Investors deserve to know Theresa May’s backup plan if Brexit vote fails

Uncertainty reigns in the UK as the country waits for the outcome of a vote on December 11 to decide the plan's fate

Public opposition to the prime minister Theresa May's proposed version of Brexit has weakened her position. Photo: EPA

There is a black box at the heart of Brexit.

The British government of Theresa May has repeatedly refused to say what course of action it will pursue if the lower chamber in the UK's Parliament, the House of Commons, votes against Mrs May's plan for Brexit on December 11.

The premier's proposal is essentially formed of two parts, a withdrawal agreement that governs the terms of the UK's departure from the European Union, and a political declaration that — as far as is possible — specifies the type of relationship that the two parties would like to have once that separation has occurred.

These two separate elements have been negotiated between the UK and the European Commission over the past year and a half, and last weekend they were then ratified by 27 European heads of state, with little hesitation.

But by the time the hundreds of pages of details became public in the UK, and in some cases even before then, British politicians of all stripes had come out to condemn the deal Mrs May had made with her European counterparts.

As a consequence, the prime minister faces what is unquestionably a difficult set of circumstances, and matters will doubtless come to a head on the 11th, only a week or so before members of the Westminster Parliament plan to disperse for the Christmas holidays. At that point, there will be just three months remaining until the current deadline for Britain's departure from the EU under the terms of Article 50, the section of a European treaty that dictates the legal process underpinning this unprecedented divorce.

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After Mrs May's misadvised decision last year to call a General Election, which robbed her Conservative Party of the legislative seats necessary to push through new laws under its own steam, her governing majority in Parliament's lower chamber had already grown razor thin. But in recent weeks the public opposition to the prime minister's proposed version of Brexit has further weakened her hold on the Commons, as the small Northern Irish Democratic Unionist Party that helped prop up her government since that 2017 election has refused to back some of the government's latest finance measures.

And when it comes to the parliamentary arithmetic around the December 11 vote, Mrs May will not only have to countenance abstentions from those same DUP lawmakers; she will likely also face dozens of oppositional votes from members of her own party. If she is to reach the required majority to pass her plan, she will need to win over at least as many parliamentary members from opposition parties like Labour and the Liberal Democrats. For that to happen, Mrs May has clearly tried to frame the options in front of lawmakers in as narrow a manner as possible; it is, she has been at pains to repeat, "my deal or no deal," with the third option being no Brexit at all - one that she has categorically ruled out as being fundamentally undemocratic.

But the possibility has repeatedly been raised by pro-EU politicians in Westminster that Brexit could be reversed, if Mrs May's withdrawal plan is voted down and if a second referendum is arranged. Senior members of the Labour opposition party have recently started to discuss this option, if not to openly endorse it, though the prime minister and senior cabinet officials have refused to be drawn on this hypothetical.

Nor has Mrs May been able to say that she can rule out the possibility of the UK leaving Europe without a comprehensive agreement, crashing out and landing in a world of higher World Trade Organisation trade tariffs and short-term chaos. It is understandable why this embattled and hard-bitten leader does not want to countenance another setback and the consequences it would spawn. But for businesses, investors and individual British citizens, the black box inside Number 10 Downing Street creates a great deal of uncertainty as we enter the final month of 2018.

Willem Marx is a reporter for CNBC International. The National and CNBC International are global content sharing partners