The odds of a second referendum on Brexit just rose sharply

  • The odds of Britain holding a second referendum just went sharply up and are now a near coin-toss, according to HSBC.
  • But Prime Minister Theresa May probably does have the majority she needs to get her deal through parliament, economist Elizabeth Martins believes.
  • We looked at the wafer-thin numbers.

The odds of Britain holding a second referendum just went sharply up and are now above 40% – a near coin-toss – according to HSBC economist Elizabeth Martins.

Prime Minister Theresa May unveiled the Brexit deal she has negotiated with the EU, and it was met with multiple resignations from her own cabinet and some of her own MPs calling for her to resign. May’s Conservative party has a wafer-thin technical majority in parliament and it will be very, very difficult for her to get her deal approved.

HSBC sent a note to clients last week that said, “speculation was rising that the UK could be headed towards a ‘no deal Brexit’ or a second referendum … if this deal fails to get through parliament.”

The media is largely assuming there is no parliamentary majority for May’s deal, which keeps Britain inside Europe’s customs union, pushes off a date for rearranging the border between Ireland and Northern Ireland, and keeps the country closely tied to the EU. The opposition Labour party officially opposes the deal, and even if only a few Conservatives also vote against it the bill will fall.

But Martins’ analysis says, surprisingly, that it is likely that May can cobble together enough MPs to support her plan. Yes, hardline Leavers on the Tory benches will defect against her. But enough moderate Labour MPs, fearing a disastrous “no deal” scenario, will join the government to get the deal done. Here are Martin’s numbers (below). Only if there is a very high level of rebellion among both Labour and Conservative MPs will the deal fail, she argues:

Scenario 1 – low level of rebellion

  • 20 Conservatives vote “no”
  • 35 Labour MPs vote “yes”
  • Majority: 39

Scenario 2 – moderate level of rebellion

  • 30 Conservatives vote “no”
  • 40 Labour MPs vote “yes”
  • Majority: 9

Scenario 3 – high level of rebellion

  • 45 Conservatives vote “no”
  • 45 Labour MPs vote “yes”
  • Majority: -11

Scenario 4 – same as 3 but with high level of abstentions

  • 45 Conservatives vote “no”
  • 45 Labour MPs vote “yes”
  • 15 MPs abstain or refuse to vote
  • Majority: 4