Brexit Watch — if voting changed anything…

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Paul Clarke updates us on the ever-changing world of EU withdrawal.

The Government has certainly been testing to destruction the old cynic’s claim that if voting changed anything, they would make it illegal. It has held (or postponed) a seemingly endless series of debates over the few weeks since our last look at the Brexit process. So has it changed anything? Fearing defeat of her withdrawal agreement in a vote planned for December 2018, the Prime Minister decided to allow MPs time over the Christmas holidays to think about the consequences and deferred it until 15 January 2019. At that point, she saw it rejected by a record majority of 230.

As several commentators were quick to point out, lesser humiliations in the past had quickly been followed by resignations but, as is generally agreed, these are not normal times. Instead of visiting the Queen to announce that she could not continue in the face of such opposition, Mrs May simply said that she would return to the Commons with a Plan B (which she had previously insisted did not exist). Having had time to think about what would happen next, the MPs Mrs May had expected to come round to her view of Brexit instead began to come up with their own versions.

We know what MPs do not want…

With the House ready to consider the Prime Minister’s latest proposals, it was therefore also invited to vote on a whole range of alternatives including one to ensure that “no deal” would not be allowed and one to remove “Brexit day” (29 March) from the law book so that there could be more time to reach a deal. That idea was defeated although Foreign Secretary Jeremy Hunt has since conceded that “extra time” may be needed to finalise legislation for Brexit.

Is there a majority for one option?

Rather bizarrely, No. 10 decided to support an amendment to its own motion put forward by influential backbencher Sir Graham Brady. He said that he would give his backing to the withdrawal agreement put forward by Mrs May, but only if the contentious Irish backstop was replaced by what he calls “alternative arrangements” to avoid a hard border. His idea was supported by the Brexit hardliners in the European Research Group — hardly surprising as they had been calling for exactly this alternative to the backstop for several months.

Having previously been told by the EU that these ideas were not viable, not least because no-one could identify any alternative arrangements that would actually work, Mrs May had told Parliament in December that it had to back her deal as there was nothing else on the table. Yet, when MPs decided to support the Brady amendment, she welcomed the move and said that she would take this “mandate” back to Brussels and tell the EU that it must make changes to the backstop if it wants the withdrawal agreement to pass the UK Parliament.

Over to EU

Perhaps wanting to save Mrs May a wasted journey, the EU negotiators immediately and unanimously rejected the idea of reopening the agreement. Chief Brexit Negotiator Michel Barnier said the backstop was “part and parcel” of the withdrawal deal and would not be renegotiated. The deal which Mrs May had previously agreed was, Commission President Jean-Claude Juncker told MEPs in Brussels, “the best and only agreement available”. The debate and votes in the House of Commons yesterday do not change that. In the same debate, Mr Barnier said that the withdrawal agreement remained the only way for the UK to leave the Union in an orderly manner.

Guy Verhofstadt, who is the European Parliament’s representative in the negotiations, echoed the view of UK Leader of the Opposition Jeremy Corbyn by insisting that progress would only be possible if Mrs May was prepared to compromise on her “red lines” (no to the Customs Union, membership of the Single Market and freedom of movement). This firm stance was repeated in the capitals of the other Member States with the only idea for change causing even more problems for Mrs May as Spain suggested that reopening discussions on the withdrawal agreement would be an opportunity to take another look at the future of Gibraltar in a post-Brexit world. Various other leaders again made it clear that their support would be for the Member State threatened by the return of a hard border (Ireland) rather than the departing member which seems willing to risk that unwelcome development to appease a small group of Brexiters and the DUP.

As we move into February, therefore, with fewer than 60 days left before Brexit day, the Prime Minister has still to attempt to persuade this united group that, after two years of negotiations, and only weeks after agreeing that there was no alternative to the backstop, there is, after all, a way of avoiding a hard border in Ireland. And one that protects the Single Market and does not involve a Customs Union.

Business as usual?

EEF, the UK manufacturers’ organisation, summed up the business response to this latest development when its CEO Stephen Phipson said: “Today’s events in Parliament leave manufacturing businesses in despair.” Much of their global trade is facilitated by EU agreements, he went on, and companies will imminently have to make decisions about whether to load cargo onto ships that will not arrive at their destination until after 29 March.

They have no idea what tariffs they will have to pay when they dock, Mr Phipson went on. Companies within EU supply chains have no way of knowing if they can honour their just-in-time delivery contractual commitments as it is unclear if they will need to clear customs in two months’ time. “This is,” he concluded, “a ridiculous position for one of the world’s biggest economies and the nation that perfected global trade.”

The head of Airbus in the UK, a company that employs more than 14,000 people in this country with around 110,000 more jobs connected in supply chains, was equally forthright. Tom Enders said: “It is a disgrace that, more than two years after the result of the 2016 referendum, businesses are still unable to plan properly for the future.” He warned that, in the event of a no-deal Brexit, his company would have to make potentially very harmful decisions for the UK. Companies in the USA and China, were Airbus confirmed, already making bids to attract the business away from the UK in that event.

A ferry good idea

Although it sounds less reassuring than it did several months ago, the Government has continued to say that it is planning for “the unlikely scenario” of a no-deal Brexit. One of the latest proposals to emerge is for more than £100 million to be spent chartering extra ferries to ease the severe congestion predicted to occur at Dover if the UK leaves the EU with no deal in place. In October 2018, Tim Reardon, the Port of Dover’s Head of EU Exit, said: “Trying to divert the traffic through other ports is a non-starter. The port capacity isn’t there, and a whole new fleet of ferries would be needed which simply doesn’t exist.”

It would seem that the Government has tried to create that fleet by awarding contracts to Brittany Ferries, Danish shipping firm DFDS and UK start-up Seaborne Freight. All three businesses will expand services on their fleets of roll-on/roll-off (ro-ro) vessels, providing up to half a million tonnes a month in extra capacity for ports including Felixstowe, Ramsgate, Plymouth and Portsmouth (although commentators have been quick to point out that Seaborne Freight has “never so far moved a single lorry”).

Trading after Brexit

While the struggle to complete the withdrawal agreement continues, the Department for International Trade (DIT) is engaged in its own battles — to ensure that the more than 40 trade agreements to which the UK has access as a member of the EU will continue to be available after Brexit. Although he may not wish to be reminded of it, in 2017 International Trade Secretary Liam Fox said that Britain would just need to copy and paste existing EU trade deals with third countries and that these would be ready for “one second after midnight” on 29 March 2019. By mid-January, however, hardly any were completed and Mr Fox had to admit that progress in the short time frame available is now entirely dependent on the willingness of the other countries involved to put in the extra effort to speed up the process.

The International Trade Secretary recently highlighted the advantages of one of these EU deals (with Japan) and said that it should provide the basis for a new, even stronger partnership once the UK leaves the EU. “This is one of the world’s most ambitious free trade agreements and I welcome the benefits that it will bring to both British businesses and consumers,” he said. Like almost all the others, however, it now seems highly unlikely that a replacement deal with Japan will be in place if the UK leaves the Union without a deal on 29 March.

The one agreement that seemed to be in place (with Switzerland) has, since it was announced, been queried by Angus MacNeil, Chairman of Parliament’s International Trade Committee. He has asked what ministers meant when they said the proposed deal “matches current arrangements as far as possible” and pointed out that Switzerland only has the deal with the EU because it accepted the free movement of people.

Next?

TS Eliot said that April is the cruellest month and he could well be proved right if the UK has by then left the EU without a deal. Mrs May clearly hopes that the nearer the cliff edge approaches, the more likely her MPs are to blink and agree to her deal. Brexiteers seem to be pinning their hopes on a similar strategy — holding out until the EU gives way at the eleventh hour rather than risking the problems of no deal. Who will be proved right? Watch this space.

Last reviewed 4 February 2019

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