Brexit Briefing 69: A move to break the deadlock?

HOC

Officially this was a quiet week, but behind the scenes feverish discussions were happening in London and Brussels as both sides tried to find a way through the current political impasse and what it means if a no-deal Brexit happens. 

The PM addressed parliament on Monday to explain the government’s next move. Her plan focused on trying to secure further concessions on the backstop, with either a time limit or the ability for the UK to unilaterally leave it. She also outlined her plans to bring it back to the Commons for a further vote. This looks challenging as the EU has up until now ruled out changes to the backstop. However, the mood appears to be changing in Brussels. There may be some room for movement. 

The PM will lay out the next steps in the process in the Commons on Monday, as required by the EU Withdrawal Act. MPs are tabling amendments to the motion that follows her statement in order to try to take some control what happens next. These amendments lay out a range of potential options, testing the will of the House on each one. 

The key amendment is probably the Cooper/Boles amendment, which is named after the two authors: a Labour MP and the other a Conservative MP. It calls for a three-month extension to Article 50 -- until the end of June -- if the government fails to get the withdrawal deal through parliament by the end of February. This looks likely to pass it appears the only way to avoid a no-deal Brexit in the short term and that seems to be a position that a majority of MPs support. Government ministers have been reported to be campaigning for a free vote so that some of them can vote for this amendment. There are a number of other amendments that range from a second referendum to putting a fixed end date for the backstop to explicitly ruling out the default no-deal scenario. 

It is difficult to see what will happen, and which combination of amendments might get passed. However, there is probably not (without Jeremy Corbyn’s support) a majority for a second referendum or for any of the alternative Brexit scenarios. Each scenario would need the government to support it to get a majority; the government's focus is getting the withdrawal deal through the House. 

The Cooper/Boles amendment may therefore be the one that gets adopted. However, this amendment alone would not avoid a no-deal Brexit. To do that the government would have to officially ask for an extension which would then have to be agreed by all 27 other EU countries. Following such an agreement, the government would then need to amend the leaving date in the EU Withdrawal Act which would itself be subject of another vote in the House. 

This would also beg the question of what is the purpose of the three month delay. There is a good chance that by the end of May nothing further has been resolved. The UK then could have to extend Article 50 again. A further extension would be much more problematic as it would take the UK into a new European Parliament session and a new multi annual budget. 

EUUK

However, despite all the noise and speculation, the British government faces the same three choices it has faced since it triggered Article 50. 

No-deal Brexit, the agreed deal, which was always going to look like the one currently on the table, or no Brexit. The government has got into its current predicament for two reasons. Firstly, the loss of the Conservative majority at the last general election combined with a parliamentary party which is split across all three options means that the negotiated deal was always going to struggle in Parliament. However, losing a parliamentary vote in 2017 which mandated a meaningful vote on the deal made that predicament much worse. There was then no way that the government could ratify the deal without parliamentary approval. 

Nevertheless, the current troubles show why the Prime Minister chose to call the snap election in 2017. With the large majority that the polls promised when the election was called, the government would have been able to get this deal through despite opposition from within the party. It was perhaps the only way the government could have avoided the current situation. 

In hindsight, the deal was always going to resemble the one in front of Parliament now because of the EU’s negotiating position. Their insistence on doing the negotiations in two phases, and refusing to negotiate the Free Trade deal until the UK was out of the EU, meant that the withdrawal deal was always only going to address the issues of primary concern to the EU. 

These were the budget, citizens rights and the Irish border. Because of the imbalance in negotiations and the need for Britain to move swiftly to the free trade discussions, the UK has only minor negotiating successes which are very difficult to sell at home while the EU has got more or less everything it asked for. The UK committed to pay its dues (£39 billion) without any guarantee that a trade deal will follow. The UK also guaranteed that EU citizens can remain in the UK with most of their current rights, whilst the EU only guarantees the most basic of rights to UK citizens in Europe. The Irish border can’t be solved without agreeing what the future trade deal looks like and therefore because the EU refuses to discuss those future trade arrangements until the UK has left, the backstop became necessary and that now potentially traps the UK in a perpetual customs union. 

Together these make such a deal very difficult to sell to the British parliament, especially when the government doesn’t have a majority. It also strengthens the argument that the UK would be better off leaving without a deal at all. 

A no-deal Brexit is gaining ground because with the negotiated deal stuck in Parliament, it is the only other option to deliver Brexit. It has morphed into the first preference of most leave voters. It would , in theory, allow the UK to negotiate a free trade deal with the EU. Some argue there would be fewer binding commitments and this could give the UK a stronger hand in those negotiations. 

This, of course, overlooks the serious problems that going from a full EU member to a country with no legal links with the EU at all overnight would cause. These are problems that no one can adequately predict. However, that in itself also makes a no deal option more attractive. Whilst the problems with the negotiated deal are clear to see now, the problems with a no deal are at the moment speculation and will not become real or clear until we are already out and therefore no longer in a position to mitigate them. 

Others argue that a no-deal Brexit would actually give the UK a stronger negotiating position. It would certainly reset the talks, but the UK would be desperate for immediate side deals in things like aviation, business visas, etc overnight, which the EU may or may not decide are a priority. 

However the choice was always going to be between the EU’s unpalatable deal or a no-deal Brexit. It is highly unlikely that the government will push the button on a no-deal Brexit, given the short term upheaval it would cause and the lack of support in Parliament. It is also unlikely that the negotiated deal can get through Parliament as it is and there is little time for a renegotiation at this stage. 

That only leaves one other option. No (or at least a delayed) Brexit. A delay to Brexit is probably the one option that can command a majority in Parliament, as the vote next week is likely to prove. But it is also as unpopular and divisive as the other two options. It will also need the EU to agree to any extension, which will be tricky if it goes beyond July and necessitates European elections. 

It will also solve none of the overarching issues. At best, it just delays them. In the end the UK has to choose one of the options. This means that there is a remote but growing possibility that the UK might not leave at all. This could only be done by parliament voting to withdraw article 50 completely (which would be political explosive and highly unlikely to happen) or it legislates for a referendum - which is also highly unlikely at present, given the lack of support both from the government and the leader of the opposition. The impasse in the UK appears unbreakable with each of the three options looking politically impossible.

Schinas

However, at just the moment of political deadlock in London, Brussels may have inadvertently blinked.

The European Commission’s chief spokesman Margaritis Schinas (pictured above) admitted this week that in the event of a no-deal Brexit there would be a hard border in Ireland. This came as a shock in Ireland where the belief had been that there would be no border in any circumstances. This has prompted Ireland, which would face a serious economic downturn in the event of a no deal to whisper about negotiating a bilateral agreement with the UK that could keep the border open. Chief Negotiator Michel Barnier also started  talking about technological solutions to the border issue. 

Up to now, the outright rejection of technological solutions had been the Commission's rationale behind both the backstop and the attempt to keep Northern Ireland locked in the EU's customs union. It is possibly the main reason why we are in the impasse we currently find ourselves in. It has also been the main reason why the EU rejected the Canada Plus Free Trade deal option for the entire UK. 

With a no-deal now a realistic possibility, it appears that the EU's united front is fracturing. The Commission announced that no deal would mean some border controls in Irish ports to check goods going between Ireland and the rest of the EU. Some reports suggest there are even discussions within the Commission about treating Ireland and the UK as one economic and customs block in the event of a no-deal Brexit. 

Dublin always feared that when things got tough, the EU would not keep the promises made to Ireland. It was one of the key reasons why the Irish government insisted on the backstop, sure that in the end Britain would accept it. 

This all means that despite being at the centre of the storm, opportunities are opening up for the British government and movement now appears possible on the backstop. 

There is speculation of back channel discussions going on in Brussels and other capitals. It is yet unclear if anything concrete is being thrashed out behind closed doors. But if - and it is a big if - the backstop is on the table in the form of a specific end date or a unilateral ability for the UK to leave it, then the PM’s deal could still get through Parliament. The official EU line is that the backstop can’t be changed, but if it genuinely risks bringing about a no-deal Brexit then the EU may be prepared to give some ground.

These negotiations were always going to go until the last possible moment. The clock has run down to the last moments of extra time. If nothing moves then the UK faces the poisoned choice between the negotiated deal with a backstop, a no-deal Brexit or no Brexit at all. Everyone wants to avoid having to make that choice, but it looks like the most likely outcome at this stage. Don’t bet against some last minute drama.