Saturday , May 25 2024

Brexit – the final countdown?

Are we entering the final countdown to Brexit? Logically, there are three options, to leave without a deal, to leave with a deal and obviously not to leave. The probability of each outcome depends on perspectives taken.

As things stand, there is only one deal available, what has become known as the Withdrawal Agreement (WA). It is worth considering for a moment how this has come about.

From the EU perspective, this has been put together by the European Commission, the key figures being one of the EU Presidents, Juncker, with the lead negotiator being Barnier. The negotiating schedule was constructed by the EU. The position has been endorsed by the Council of Ministers, the heads of state of remaining 27 members.

On the British side, originally a department, DExEU was created. Since the infamous Chequers meeting in July 2018, the negotiating lead came from the Cabinet Office, in the form of Olly Robbins.

The resulting WA has been put to the House of Commons three times, failing on each occasion. The most cited reason is the existence of the “backstop”. This is a device, ostensibly at least, to ensure that there is no hard border between Northern Ireland and the Republic of Ireland.

Summaries of the backstop can be expressed in many ways, ranging from an insurance policy to shifting the effective border to the Irish Sea, allowing for freedom of movement on the Emerald Isle. Although this is presented as an interim position, there is no fixed end date, nor agreed mechanism to bring it to a conclusion. In fact, the WA is designed as the basis for a future relationship between the UK and the EU.

As things stand, over the last week, many of the key players and supporting cast within the EU have confirmed their long standing position. Juncker, along with French President Macron and a pawn in the game, Taoiseach Leo Varadkar, have all reinforced the EU position that the WA can not be changed, that the WA is non-negotiable.

Whatever has gone on behind the scenes between Theresa May’s team and the EU, debate has been prolific in the single open democratic forum for perspectives to be aired, the House of Commons. After three attempts, it is clear that the WA will not pass as long as the backstop is part of it. Ostensibly, the EU not being prepared to compromise and Parliament not willing to accept, the options would seem to be narrowed.

Of course, the EU have their position and have experience in negotiations on the world stage. It may be that at this stage, there is a ploy to change the backstop at the last minute, putting pressure on the UK to accept other conditions such as the divorce payment, fishing rights and the ability to obstruct competitive British trade and taxation policies to mention just a few. Draft alternatives to the WA probably already exist in Brussels.

There is a significant cohort in Parliament that would take “no deal” off the table. In the absence of an acceptable WA, their position by default becomes to remain in the EU, revoking Article 50.This may explain opposition to “no deal” from Conservative politicians of an age not to want to sit for another 5 year term, lucrative directorships from EU based banks or conglomerates being available to those with influence, providing generous salaries on top of indexed linked pensions. Their balance of power could be crucial.

To be successful, in removing the “no deal” option, opposition parties require an element of the Conservative Party to openly confirm that they had accepted ministerial positions despite not having been committed to the manifesto under which they gained power.

Taking an alternative perspective, in his maiden appearance as the new Leader of the House, Jacob Rees-Mogg outlined the current legal default position, confirmed in a Daily Telegraph article by the Attorney General, Geoffrey Cox.

Parliament has already voted to implement the European Union (Notification of Withdrawal) Act 2017 as well as the European Union (Withdrawal) Act 2018. The combined effect, in conjunction with the extension of Article 50, is that the UK leaves the EU on October 31st 2019, unless of course the already rejected WA is brought into force beforehand.

The default position therefore becomes leaving on 31st October without a deal, unless legsilation can be changed, specifically, repealing the two acts of parliament. Logistics for such a course of action become complicated and time critical.

Parliament is already in recess for the summer, due to return on 3rd September. There are two weeks, for parliamentary business before the scheduled recess for the party conference season. The House of Commons would normally be expected to return on 8th October, giving just four weeks for opponents of Brexit to overthrow Brexit.

Incidentally, the next European Council meeting is next scheduled for 17th October.

Of course, plans can be scuppered by a general election. Steps have already been taken by the new leader of the Liberal Democrats, Jo Swinson, to call for a vote of no confidence in the new government led by Boris Johnson. The Lib Dems do so from a position of relative strength, having been the second placed party in the recent European Parliament elections following third place in local elections in May.

Convention dictates that the Leader Her Majesty’s Most Loyal Opposition should bring a no confidence motion. There are two significant reasons why Jeremy Corbyn might be reluctant to do so. Firstly, the state of the polls suggests that the timing would be less than ideal for Labour, faced with the resurgence of the Lib Dems in London and the South East whilst in the other regions, the Brexit Party gained momentum. The combined effect was to halve the number of Labour MEPs.

Assuming that the government might be defeated in a vote of no confidence, Labour would also have difficulty in ratifying policy commitments to be included in a manifesto were the party conference not to go ahead.

The Fixed Term Parliament Act 2011 makes provisions for the calling of a general election. In effect, the opposition would be invited to form a new government. Parliamentary arithmetic suggests that a number of Conservatives would have to cross the floor for this to happen, unless an arrangement can be made with the DUP. The latter would be doubtful given Jeremy Corbyn’s associations during the Troubles.

The earliest date an election could be called is now 31st October, the date for withdrawal, unless parliament is recalled during the summer break.

For Boris Johnson to call a general election, there must be support from two thirds of the House, 434 MPs. In any event, Parliament must be dissolved 25 working days before polling. Any extension to the withdrawal date of 31st October would have to be approved both by the UK Parliament and the EU. That translates into electoral suicide for the Conservative Party, possibly for generations.

Against what many will consider to be a complex political background, ow do we assess the probability of each outcome?

Currently, Boris Johnson may be correct in his assessment that a deal would be likely. If acting in the interests of EU citizens, the EU itself may feel that the trade balance, therefore economic prosperity, means that compromise, at least on the backstop, has to be made.

There is also the possibility that Article 50 could be revoked, thus remaining in the EU. For that to happen, Conservative opponents to “no deal” have to act quickly. Given opposition to the WA in three previous votes, those Conservatives would therefore show their hand as reneging on their manifesto commitments. It goes without saying that they would have to outnumber opposition MPs who insist on honouring the Referendum.

Should the EU continue to insist that the WA can not be changed, the prospect of “no deal” becomes more of a reality. The intriguing question is how that might happen.

Boris Johnson may be right in his assessment, that a deal is more likely. In fact, he has proclaimed that he would go “the extra 1,000 miles” to that end, presumably not to fall down at their door. The possibility of tariffs on EU sales, particularly vehicles which account for £25 billion of activity in Germany alone, would have a devastating effect on an already precarious economy. The same applies to agricultural markets currently protected from global competition.

In order to minimise its losses, the EU may decide to break its own rules, which it does in many instances. According to those rules, negotiation on future arrangements can not take place until Brexit has happened. However, there is nothing to stop both sides signalling the intention or writing to the WTO to signal the start of negotiations on a future free trade agreement, therefore invoke GATT Article XXIV. That would allow the EU and UK to trade on current terms making it a “no deal yet” Brexit.

It is more than likely that text for such an agreement has already been drafted in both Brussels and London.

That is not to say that a trade deal will come quickly. The EU’s own website lists 98 agreements partly in place, pending or being negotiated, many suspended for as long as eleven years. Article XXIV notionally allows for up to ten years for a trade agreement to be concluded.

It may seem as though it will be a quiet summer but like the duck on a pond, there will undoubtedly be plenty of activity going on underneath the surface. The script writing continues, the drama and screenplays will evolve through autumn. It remains to be seen who will be the fall guys.

This post was originally published by the author on his personal blog:

About Rex N

Rex is a freelance writer in medical affairs, economics and sport. A former teacher and examiner of Economics, his interest in European Union affairs took root when discovering the depths of the Maastricht Treaty. He is a committed democrat having campaigned for a popular vote to decide on further integration measures, based on fact rather than spin.

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