Article 50, Brexit, British Government, Brussels, Divorce, Northern Ireland

#Brexit: A Moment of Truth Fast Approaching

Written on Sunday Nov 26th.

Brexit4After we wrote our weekly Brexit Briefing last Friday, the news broke that the European Union (EU) had given the UK until Monday, December 4, to table revised and meaningful proposals on the three Article 50 issues, the rights of citizens, the “Irish question” and meeting financial obligations if it wishes the EU27 to agree at their December summit to move the talks to discussing the future relationship between the two parties. As Politico noted:

European Council President Donald Tusk set an “absolute deadline” of December 4 for the U.K. to submit a revised offer on the Brexit bill and a credible solution for the Irish border, telling U.K. Prime Minister Theresa May on Friday that otherwise it would not be possible to move on to the second phase of talks, a senior EU official said.

The official said May had accepted the timeframe, and that Tusk warned her if London misses the deadline, the European Council would not be able to declare “sufficient progress” at its December summit.

Of the three issues, citizens’ rights seems the easiest to resolve, with reports that the two sides are not that far apart. Bear in mind, however, that the deal on citizens’ rights would only apply to EU citizens already in the UK on an agreed date. What happens with regards the rights of EU citizens to live and work in the UK after Brexit is entirely a matter for the UK. Work permits and visa regimes beckon.

However, at the time of writing, (Sun, Nov 26th), it seems to us that it will be impossible for the UK to present proposals on the other two issues that will be acceptable to the EU. This will mean that the EU27 at their December summit will not agree to allow the talks to move on to discussing with the UK “the framework for its future relationship with the Union.”

Newspapers reports suggest that such a decision would, as a result, have to be deferred to the next meeting of EU leaders in February 2018, to give the UK further time to resolve the Article 50 issues.

But if the UK cannot present acceptable proposals on the Irish issue and the financial settlement by December 4th it is difficult to see how it could do so by February, for reasons we explain in this note. There is a very real prospect of the talks coming to a shuddering end and the UK exiting the EU without a deal in the absence of a radical rethink on the part of the British.

The Irish Question: The UK has said that Brexit mandates that as well as leaving the EU’s political structures it must also leave the EU’s single market and customs union. This inevitably means that there will need to be borders between the EU and the UK. With one exception these borders will be sea borders, between Calais and Dover, for example. That exception will be a border between Ireland and Northern Ireland, the only future land border between the EU, of which Ireland will be a member, and the UK, of which Northern Ireland is a part.

The EU has some 40 land borders with non-EU countries. They are just a fact of life with little emotion attached to them. Not so a potential border between Ireland and Northern Ireland, for reasons we explained in last week’s blog: (link here). As the Irish political sociologist, Kathy Hayward puts it, a border in Ireland

…isn’t ‘a stick to beat’ brexiting GB. It is a wound of deep conflict. It is a join of close contact. It is a thread of careful agreement. There is no mere ‘grandstanding’ or ‘posturing’ here. This is not a game.

If the UK continues with its decision to stay outside the customs union and the single market then it is inevitable that there will be a hard border in Ireland, with all the unpicking of that “wound of deep conflict” that will follow.

That is the consequence of the choice that the UK has made. That consequence is the responsibility of the UK, and the UK alone. There are no magical “technical electronic solutions”, no diplomatic language fudges, available to settle the issue.

Given this, as the Irish journalist, Fintan O’Toole, puts it in the Observer on Sunday, November 26th,

So what is the Irish government supposed to do? What happens with the border is a vital national interest. Ireland is desperate to hear what Britain has in mind. Instead, it has been told not to worry its pretty little head about it, but trust in the reassurances of its betters. It is being placed in the position of a 1950s wife, whose husband is betting the house on a horse race while he tells her, with increasingly irritation, to stop worrying because the nag is sure to romp home.

But there is little the UK can do to adjust its position as the Prime Minister, Theresa May, is the prisoner of the Northern Ireland-based Democratic Unionist Party (DUP), on which her minority government is reliant. At their annual conference on Saturday, November 25th, their leader, Arlene Foster, announced that she had written to all 27 EU governments telling them

“We will not support any arrangements that create barriers to trade between Northern Ireland and the rest of the United Kingdom or any suggestion that Northern Ireland, unlike the rest of the UK, will have to mirror European regulations. I have written to the heads of government of each of the EU 27-member states setting out our views.”

So, no possibility then, as has been suggested, that Northern Ireland might stay in the customs union and single market, even if the rest of the UK exits.

As things stand, it is inevitable that the Irish government will veto the move to phase two of the Brexit talks. This would probably have happened anyway, but given the current political situation in Ireland, where the government faces a no confidence motion over a long-simmering scandal involving the police force, it copper-fastens it. If the government falls as a result of the no confidence motion and there is an election then no political party is going to allow itself to be outbid as being “soft on the Brits”. The shadow of history looms large in Ireland. See here.

Even if the government survives the same logic applies. If the Opposition is prepared to bring the government down over a police scandal then it will certainly do so if the government is seen to yield to British pressure. If Theresa May’s government is captive to the DUP, then the Irish government is captive to the opposition. Neither government is going to break free of these constraints between now and December 4.

The financial settlement: The financial settlement is almost as intractable as the Irish question. Simply put, the EU takes the position that the UK committed, as a member of the EU, to budget and other expenditures of around €40 – €60 billion and that it needs to settle these liabilities now that it is leaving.

When these liabilities are settled the discussion can move on to future relationships. The EU view is that paying money already owed buys no future benefits. It is worth noting that Berlin puts the number owed at between €60 and €90 billion, and insists that no conditions be attached.

The UK accepts that there are financial liabilities and has made an offer of around €20 billion in settlement, far short of what the EU says is required. At a UK cabinet meeting on Monday, November 20, it was agreed that the offer could be increased to around €40 billion.

However, as the London Evening Standard reported:

…it is believed no exact figure has been set, and the extra funding would only be on the table in exchange for fast-tracked talks on post-Brexit trade arrangements, and the framework for a two-year transitional deal after formal withdrawal in March 2019.

This position was confirmed by a report in the Guardian which said:

A source close to those attending the session made clear that this referred to the total package including the future trading relationship as well as the divorce agreement, which focuses on EU citizens’ rights, the Irish border and the financial settlement.

The Guardian report further noted that a spokesperson for the PM had said:

“It remains our position that nothing’s agreed until everything’s agreed in negotiations with the EU”

So, the EU want an unconditional commitment from the UK to settle liabilities of around €50 billion. The UK would appear to be willing to offer around €40 billion, but only as part of a total package that involves talks on the future EU-UK relationship, a transition to that relationship and a deal on what that relationship actually will be.

Two mutually incompatible positions. The payment will either be unconditional or conditional. It cannot be both. Given that the EU will not put the integrity of its internal legal order at risk the UK’s conditional offer is unlikely to be accepted and May cannot come back with an unconditional offer because of opposition to such a move within the Conservative Party.

But then the UK cabinet, and the wider Conservative Party, with little real knowledge of the EU and how is works, has always harboured unreal expectations when it comes to Brexit. As the Observer (26/November) reports the former UK ambassador to the EU, Sir Ivan Rogers, as saying after a lecture last Friday:

…May’s Brexit strategy was “an accident waiting to happen”. Speaking after a speech at Hertford College, Oxford, he said completing the Brexit process was “guaranteed” to take a decade. He said that the prime minister’s unrealistic hopes of securing a bespoke trade deal meant a car crash in the next few months was “quite likely”.

All of which leads us back to the argument we advanced at the start of this paper: “…if the UK cannot present acceptable proposals on the Irish issue and the financial settlement by December 4th it is difficult to see how it could do so by February…”
Fasten your seat belts. The “car crash” predicted by Rogers seems more than “quite likely” and may happen sooner rather than later.

BUT… and it is a very big but… there is no doubt but that there is a majority in the House of Commons which does not wish to see the UK leave the EU without an agreement and, truth be told, would probably prefer to see the UK stay in the customs union and the single market. But that majority is split between the two main parties, Conservatives and Labour, and feels constrained by tribal, political loyalties. With the blinding lights of the oncoming car rapidly coming into view will those loyalties shatter? Could the “silent majority” assert itself?

Could parliament take back control?

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