Tuesday 12 June 2018

Stuck in the middle (with who?)

This week promises to be an important one for Brexit legislation with parliament voting on amendments to the EU Withdrawal Bill following its return from the House of Lords (see below). With time running out ahead of the EU summit on 28-29 June, the government is further behind on its legislative agenda than is needed at this stage of the proceedings. As ever, the issue remains the split within government regarding the nature of the deal which the UK is seeking with the EU.

Davis and the Irish border 

The big story last week was the apparent threat by Brexit Secretary David Davis to resign on the basis that the backstop plan for the Irish border issue contained no end date. As a consequence he perceived a real threat that the UK would be tied to the EU customs union indefinitely. It is not the first time that Davis has threatened to withdraw his services. It is exactly 10 years since Davis resigned as an MP over the issue of the erosion of civil liberties following a parliamentary vote which saw the detention period for terrorist suspects extended from 28 to 42 days. In Davis’ words, this represented "the slow strangulation of fundamental freedoms by this government.” The irony is, of course, that the current government has tried to keep parliament out of the Brexit process and it was only thanks to the intervention of the courts that it was given any form of jurisdiction.

According to the New Statesman, this marked Davis’ fifth resignation threat. Given the lack of progress in Brexit negotiations so far, many people are wondering whether the chief negotiator might be part of the problem, and it speaks volumes for the weakness of Theresa May’s position that she has not called his bluff. In the end, the prime minister acceded to the threat by publishing a document outlining the backstop plan in which the temporary customs arrangement with the EU “should be time limited” and run to the end of 2021.

There are a number of issues with this suggestion. On the one hand, a backstop is designed to be put in place on the assumption that the first best solution does not work out. By definition, it cannot be temporary. Second, it incorporates a date that the EU has not agreed to and runs a year beyond the end of the planned transition agreement (which the EU has still not yet signed off).

In response to the UK’s proposal, the EU yesterday released an infographic (here) outlining how it sees the solution to the border problem. This plan envisages an open border between Ireland and Northern Ireland with the north retaining access to the single market for goods. In the Commission’s view, “the EU backstop proposal to apply unless and until another solution is found.” The key difference with the British plan is that it allows no prospect for the UK to remain within the customs union primarily because, in the Commission’s view, the UK’s plan leaves too much “uncertainty on the scope of EU trade policy applicable to the UK.”

Whilst the UK government is way too ambitious and its plans do smack of cherry-picking, the Commission’s response has been criticised by some trade experts as being overly provocative (see this Twitter thread from David Henig). For example, the slide pack released by the Commission requests “Full application of EU VAT and excise rules on goods in Northern Ireland” which no UK government is likely to grant. Given that the EU sees no alternative to its plan and holds all of the aces ahead of the summit this puts the UK in a very awkward position. Either it will have to cross yet more of its red lines in order to get a trade agreement or we run the risk of moving ever closer to the cliff edge, as the chance of a deal by October would look very remote. 

Seeking domestic compromise 

As it happens, the likelihood that the UK will leave the EU without a deal has been significantly reduced by the concessions offered to MPs who planned to vote against the government on the second reading of the Withdrawal Bill. In order to stave off defeat, the prime minister promised rebels that she would put down a new amendment, expected to give MPs new powers over the final stages of Brexit. The proposals are designed such that in the event of parliament rejecting the final Brexit deal, ministers would have seven days to set out a fresh approach. In the case of talks with the EU breaking down, they would have until 30 November to try to strike a new deal. Rebel MPs also previously demanded that if there was still no deal by 15 February 2019, the government would have had to hand over stewardship of the process to the House of Commons to set its Brexit strategy (though this has not been adopted). In effect, the plan envisaged two years ago that the government (not parliament) would handle the Brexit negotiations has been scuppered. And rightly so.

But the Brexit department issued a statement suggesting “we have not, and will not, agree to the House of Commons binding the government’s hands in the negotiations.” So we are clearly not yet home and dry. Moreover, there is a worrying sense of authoritarianism in that comment because parliament is the people’s representative body: Cutting it out of the loop makes the negotiating process a partisan party-related matter. Theresa May finds herself increasingly under pressure. On the one hand, she has to balance her domestic problems but on the other she has to deal with an EU27 that shows no sign of accepting the UK’s Irish border solutions.

Of course, all sides at present are still playing poker and there will be a considerable amount of give and take along the way. At home, the Brexit camp is beginning to realise that the realities of delivering Brexit on the terms suggested two years ago are not what was envisaged. And as obstinate as Theresa May’s government has proven to be in the Brexit negotiations with the EU27, both sides know that the alternative is a UK government that is much more hard-line – think of Boris Johnson or Michael Gove as PM – which would be even more unpalatable for the EU27. We may be in a desperate situation today but it could be an awful lot worse – believe it or not.

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