May must call a second EU vote – with a third option

It was billed as the settled will of "the people" and Britain's "independence day" yet two years on from the vote to take the UK out of the European Union and Britain is anything but settled.

Two marches through London this weekend, one campaigning for a second referendum and the other demanding the verdict of the first is honoured, show most clearly that the only thing thus far achieved is a deeply divided nation.

The failure of leadership, of a rudderless government drifting around a stormy sea looking for a safe port, is a disaster for Britain. Downing Street's inability to contain the rebels in its own ranks, including the irritant that is Boris Johnson, is embarrassing the country on the world stage. The Foreign Secretary's "F*** business" response to concerns expressed by Siemens and BMW displays a remarkable lack of sensitivity and seriousness towards an issue that is in danger of running out of control.

Theresa May's own failed endeavours only add to the public's growing dismay that the government is actually getting anywhere at all. Her frequent reassurances that the EU negotiations will result in a deal that will benefit Britain have been sounding hollow for some months. Business, which has issued more warnings than a stuck fog horn, is rightly becoming anxious as the clock ticks down to next March when we're due to make the big break.

In her first proclamation on the steps of Downing Street Mrs May famously stated that "Brexit means Brexit" and in the main the public was prepared to give the new Prime Minister, who echoed Lady Thatcher's determination to get things done, the benefit of the doubt. Sadly, any early indications of decisiveness quickly gave way to muddle. Her failure to consult the DUP on her Irish border "plan", together with the much-ridiculed claim of a Brexit dividend, are two examples of a PM suffering a severe bout of foot-in-mouth disease.

The Scottish government is continuing to cry foul over the Withdrawal Bill and a "failure" to account properly for devolved policy. Now the cracks in Mrs May's united kingdom are being prised wider open by a Cromwellian-style division in the heart of England between the pro and anti-Brexit campaigners. As such this Thatcher-lite Prime Minister has succeeded only in creating greater discord where there was previously harmony.

It is surely time to take stock, swallow what is left of political pride and credibility, and make some tough decisions. There are three options:

The government may choose to soldier on, expressing its right to govern and stand by the verdict of "the people" on 23 June 2016. This is its preferred option, but it is becoming a high-risk strategy with no guarantee of success.

Alternatively, Mrs May could show some leadership and concern for the mess she is creating and accept calls for a second referendum, somewhat erroneously referred to as a "People's Vote", though this is to distinguish it from parliamentary votes. There is some merit in this because if nothing else has been achieved by two years of argument "the people" have at least learned more about the EU and the UK's role within it; indeed, the sort of knowledge that ought to have been imparted during an ill-informed and deeply flawed referendum campaign.

A third option, which may be tied to the second, is that the government takes a business-like decision and simply calls the whole thing off. Any rational board of directors having devised a strategy which turned out to be too difficult to implement would quickly instigate a re-think to cut their losses and avoid doing further damage to the business and themselves (ask RBS about its failed attempts to divest Williams & Glyn).

Politicians, of course, do not behave rationally. They stubbornly attempt to save face by pursuing wrong-headed policies, such as the poll tax, that seem like a good idea at the time, but often lead to a painful conclusion.

However, like businessmen, they must sometimes sacrifice their posts and even their reputations for the greater good. Mrs May knows her party may suffer an irrecoverable split if she were to halt the Brexit process, and call a second referendum. On the other hand, she would gain plaudits for showing leadership over this most important of issues for the country's future.

In any case, there are ways to sell the idea to the public who, after all, never demanded a referendum in the first place. It was David Cameron's idea, in order to save his party from anti-EU rebels. Many of the electorate who did vote to leave would have settled for a re-negotiated treaty.

To that end I wrote a column three days after the vote stating that Britain would be not so much out of Europe as "just a little bit less in" and that anyone who thought Britain could pull up the drawbridge and go-it-alone was kidding themselves. Nothing has occurred in the last two years to change my view that this should be the direction of travel.

That column, doubting the prospect of a "quickie divorce", highlighted the immediate worries of big business over the single market (it was Next and HSBC at the time of writing) and the loss of access to immigrant workers. Well, nothing has moved the dial. These remain unresolved and as things stand we could be at least another two years before there is any clarity.

Among the 17 million who voted Leave in 2016 were those who simply did not like being part of a big, remote bureaucracy dictating rules from afar. They wanted changes to immigration, though it was not rooted in racism, more in a concern for the pressures on already-stretched public services.

Because of the poor quality of the referendum campaign, few were made properly aware of the positive impact of the EU on British life, including the contribution of immigrants through the free movement of labour. Fewer still had heard of the customs union and tariff-free trade which has become a central feature of the debate. They had not thought clearly about the impact of withdrawal on Irish border trade. Armed with more information that should have been made available in 2016, the public may vote differently if they were asked again.

The Brexiteers argue that the public have made their decision and we should stick to it. This is disingenuous as there is nothing wrong, unethical or unfair about a second vote. Most big decisions are subject to revision, ratification or appeal, whether in the council chamber, the courts or the boardroom (many directors' decisions require shareholder approval) and laws passed by the Commons must go through the Lords. After all, without the option for parliament to change direction there would be no votes for women.

It is now for Mrs May to acknowledge that there is no settled will, that the country is deeply divided and that simply ploughing on in the hope that the problem resolves itself is taking up too much parliamentary time and is leading us towards deeper problems for the future, including a weakened economy.

Leave or Remain? It may not be as simple as that. For many of those frustrated by the EU the vote in 2016 was a marginal call. The more optimistic would have voted Remain in the hope that things would get better, while the pessimists believed nothing would change and chose to vote Leave. A better solution is surely to improve the relationship which would ease or eradicate the concerns of both camps. As such, it would leave us "a little bit less in" than we are now.

Fundamentally, we have to remain in the single market and the customs union and we have to accept that immigration is a benefit to Britain as long as it is not abused.

This third way – a reformed EU – should be embodied in an added option in a new referendum: a demand for new terms with the EU to resolve the concerns of the Brexiteers without throwing the baby out with the bath water.

This article was originally published by Daily Business