The hand you’re dealt with

Jul 23, 2018
Sunday Business Post, 22 July 2018
 

As a negotiating party to this whole Brexit business, the European Union can only play with the hand it has been dealt.  At this stage in the negotiations, that hand is the Chequers “Future Relationship” White Paper.  If only for the purposes of the EU/UK negotiations, the current White Paper has an existence outside of the shenanigans of Westminster.  While there may be squabbles over who cut the deck of cards in the first place, or indeed whose turn it is to deal, the hand that has been dealt to Michel Barnier and his negotiating team remains the White Paper. 

The close run votes this week were over (relatively) unimportant items of procedural legislation designed to keep regulatory and economic processes in Britain on the road after the current governing legislation from Brussels ceases to have effect.

Take the UK Trade Bill for instance.  Judging from media reports, how the Bill made its way through the House of Commons would seem to be nothing short of miraculous.  But the Bill itself only comprises a handful of clauses, and almost all of them are of a technical nature.  The most significant of these gives the UK revenue authority HM Revenue and Customs greater powers of enquiry over UK traders.  

And as to the White Paper itself, its most striking aspect is how little the UK position has really changed from the original 12 priorities set out in the Lancaster House White Paper back at the start of 2017.  The language has moved on and become clearer, and the emphasis has moved away from principles and more towards practicalities.  Fundamentally though, what the UK is asking the EU to consider is not materially different. 

What is materially different is the attitude between early 2017 and now.  It seems to me that the coin is finally starting to drop with MPs as to the real implications of Brexit on their supporters and on their constituencies.  Brexit is something to be fought over.  We are seeing MPs, previously unknown outside their constituencies, wheeled out to explain their voting decisions and intentions in terms of how it will affect the industries and jobs in their constituencies.  Party loyalties are no longer sacrosanct.     

The only region of the United Kingdom where a journey from the Brexit ideal to the Brexit pragmatic does not seem to be happening is in Northern Ireland.  The DUP position seems to be resolutely nailed to some kind of Brexit “full departure but keep the status quo” ideal.  The Sinn Fein position is not represented at all where it counts and at a time when it could make a real difference - at a division in the House of Commons.

 If some kind of epiphany is indeed taking place in UK politics, it's an epiphany which is almost two years too late.  It is possible that the UK will be able to formulate a coherent negotiating platform, negotiate a proper withdrawal agreement and future relationship with European Union, and sell this back to Parliament and to its electorate at large.  It is not possible that this can be achieved between now and 29 March 2019 which is the only reliable Brexit deadline enshrined in law.  This makes it worthwhile to re-examine the provisions of Article 50, the infamous element of the EU treaties which permits the withdrawal of an EU member country from the European Union. 

Article 50 permits an extension to be granted on the notification period – that is say the time interval between the formal notification by the UK of its intention to leave (which it made on 29 March 2017) and the departure date itself.  It is possible for the remaining EU members, if they wished, to unanimously grant a further extension to the UK beyond 29 March 2019, during which time the UK would remain a full member of the European Union, until it got its act together on the negotiation front.  This must now be worth considering. 

Positions are changing, and not just in the UK.  The Irish government seems to have more or less set aside its laissez faire “you broke it you fix it” policy in favour of announcing the arrangements being put in place in contemplation of future Brexit outcomes.  The position of the EU Barnier negotiating team seems to be getting more and more nuanced, with less emphasis on red lines (in public at least) and more emphasis on practical post-Brexit arrangements and concessions. 

Attitudes towards Brexit which had been informed by arrogance and complacency are now being directed more by pragmatism and fear.  No UK government really wants to crash out of its international obligations and trigger an economic downturn which it could take several generations to forget.  No Irish government wants to be remembered as the government which was in power when border controls were re-introduced on this island.  

If the Chequers White Paper has achieved nothing else, it has rattled the UK establishment and has brought other options into the discussion, including the possibility of a second referendum. Pausing the Article 50 clock might give everybody a chance to regroup.  A further UK extension, without penalty, might be a hard sell to the other EU member countries, nor would it be well received among all elements of the UK political spectrum.  

Nevertheless there are worse cards to play.  The EU institutions will be encouraged by having already secured their own ultimate Brexit red line.  No other member country looks likely now to leave. 

Brian Keegan is Director of Public Policy and Taxation at Chartered Accountants Ireland