerable length of time.”
Sir Jon Cunliffe, the Bank of England’s deputy governor for financial stability, also heavily criticised the idea. “Our financial sector is about 20 times bigger than Norway’s, it is much more connected internationally, it is much more complex,” he said.
During the PM’s three hour statement on the postponement of the Brexit vote, many MPs lined up to demand a ‘People’s Vote’.
Soubry said: “The thing that has changed is the view of the British people.” When Tory colleagues around her shouted “No, it hasn’t!”, she hit back: “I know it’s nearly pantomime season but ’Oh yes it has!”
Labour MP Jo Stevens told HuffPost UK: “There is no majority in the House of Commons for the kind of deal Theresa May is proposing or a “Brexit-at-any-cost” No Deal proposal.
“If MPs vote down these bad Brexits, they will have to ask themselves what they want to happen next. The way events are unfolding and with our campaign gathering further momentum, a People’s Vote is no longer a long shot but getting a shorter shot by the day.”