Since the referendum to exit the European Union was passed in 2016 with a narrow 52 per cent majority, the UK has been struggling to seal an amicable divorce deal. Theresa May has made it her mission to carry out the wishes of voters after she became the prime minister in July 2016, putting aside her own initial misgivings and stating repeatedly that “Brexit means Brexit”. However, on January 15, MPs voted 432 to 202 against May’s deal. A day later, May won a confidence vote and appealed to MPs from across the political divide to come together to try to break the logjam. With the clock ticking down to March 29 - the date set in law for Brexit - the UK is now in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project it joined in 1973. But with lawmakers deadlocked on the way forward, the UK could face a disorderly no-deal Brexit, a delay to Brexit, or even another referendum on membership.

Customs hurdle

Northern Ireland, which will become Britain’s only land frontier with the EU after Brexit, remains the most difficult issue in talks between Brussels and London. Ireland has insisted on keeping the border open, and the UK government has said that is a priority, a vow to uphold the 1998 Good Friday Agreement that quelled a long-running insurgency in Northern Ireland.

The key issue in the deal is a provision called backstop. It is basically a safety net to ensure there is no hard border whatever the outcome of future trade talks between the UK and EU. But, it means products being checked at the border because Ireland (a member of the EU) and Northern Ireland (which would exit the EU) could be in different customs and regulatory regimes. May has rejected the EU’s proposal saying it would threaten the constitutional integrity of the UK.

If talks go on without a deal, the UK will remain in the backstop indefinitely and stay in the customs union. The advantage of leaving the union is the UK will be able to negotiate free trade deals with non-EU nations. The Opposition Labour party says it would back a deal with a permanent customs union with the EU as well as a close relationship with its single market and greater protections for workers and consumers. Most Conservative MPs reject a customs union because it will prevent the UK having an independent trade policy - a key demand.

No-deal threat

Experts warn that leaving without a Brexit deal would have disastrous consequences for businesses, create chaos at borders, drive up food prices and lead to a shortage of essential goods. The Bank of England has warned that it could shock the economy into an 8 per cent contraction within a year, worse than the impact of the global financial crisis. Output in a less severe but still disruptive no-deal Brexit would fall by around 3 per cent. Barriers to trade would be raised, hurting companies on both sides of the English Channel. Given the likely economic hit, a no-deal Brexit would probably push the pound down, adding to its losses against the US dollar of about 13 per cent since the 2016 referendum.

Delaying Brexit

Discussions are pointing to the fact that a delay in Brexit is inevitable as it seems impossible to finalise a divorce deal before March 29. Former PMs Tony Blair and Gordon Brown say the government should delay the process by a year to break the political impasse. The UK invoked Article 50 of the Lisbon Treaty - the mechanism for starting its exit from the EU - on March 29, 2017. May has hinted that she does not want any extension or delay in Brexit.

New Brexit deal

The UK can propose a new Brexit deal with the EU. That would mean delaying Article 50 and also having a new vote in Parliament. To seek a delay in Article 50, the UK would have to make a request to the EU for an extension. This could be granted only if all EU countries agree at a vote of the EU Council. The UK will get some time for negotiations for a new deal after that and get it passed in Parliament.

Another referendum

Some lawmakers have talked about the possibility of a new Brexit referendum. Labour leader Jeremy Corbyn said he might look at the option of another referendum - a remark that increased market expectations that the chaos could ultimately delay or stop Brexit. But a second referendum would take a year to organise. May has repeatedly said that another referendum would corrode faith in democracy among the 17.4 million people who voted to leave the EU in 2016.

Over to Parliament

May will put forward a motion on January 21 on her proposed next steps. Over the following week, MPs will be able to propose alternatives. On January 29, they will debate these plans, and voting on them should indicate whether any of those plans could get majority support. If a way forward emerges, May could then go back to the EU and seek changes to her deal. UK Parliament would still need to vote on any new agreement, and it is not clear when that might happen.